<PAGE>   1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

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

                   For the fiscal year ended December 31, 1998
           [ ]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 - 0-25574

                     TELECOMMUNICATIONS INCOME FUND X, L.P.
             (Exact name of registrant as specified in its charter)

          Iowa                                                 42-1401715
-------------------------------                           ------------------ 
(State or other jurisdiction of                             I.R.S. Employer
incorporation or organization)                            Identification No.)

                100 Second Street S.E., Cedar Rapids, Iowa 52401
               ---------------------------------------------------
               (Address of principal executive offices) (Zip Code)

         Registrant's telephone number, including area code 319-365-2506
                                                            ------------

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

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

                   Limited Partnership Interests (the "Units")
                   -------------------------------------------
                                (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for 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 (Section 229.405 of this chapter) 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 [X].

As of March 19, 1999, 89,347 units were issued and outstanding. Based on the
book value at December 31, 1998 of $130.01 per unit, the aggregate market value
at March 19, 1999 was $11,616,003.

DOCUMENTS INCORPORATED BY REFERENCE. Portions of the Registration Statement on
Form S-1, dated August 27, 1993 are incorporated by reference into Part IV.




<PAGE>   2

                     TELECOMMUNICATIONS INCOME FUND X, L.P.

                          1998 FORM 10-K ANNUAL REPORT

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
                                     PART I
<S>          <C>                                                             <C>
Item 1.      Business .........................................................3
Item 2.      Properties........................................................5
Item 3.      Legal Proceedings.................................................5
Item 4.      Submission of Matters to a Vote of
                 Unit Holders..................................................5


                                     PART II
Item 5.      Market for the Registrant's Common Equity
                 and Related Stockholders Matters..............................6
Item 6.      Selected Financial Data.......................................... 6
Item 7.      Management's Discussion and Analysis
                 of Financial Condition and
                 Results of Operations.........................................7
Item 8.      Financial Statements and
                 Supplementary Data.......................................... 13
Item 9.      Changes in and Disagreements with Accountants
                 on Accounting and Financial Disclosure.......................29


                                    PART III
Item 10.     Directors and Executive
                 Officers of the Registrant...................................29
Item 11.     Executive Compensation.......................................... 31
Item 12.     Security Ownership of Certain
                 Beneficial Owners and Management.............................32
Item 13.     Certain Relationships and
                 Related Transactions.........................................32


                                     PART IV
Item 14.     Exhibits, Financial Statement Schedules and Reports on
                 Form 8-K.....................................................33

SIGNATURES       .............................................................34
EXHIBIT INDEX    .............................................................35

</TABLE>


<PAGE>   3



                                     PART I


ITEM 1.  BUSINESS



Telecommunications Income Fund X, L.P., an Iowa limited partnership (the
"Partnership"), was organized on April 20, 1993. The general partner is Berthel
Fisher & Company Leasing, Inc. (the "General Partner"), an Iowa corporation that
has been in operation since 1988. The Partnership's business and the executive
offices of the General Partner are located at 100 Second Street S.E., Cedar
Rapids, Iowa 52401. Substantially all of the voting stock of the General Partner
is owned by Berthel Fisher & Company ("Berthel Fisher").

The Partnership began offering units to the public on August 27, 1993. The
General Partner suspended sales of units effective May 16, 1994, pending a
decision to prepare an offering supplement to the prospectus. This supplement
included updated financial information on the Partnership's lease portfolio and
updated the information in the Prior Performance tables contained in the
Partnership's prospectus dated August 27, 1993. The General Partner filed, on
July 16, 1994, Post-Effective Amendment No. 1 to the registration statement
updating the financial information and requesting an extension of sales to
December 31, 1994. Approval was received on this request effective July 20,
1994.

The Partnership will operate until December 31, 2002 unless dissolved sooner due
to the occurrence of any of the following events: (i) the vote by limited
partners owning a majority of the Partnership in accordance with the Partnership
Agreement; (ii) the withdrawal, bankruptcy, or dissolution and liquidation or
other cessation to exist as a legal entity of the general partner (unless any
successor general partner elected in accordance with the provisions of the
Partnership Agreement elects to continue the business of the Partnership); (iii)
the final distribution of all liquidating distributions among the limited
partners pursuant to the Partnership Agreement; or (iv) the sale or disposition
of all or substantially all of the assets of the Partnership without the
subsequent reinvestment in equipment.

The business of the Partnership is the acquisition and leasing of equipment,
primarily telecommunications equipment such as pay telephones and call
processing equipment. The Partnership began its primary business activities on
September 29, 1993.

A significant portion of the Partnership's business is with customers who are in
the telecommunications industry. The telecommunications industry, particularly
the pay telephone and long distance facets of the industry, is heavily regulated
by the Federal Communications Commission ("FCC") and by various state public
utility commissions. Regulation is not directed at the ownership or leasing of
telecommunications equipment, but is focused primarily on the business of the
Partnership's customers that operate in the telecommunications industry.
Generally, regulation affects rates that can be charged and the relationship of
the regional Bell operating companies to the rest of the pay telephone industry.
Management does not expect regulation to have any significant negative impact
upon the business of the Partnership.

The principle objective of the Partnership is to obtain the maximum available
economic return from its investment in equipment leases to unaffiliated third
parties with a view toward: (i) generating cash flow from operations, with the
intent to make distributions

<PAGE>   4


ITEM 1.  BUSINESS (CONTINUED)



during the Operating Phase (the period which ends when the General Partner
elects to begin the liquidation of the Partnership assets); (ii) reinvesting
(during the Operating Phase) any undistributed cash flow from operations in
additional equipment to be leased to increase the Partnership's assets; (iii)
obtaining the residual values of equipment upon sale; (iv) obtaining value from
sales of the Partnership's lease portfolio upon entering the Liquidating Phase
(the period during which the General Partner will liquidate the Partnership
assets); and (v) providing cash distributions to the partners during the
liquidating phase.


The Partnership acquires primarily telecommunications equipment (specifically
pay telephones and call processing equipment), that is leased to third parties.
The Partnership has also acquired other types of equipment that is generally
subject to leases. During 1998 the Partnership acquired equipment with a cost of
$5,941,745. All of this equipment has been leased.


Equipment acquired by the Partnership is installed in various locations by the
lessees. When the lessee installs the equipment in a location, a site location
agreement gives the lessee the right to have the equipment at this site for a
specified period of time. These site location agreements generally have a three
to five year term. The Partnership, in addition to its ownership of the
equipment, takes an assignment of and a first security interest in these site
location agreements. Therefore, if a lessee defaulted, the Partnership could
have the ability to re-sell or re-lease the equipment in place. This "in place"
value is generally much higher than the residual value of the equipment. The
telecommunications equipment generates revenue primarily through long distance
phone calls. The Partnership's lessee generally receives long distance revenue
from a contracted third party billing company. The Partnership also takes an
assignment of this revenue.

The General Partner acquires and approves leases on behalf of the Partnership.
The General Partner established guidelines to use in approving lessees.
Generally, before any lease is approved, there is a review of the potential
lessees' financial statements, credit references are checked, and outside
business and/or individual credit reports are obtained.

The equipment purchased by the Partnership consists of advanced technology pay
telephones and call processing systems to be used in hotels, hospitals,
colleges, universities, and correctional institutions. The Partnership has also
purchased and leased other types of equipment.

The Partnership's equipment leases are concentrated in the pay telephones, hotel
phone equipment, office equipment, and ATM machines, representing approximately
59%, 0%, 20%, and 17% at December 31, 1998, and 69%, 17%, 4%, and 1% at December
31, 1997, respectively, of the Partnership's direct finance lease portfolio. At
December 31, 1996, equipment leases in pay telephones and hotel phone equipment
represented 70% and 24% of the lease portfolio, respectively. Two customers each
accounted for 21% and 18% of income from direct financing leases during the year
ended December 31, 1998. These customers are Murdock Communications Corp. and
Hansen Lind Meyer, Inc., respectively.



<PAGE>   5



ITEM 1.  BUSINESS (CONTINUED)

The leasing industry is very competitive and the Partnership has fewer assets
than some of its major competitors. The principal methods of competition include
service and price (interest rate).

The Partnership has no employees and utilizes the administrative services of the
General Partner for which it pays an administrative service fee.



ITEM 2.  PROPERTIES

The Partnership does not own or lease any real estate. The Partnership's
materially important properties consist entirely of equipment under lease. The
carrying value of such equipment is represented by the Partnership's investment
in direct financing leases, which was $10,676,681 at December 31, 1998. This was
comprised primarily of telecommunications equipment, as described in Item 1.


ITEM 3.  LEGAL PROCEEDINGS

A foreclosure proceeding was filed on February 20, 1998 in the Iowa District
Court for Linn County located in Cedar Rapids, Iowa against North American
Communications Group, Inc. CWC Communications, Inc., North American
Communications Corporation (Missouri) d/b/a North American Communications of
Georgia, Inc., North American Communications of Mississippi, North American
Communications Group, Inc., d/b/a North American Communications of Louisiana,
Inc., Troy P. Campbell, Sr. And Archie W. Welch, Jr. for foreclosure of the
leased assets. The Partnership included in the foreclosure suit a claim for
damages against the guarantors of the leases North American Communications
Group, Inc., Troy P. Campbell, Sr. and Archie W. Welch, Jr. in the amount of
$4,485,781. The trial court granted defendants Campbell and Welch Motion for
Dismissal because of Lack of Personal Jurisdiction and that decision has been
appealed. Meanwhile, discovery is proceeding with interrogatories being filed by
each side. See Item 7 for additional information regarding the status of the
North American Communications Group, Inc. leases.

In December 1998, the Partnership, Telecommunications Income Fund IX, the
General Partner, North American Communications Group ("NACG"), and others filed
a suit against Shelby County, Tennessee. The County removed that suit from
Tennessee State court to Federal Court. The suit alleges, among other things,
damages for wrongful termination of the pay phone contract between NACG and
Shelby County and racial discrimination by the county against NACG. Shelby
County has filed an answer and discovery is in the initial stages.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF UNIT HOLDERS

No matters were submitted to a vote of limited partners, through the
solicitation of proxies or otherwise during the year covered by this report.



<PAGE>   6



                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER 
         MATTERS:

The Registrants' Units are not publicly traded. There is no market for the
Registrant's Units and it is unlikely that any will develop. The General Partner
will resist the development of a public market for the Units.


<TABLE>
<CAPTION>
                                                              Number of Partners
                                                                       at
                  Title of Class                               March 19, 1999
                  --------------                              ------------------
<S>                                                           <C>  
                  Limited Partner                                   1,600
                  General Partner                                       1
</TABLE>


Distributions are paid to Partners on a monthly basis. Through December 31, 1998
there have been $11,196,776 of distributions paid to Partners during the life of
the Partnership. The Partnership has made distributions during the prior three
years to Partners of $27.00 per unit totalling $2,422,973, $2,430,890, and
$2,442,420 for 1998, 1997, and 1996, respectively. As of December 31, 1998 the
Partnership had accrued distributions to Partners of $201,719.


ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31 
-------------------------------------------------------------------------------------------------------------------
                                     1998              1997              1996             1995             1994
-------------------------------------------------------------------------------------------------------------------
<S>                             <C>               <C>               <C>              <C>               <C>         
     Total Revenue              $  2,802,667      $  3,045,703      $  3,704,977     $  3,828,433      $  2,261,020
     Net Income (Loss)             1,664,367       (1,897,893)           196,197        1,551,153         1,295,435
     Total Assets                 12,615,397        18,799,155        21,261,096       27,664,248        25,084,132
     Line of Credit                   15,433         5,354,801         2,607,911        5,685,953         4,109,398
     Bank term loan                      -0-           583,233         1,386,361        2,119,863               -0-
     Provision for
         Possible Losses             199,060         3,628,090         1,092,551          828,911           360,000
     Distributions to Partners     2,422,973         2,430,890         2,442,420        2,442,692         1,555,991
     Earnings (Loss) per Unit          18.54           (21.11)              2.17            17.15             21.22
     Distributions per Unit            27.00             27.00             27.00            27.00             27.00
</TABLE>

The above selected financial data should be read in connection with the
financial statements and related notes appearing elsewhere in this report.



<PAGE>   7


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
         RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
          Results of Operations                          Year Ended           Year Ended              Year Ended
                                                        Dec. 31, 1998        Dec. 31, 1997           Dec. 31, 1996
                                                        -------------        -------------           -------------
<S>                                                  <C>                    <C>                   <C>           
         Description:

                  Lease Income                       $      1,848,567       $    2,843,989        $    3,383,689
                  Gain on Lease Termination                   768,583               85,520               260,706
                  Management Fees                             214,325              353,109               379,655
                  Administrative Services                      84,000               84,000                73,500
                  Interest Expense                            261,211              407,538               692,863
                  Professional Fees                           221,076              131,819               153,717
                  Provision for
                    Possible Losses                           199,060            3,628,090             1,092,551
                  Depreciation                                    -0-               51,031               392,774
                  Impairment Loss                              54,224              205,693               621,000
</TABLE>


The decline in lease income is due to the Partnership's investment in direct
financing leases steadily declining from $25,861,350 at December 31, 1995 to
$10,676,681 at December 31, 1998. This decline in lease financing levels is
primarily a result of the Partnership's charge-off of a number of leases within
its portfolio due to non-payment of lease receivables, and the early termination
of various leases which funded distributions to Partners and repayments of
borrowings. The Partnership's investment in direct financing leases decreased
from $20,323,063 at December 31, 1997, to $10,676,681 at December 31, 1998,
primarily due to early lease terminations in 1998. The proceeds from these
terminations in 1998 were $10,737,743, which enabled the Partnership to
recognize a gain on lease terminations of $768,583 in 1998, compared to $85,520
in 1997 and $260,706 in 1996. While these terminations allowed the Partnership
to recognize the gain, it also resulted in the lower lease income recorded in
1998.

At the end of a lease term, the Partnership will attempt to sell the equipment
under lease to the lessee for an amount equal to or exceeding the residual value
booked. Additionally, from time to time, the Partnership will receive a request
from a lessee for an early pay-off of their contract. The General Partner will
always quote an amount at least equal to the Partnership's net investment and
typically will exceed the net investment as evidenced by the net gains
recognized by the Partnership on lease terminations.

Certain lessees have requested early termination of their lease contracts with
the Partnership. As the payphone industry matures, the capital structure of
these lessees has reached a level whereby they are able to secure financing from
other sources. When this occurs, the Partnership will normally quote a buyout to
the lessee consisting of the entire contract balance remaining plus the residual
value of the assets. If this is not acceptable to the lessee, the Partnership
will discount the remaining contract payments plus the residual value of the
assets. Under either alternative, the Partnership will recognize a gain on the
early termination. In addition to some lessees improving capital structure, some
lessees have been acquired by other entities whose capital structure is such
that they also desire to refinance the equipment under lease to the Partnership.
As such, the Partnership's gain on lease terminations can and will vary from
year to year based on the number of requests received to terminate leases as
well as the size of the contract being terminated. The Partnership uses the cash
generated from these early terminations to purchase equipment for investments in
direct financing leases with other lessees.



<PAGE>   8

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (CONTINUED)

The Partnership had net income in 1998 of $1,664,367, but had comprehensive
income of $2,205,175. The difference of $540,808 is attributable to an
unrealized gain on securities available for sale. The Partnership currently has
two securities classified as available for sale. One of the securities was
purchased in 1998 for $770,250 and gained in value by $676,450 during the year.
The other security declined in value by $135,642 in 1998. The net unrealized
gain of $540,808 is shown on the income statement as other comprehensive income
and is taken directly to partner's equity on the balance sheet, along with
carrying the assets at market value.

Management fees are paid to the General Partner and represent 5% of the rental
and note payments received. Payments received in each of the three years ended
December 31 are as follows:


<TABLE>
<CAPTION>
                                           1998           1997         1996
                                           ----           ----         ----
<S>                                    <C>            <C>           <C>       
         Rental Payments Received      $4,286,480     $7,062,180    $7,593,100
</TABLE>


The General Partner receives a monthly reimbursement for administrative services
provided to the Partnership.

The decrease in interest expense in 1998 is a result of the Partnership
borrowing less funds compared to 1997 and 1996. Proceeds from various lease
terminations were also used to reduce the line of credit. The Partnership has a
line-of-credit agreement with a bank, allowing it to borrow the lesser of $4.0
million or 40% of the Partnership's qualified accounts, as defined in the
agreement. The line-of-credit agreement bears interest at a rate of 1.0% above
the prime lending rate and contains a minimum monthly charge of $4,000. The
balance outstanding under this line-of-credit agreement at December 31, 1998 was
$15,433. In August 1995, the Partnership obtained a term loan of $2,350,000 with
a bank secured by certain direct financing leases of the Partnership. This term
loan was obtained to capitalize on the favorable interest rate of the term loan
of 8.91% and to enable the Partnership to write more lease business and enhance
the Partnership's return. This term loan was paid off in August 1998.

Professional fees include payments for legal expenses, independent auditing
services, tax return preparation, and other accounting assistance. Professional
fees are higher in 1998 due to increased legal expenses resulting from
litigation regarding the non-payment of lease receivables.

On October 10, 1995, a lessee of the Partnership, Value-Added Communication,
Inc. ("VAC"), filed a petition seeking protection under Chapter 11 of the
Bankruptcy Act. The Partnership's net investment in its leases with this
customer was $1,947,904 at December 31, 1995. The bankruptcy court's Order
"Approving Emergency Sale" indicated that of the Partnership's total net
investment in direct financing leases with VAC, approximately $226,000 of leases
would be purchased from the Partnership by an unrelated third party for
approximately $121,000 resulting in a loss to the Partnership of $105,000. The
remaining net investment balance of approximately $1.7 million was comprised of
several leases of equipment in the hospitality telephone industry. This
equipment, however, was not in service. Based upon the best information
available to management, it appeared the Partnership would incur a loss of
approximately $616,000 on these remaining leases. This amount, therefore,
together with the loss of $105,000


<PAGE>   9


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (CONTINUED)

expected to be realized on the sale of the assets under the other lease, was
recorded as a provision for possible losses specifically related to VAC at
December 31, 1995. During 1996, as final settlement on the Partnership's claim
to the assets under lease, $580,597 was received from parties to the bankruptcy.
An additional loss of $646,307 was recognized in the second quarter of 1996.

On May 6, 1996, a lessee of the Partnership, United Tele-Systems of Virginia,
Inc. ("UTS"), filed a Voluntary Petition for Relief under Chapter 11 of the
Bankruptcy Code. The bankruptcy petition was dismissed on May 22, 1996 and, in
connection therewith, the Partnership exercised its right to manage the assets
leased to UTS. The net investment in the leases at the time the assets were
repossessed was approximately $686,000. The Partnership, the General Partner, an
affiliated partnership and UTS were named in a lawsuit, filed by another
creditor of UTS. The creditor was claiming $360,000 in compensatory damages and
$350,000 in punitive damages. Based on offers to purchase the pay telephone
equipment and an expected settlement offer related to the lawsuit, the
Partnership expected to incur a loss upon the sale or re-lease of this
equipment. Management charged $464,000 to the provision for possible loan and
lease losses for the expected loss in 1996 and reclassified its net investment
in the equipment, net of the specific allowance, to equipment under operating
leases pending its ultimate sale or re-lease under a direct finance lease. The
Equipment was sold during 1997 to another customer with no additional loss to
the Partnership. Also, the lawsuit was settled in 1998 with no additional loss
to the Partnership.

In May 1995, the Partnership exercised its right to manage the assets leased to
Telecable/Continental due to nonpayment of lease receivables. At the time the
Partnership assumed management of these assets, its net investment in the leases
and notes receivable approximated $2,400,000 and the Partnership subsequently
purchased approximately $200,000 of additional equipment. During 1996,
$1,431,000 of this net investment was leased to an unrelated third party under a
direct financing lease, which was paid off in December 1996. The remaining net
equipment cost, which had been depreciated to $938,693 and relates to hotel
satellite television equipment, is expected by management to be recovered
through the sale of the equipment. Such equipment cost has been adjusted for an
impairment loss of $621,000 in 1996, $205,693 in 1997, and $54,224 in 1998 to
reflect management's estimated fair market value of the equipment. The equipment
was held for sale by the Partnership throughout 1998.

Due to cash flow problems experienced during 1997 by a lessee of the
Partnership, North American Communications Group, Inc. ("NACG"), the
Partnership, in an attempt to protect the assets leased to NACG, advanced funds
to various entities to whom NACG owed money, subject to either the terms of the
leases or to promissory notes which were executed by NACG. The Partnership
assisted in arranging a management agreement between NACG and another entity to
provide services to customers of NACG associated with the Partnership's leases.
In spite of the funds advanced by the Partnership and the management contract,
the cash flow of NACG continued to deteriorate. During the last several months
of 1997, the General Partner actively solicited bids from parties to purchase
the assets associated with the Partnership leases to NACG. Based on the value of
similar assets and contract sites, management believed the equipment leased to
NACG had substantial value. However, the offers received were not deemed
adequate by the General Partner.

<PAGE>   10

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (CONTINUED)

Following a refusal by NACG to voluntarily execute a Deed in Lieu of
Foreclosure, the General Partner decided to institute a foreclose action against
NACG and its affiliates. Finally, the General Partner determined it was no
longer economically feasible to continue to advance funds on behalf of NACG,
discontinued doing so and informed all site operators of that decision. As a
result, the Partnership decided to provide for a specific loss reserve of
$3,319,159 at December 31, 1997, which was equal to the carrying value of the
leases and advances associated with NACG. The Partnership foreclosed on the
assets underlying the leases, and charged off the lease receivables to the
specific allowance in February 1998.

The allowance for possible lease losses is based upon a continuing review of
past lease loss experience, current economic conditions and the underlying lease
asset value of the portfolio. At the end of each quarter a review of the
allowance account is conducted. At a minimum it is the Partnership's desire to
maintain a loss reserve equal to 1.5 percent of the Partnership's investment in
leases and notes, exclusive of any specific reserves. The Partnership currently
has a loss reserve (exclusive of specific reserves) of $331,617 or 2.9% of the
lease and note portfolio. Management has determined to increase its general
allowance due to the loss history of the Partnership.

The Partnership has been unable to collect all of the property taxes it has paid
on behalf of customers leasing equipment from the Partnership. As a result, a
charge of $50,000 was made in 1998 and $114,677 in 1997 to reflect what
management believed to be uncollectible. The Partnership continues to pursue the
collection of charged-off tax receivables. Any amounts collected will serve as 
a recovery against amounts previously written off.

Specific losses or expected losses charged to the provision for possible lease
losses are as follows:


<TABLE>
<CAPTION>
                                1998              1997               1996    
                            -----------        ----------         ----------
<S>                         <C>                <C>                <C>       
VAC                         $       -0-        $      -0-         $  646,307
UTS                              14,101               -0-            464,000
North American                      -0-         3,319,159                -0-
Telecable/Continental            50,000               -0-                -0-
Property Taxes                   50,000           114,677                -0-
                            -----------        ----------         ----------
         TOTAL              $   114,101        $3,433,836         $1,110,307
                            ===========        ==========         ==========
</TABLE>


As of December 31, 1998 there were no customers with payments owed to the
Partnership which were over 90 days past due. When payments are past due more
than 90 days, the Partnership discontinues recognizing income on those customer
contracts. Management continues to monitor the contracts in the Partnership's
portfolio and will take the necessary steps to protect the Partnership's
investment.

The General Partner is engaged directly for its own account in the business of
acquiring and leasing equipment. The General Partner serves as the general
partner of Telecommunications Income Fund IX, L.P. ("TIF IX") and
Telecommunications Income Fund XI, L.P. ("TIF XI"), publicly owned limited
partnerships that are engaged in the equipment leasing business. Also, an
affiliate of the General Partner is the general partner


<PAGE>   11

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (CONTINUED)

of a privately offered active limited partnership. As of December 31, 1998, the
net proceeds of the private program, TIF IX, and TIF XI have been invested in
specific equipment. The activities of the General Partner, in regards to its
other leasing activities, has had no impact on the Partnership to date in
management's opinion.

The equipment that the Partnership leases is maintained by the lessee, and the
lessee is responsible for keeping the equipment upgraded with any improvements
that may be developed. The Partnership generally establishes the equipment's
residual value at 10% of the equipment's original cost. The Partnership
generally expects to realize the residual value by the sale of the equipment at
the expiration of the original lease term. The General Partner monitors the
maintenance and upgrades to the equipment and expects the Partnership to realize
residual values of at least 10%.

The General Partner is not aware of any regulatory issues that may have a
substantial negative impact on the telecommunications businesses to whom the
Partnership leases equipment. There are and will continue to be regulatory
issues in the telecommunications industry that the General Partner will monitor.

The equipment leases acquired by the Partnership have been financed to yield
rates of return between 15% and 20%. The lease terms vary from 36 months to 60
months. The rate charged on a particular lease depends on the size of the
transaction and the financial strength of the lessee.

Inflation affects the cost of equipment purchased and the residual values
realized when leases terminate and equipment is sold. The impact of inflation is
mitigated as any increases in lease related expenses are passed on to the
lessees through corresponding increases in rental rates as new leases are
entered into.


YEAR 2000 ISSUE: The Partnership recognizes that the arrival of the Year 2000
poses a unique challenge to the ability of all systems to recognize the date
change from December 31, 1999 to January 1, 2000. The cost of ensuring systems
are compatible with the Year 2000 are not believed to be material. There are no
non-information technology processes that the Partnership has identified which
would affect its operations. An assessment of the readiness of external entities
which it interfaces with, such as vendors, counterparties, customers, and
others, is ongoing. At the present the Partnership does not contemplate that any
specific charges will be incurred for this assessment, and if there are any
related expenditures, does not expect them to be significant. The Partnership
does not expect the Year 2000 impact on external parties to have any material
adverse impact on the Partnership.

The Partnership is assessing the impact of the Year 2000 issue on information
technology and non-information technology systems used by lessees. No lessee is
contractually obligated to become Year 2000 compliant or to disclose their
capabilities to the Partnership. The Partnership has not yet determined whether
the Year 2000 issue has been addressed by all of its customers. The Partnership
has contacted some of its customers and will continue to contact its customers
in 1999. If the Partnership's customers have not addressed this issue, it could
lead to non-payments of amounts owed to the Partnership.



<PAGE>   12



ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (CONTINUED)

The Partnership has determined that the software it utilizes in its operations
is compatible with the Year 2000. The Partnership utilizes an unrelated third
party for lease servicing. This third party vendor has been contacted and it has
been determined that their lease servicing application is year 2000 compliant. A
written confirmation regarding compliance of this application has been received
from the software developer.

<TABLE>
<CAPTION>
LIQUIDITY AND CAPITAL RESOURCES                          Year Ended            Year Ended         Year Ended
                                                        Dec. 31, 1998        Dec. 31, 1997       Dec. 31, 1996
                                                        -------------        -------------       -------------
<S>                                                     <C>                  <C>                 <C>       
Major Cash Sources (Uses):
          Operations                                       $2,033,964           $1,595,449          $1,938,010
          Net Proceeds (payments) from Line of Credit     (5,339,368)            2,746,890         (3,078,042)
          Repayments/Terminations of Leases                12,747,749            5,275,866           9,006,750
          Repayments of Notes Receivable                      872,178                5,490                 -0-
          Purchase of Equipment and Leases                (5,941,745)          (5,233,450)         (4,323,201)
          Distributions to Partners                       (2,422,973)          (2,430,890)         (2,442,420)
</TABLE>

The Partnership is required to establish working capital reserves of no less
than 1% of the proceeds to satisfy general liquidity requirements, operating
costs of equipment, and the maintenance and refurbishment of equipment. At
December 31, 1998, that working capital reserve, as defined, would be $226,025.
Actual cash on hand at December 31, 1998 was $67. While the cash balance is less
than the working capital reserve required, the Partnership can borrow on its
line of credit to satisfy this requirement.

At December 31, 1998, the Partnership had a line of credit agreement with a bank
that allows the Partnership to borrow the lesser of $4.0 million, or 40% of the
Partnership's Qualified Accounts as defined in the agreement. As of December 31,
1998, the balance outstanding under this line of credit was $15,433. With the
exception of those specific assets pledged as security under the bank term loan
agreement discussed below, the line of credit is secured by all assets of the
Partnership. Before any funds are borrowed, the Partnership first utilizes all
available excess cash. The Partnership's line of credit is used to acquire
additional leases as they become available. The line of credit matures on June
30, 2000 and is cancellable by the lender after giving a 90-day notice. The
General Partner believes amounts available under the line of credit are adequate
for the foreseeable future.

In August 1995, the Partnership obtained a term loan of $2,350,000 with a bank
secured by certain direct financing leases of the Partnership. This term loan
was obtained to capitalize on the favorable interest rate (8.91%) of the term
loan and to enable the Partnership to write more lease business and enhance the
Partnership's return. The term loan agreement is collateralized by certain
direct financing leases along with a second interest in all other Partnership
assets. The agreement is also guaranteed by the General Partner. Covenants under
the agreement require the Partnership, among other things, to be profitable, not
exceed a 40% debt to original equity raised ratio, and not sell a material
portion of its assets. Management obtained a waiver from the lending institution
in 1997. This term loan was paid off in August 1998.

Cash flow from operating activities has been less than the distributions to
Partners for 1998, 1997, and 1996.


<PAGE>   13



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

EQUITY PRICE SENSITIVITY
The table below provides information about the Partnership's marketable equity
securities that are sensitive to changes in prices. The table presents the
carrying amount and fair value at December 31, 1998.

<TABLE>
<CAPTION>
                           Carrying       Fair
                            Amount       Value
                         ----------   ----------
<S>                      <C>          <C>       
Common Stock-Company A   $1,446,700   $1,446,700
Common Stock-Company B        5,246        5,246
                         ----------   ----------
Total                    $1,451,946   $1,451,946
                         ==========   ==========
</TABLE>


The Partnership's primary market risk exposure with respect to marketable equity
securities is equity price. The Partnership's general strategy in owning
marketable equity securities is long-term growth in the equity value of emerging
companies in order to increase the rate of return to the limited partners over
the life of the Partnership. The primary risk of the portfolio is derived from
the underlying ability of the companies invested in to satisfy debt obligations
and their ability to maintain or improve common equity values. At December 31,
1998, the amount at risk was $1,451,946.

INTEREST RATE SENSITIVITY
The table below provides information about the Partnership's notes receivable
that are sensitive to changes in interest rates. For notes receivable, the table
presents principal cash flows and related weighted average interest by expected
maturity dates as of December 31, 1998.

<TABLE>
<CAPTION>
                               (Principal Amount)
         Expected              Fixed Rate                 Average
         Maturity Date         Notes Receivable           Interest Rate
         -------------         ----------------           -------------
<S>                            <C>                       <C>  
         1999                  $ 239,324                  14.2%
         2000                    258,648                  14.0%
         2001                    295,368                  14.0%
         2002                      4,993                  14.0%
                               ---------
         Total                 $ 798,333
                               =========

         Fair Value            $ 798,333
                               =========
</TABLE>


The Partnership manages interest rate risk, its primary market risk exposure
with respect to notes receivable, by limiting the terms of notes receivable to
no more than five years and generally requiring full repayment ratably over the
term of the note.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following financial statements and related information as of and for the
years ended December 31, 1998, 1997, and 1996 are included in Item 8:

     Independent Auditors' Report
     Balance Sheets
     Statements of Operations and Comprehensive Income (Loss)
     Statements of Changes in Partners' Equity
     Statements of Cash Flows
     Notes to Financial Statements

<PAGE>   14
INDEPENDENT AUDITORS' REPORT


To the Partners
Telecommunications Income Fund X, L.P.

We have audited the accompanying balance sheets of Telecommunications Income
Fund X, L.P. as of December 31, 1998 and 1997, and the related statements of
operations and comprehensive income (loss), changes in partners' equity and cash
flows for each of the three years in the period ended December 31, 1998. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Telecommunications Income Fund X, L.P. at
December 31, 1998 and 1997, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1998, in conformity
with generally accepted accounting principles.



DELOITTE & TOUCHE LLP

Cedar Rapids, Iowa
February 19, 1999


<PAGE>   15



TELECOMMUNICATIONS INCOME FUND X, L.P.

BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

ASSETS (Note 5)                                                    1998           1997
<S>                                                           <C>             <C>         
  Cash and cash equivalents                                   $     67,570    $      5,928
  Available-for-sale securities                                  1,451,946         140,888
  Net investment in direct financing leases
    and notes receivable (Note 2)                               11,475,014      21,827,573
  Allowance for possible loan and lease losses (Note 3)           (445,718)     (3,855,618)
                                                              ------------    ------------
  Direct financing leases and notes receivable, net             11,029,296      17,971,955
  Equipment held for sale (Note 4)                                  57,776         112,000
  Intangibles, less accumulated amortization of
    $37,498 in 1998 and $30,489 in 1997                               --             7,009
  Other assets                                                       8,809         561,375
                                                              ------------    ------------
TOTAL                                                         $ 12,615,397    $ 18,799,155
                                                              ============    ============

LIABILITIES AND PARTNERS' EQUITY

LIABILITIES:
  Line-of-credit agreement (Note 5)                           $     15,433    $  5,354,801
  Outstanding checks in excess of bank balance                     436,199            --
  Due to affiliates                                                 24,602          23,256
  Distributions payable to partners                                201,719         202,250
  Accrued expenses and other liabilities                           110,868         223,092
  Lease security deposits                                          170,958         509,544
  Note payable (Note 5)                                               --           583,233
                                                              ------------    ------------
           Total liabilities                                       959,779       6,896,176
                                                              ------------    ------------

PARTNERS' EQUITY, 100,000 units authorized (Notes 1 and 6):
  General partner, 40 units issued and outstanding                   7,934           8,272
  Limited partners, 89,613 units in 1998 and 89,849 units
      in 1997 issued and outstanding                            11,139,249      11,927,080
  Unrealized gain (loss) on available-for-sale securities          508,435         (32,373)
                                                              ------------    ------------
           Total partners' equity                               11,655,618      11,902,979
                                                              ------------    ------------

TOTAL                                                         $ 12,615,397    $ 18,799,155
                                                              ============    ============
</TABLE>


See notes to financial statements.




                                      -2-
<PAGE>   16
TELECOMMUNICATIONS INCOME FUND X, L.P.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                1998           1997           1996
<S>                                                         <C>            <C>            <C>        
REVENUES:
  Income from direct financing leases                       $ 1,848,567    $ 2,843,989    $ 3,383,689
  Gain on lease terminations                                    768,583         85,520        260,706
  Interest and other income                                     185,517        116,194         60,582
                                                            -----------    -----------    -----------
           Total revenues                                     2,802,667      3,045,703      3,704,977
                                                            -----------    -----------    -----------

EXPENSES:
  Management and administrative fees (Note 7)                   298,325        437,109        461,027
  Other general and administrative expenses                     325,480        214,135        248,565
  Interest expense                                              261,211        407,538        692,863
  Depreciation expense                                             --           51,031        392,774
  Provision for possible loan and lease losses (Note 3)         199,060      3,628,090      1,092,551
  Impairment loss on equipment (Note 4)                          54,224        205,693        621,000
                                                            -----------    -----------    -----------
           Total expenses                                     1,138,300      4,943,596      3,508,780
                                                            -----------    -----------    -----------

NET INCOME (LOSS)                                             1,664,367     (1,897,893)       196,197

OTHER COMPREHENSIVE INCOME (LOSS) -
  Unrealized gain (loss) on available for sale securities       540,808         10,943        (43,316)
                                                            -----------    -----------    -----------

COMPREHENSIVE INCOME (LOSS)                                 $ 2,205,175    $(1,886,950)   $   152,881
                                                            ===========    ===========    ===========

NET INCOME (LOSS) ALLOCATED TO:
  General partner                                           $       742    $      (842)   $        87
  Limited partners                                            1,663,625     (1,897,051)       196,110
                                                            -----------    -----------    -----------
                                                            $ 1,664,367    $(1,897,893)   $   196,197
                                                            ===========    ===========    ===========

NET INCOME (LOSS) PER PARTNERSHIP UNIT                      $     18.54    $    (21.11)   $      2.17
                                                            ===========    ===========    ===========

WEIGHTED AVERAGE PARTNERSHIP UNITS
  OUTSTANDING                                                    89,763         89,889         90,455
                                                            ===========    ===========    ===========

</TABLE>

See notes to financial statements.



                                      -3-
<PAGE>   17
TELECOMMUNICATIONS INCOME FUND X, L.P.

STATEMENTS OF CHANGES IN PARTNERS' EQUITY
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                 UNREALIZED
                                                                                                 GAIN (LOSS) ON      
                                                   GENERAL                LIMITED PARTNERS        AVAILABLE-         TOTAL
                                                   PARTNER            ----------------------       FOR-SALE         PARTNERS'    
                                                 (40 UNITS)            UNITS         AMOUNT       SECURITIES        EQUITY
<S>                                             <C>                   <C>       <C>             <C>             <C>         
BALANCE AT DECEMBER 31, 1995                    $     11,187          90,430    $ 18,626,700    $       --      $ 18,637,887

  Net income                                              87            --           196,110            --           196,197

  Distributions to partners
    ($27.00 per unit) (Note 6)                        (1,080)           --        (2,441,340)           --        (2,442,420)

  Withdrawal of limited partners                        --               (60)        (15,000)           --           (15,000)

  Change in unrealized loss on
    available-for-sale security                         --              --              --           (43,316)        (43,316)
                                                ------------          ------    ------------    ------------    ------------

BALANCE AT DECEMBER 31, 1996                          10,194          90,370      16,366,470         (43,316)     16,333,348

  Net loss                                              (842)           --        (1,897,051)           --        (1,897,893)

  Distributions to partners
    ($27.00 per unit) (Note 6)                        (1,080)           --        (2,429,810)           --        (2,430,890)

  Withdrawal of limited partners                        --              (521)       (112,529)           --          (112,529)

  Change in unrealized loss on
    available-for-sale security                         --              --              --            10,943          10,943
                                                ------------          ------    ------------    ------------    ------------

BALANCE AT DECEMBER 31, 1997                           8,272          89,849      11,927,080         (32,373)     11,902,979

  Net income                                             742            --         1,663,625            --         1,664,367

  Distributions to partners ($27.00 per unit)
    (Note 6)                                          (1,080)           --        (2,421,893)           --        (2,422,973)

  Withdrawal of limited partner                         --              (236)        (29,563)           --           (29,563)

  Change in unrealized gain on
    available-for-sale securities                       --              --              --           540,808         540,808
                                                ------------          ------    ------------    ------------    ------------
BALANCE AT DECEMBER 31, 1998                    $      7,934          89,613    $ 11,139,249    $    508,435    $ 11,655,618
                                                ============          ======    ============    ============    ============
</TABLE>


See notes to financial statements.


                                       -4-
<PAGE>   18

TELECOMMUNICATIONS INCOME FUND X, L.P.

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                1998           1997             1996
<S>                                                        <C>             <C>             <C>         
OPERATING ACTIVITIES:
  Net income (loss)                                        $  1,664,367    $ (1,897,893)   $    196,197
  Adjustments to reconcile net income (loss) to net cash
    from operating activities:
    Gain on lease terminations                                 (768,583)        (85,520)       (260,706)
    Depreciation of equipment                                      --            51,031         392,774
    Amortization of intangibles                                   7,009           8,863          21,626
    Provision for possible loan and lease losses                199,060       3,628,090       1,092,551
    Impairment loss on equipment                                 54,224         205,693         621,000
    Changes in operating assets and liabilities:
      Other assets                                              552,566        (383,863)         62,691
      Due to affiliates                                           1,346         (66,614)       (162,322)
      Accrued expenses and other liabilities                   (112,224)        135,662         (25,801)
      Outstanding checks in excess of bank balance              436,199            --              --
                                                           ------------    ------------    ------------
           Net cash from operating activities                 2,033,964       1,595,449       1,938,010
                                                           ------------    ------------    ------------

INVESTING ACTIVITIES:
  Investment in available-for-sale security                    (770,250)           --              --
  Acquisitions of, and purchases of equipment for,
    direct financing leases                                  (5,941,745)     (5,233,450)     (4,323,201)
  Repayments of direct financing leases                       2,010,006       3,796,745       3,709,079
  Proceeds from termination of direct financing leases       10,737,743       1,479,121       5,297,671
  Repayments of notes receivable                                872,178           5,490            --
  Issuance of notes receivable                                 (166,000)     (1,510,000)           --
  Net lease security deposits collected (paid)                 (338,586)        (41,832)       (100,188)
                                                           ------------    ------------    ------------
           Net cash from investing activities                 6,403,346      (1,503,926)      4,583,361
                                                           ------------    ------------    ------------

FINANCING ACTIVITIES:
  Proceeds from line-of-credit borrowings                     7,797,857      12,124,666      13,838,858
  Repayments of line-of-credit borrowings                   (13,137,225)     (9,377,776)    (16,916,900)
  Repayment of additional borrowings                           (583,233)       (803,128)       (733,502)
  Distributions and withdrawals paid to partners             (2,453,067)     (2,545,969)     (2,456,178)
                                                           ------------    ------------    ------------
           Net cash from financing activities                (8,375,668)       (602,207)     (6,267,722)
                                                           ------------    ------------    ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS             61,642        (510,684)        253,649

CASH AND CASH EQUIVALENTS AT
  BEGINNING OF YEAR                                               5,928         516,612         262,963
                                                           ------------    ------------    ------------
CASH AND CASH EQUIVALENTS AT
  END OF YEAR                                              $     67,570    $      5,928    $    516,612
                                                           ============    ============    ============
</TABLE>

                                                                     (Continued)

                                      -5-
<PAGE>   19

TELECOMMUNICATIONS INCOME FUND X, L.P.

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996 (CONCLUDED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                  1998          1997          1996
<S>                                                                           <C>           <C>           <C>        
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Interest paid                                                               $   302,529   $   387,992   $   683,925
  Noncash investing and financing activities:
    Available-for-sale security exchanged for payment on lease                       --            --         173,261
    Equipment reclassified from direct financing leases to operating leases          --            --         183,027
    Equipment reclassified from operating leases to held for sale                    --            --         317,693
    Equipment reclassified from operating leases to direct financing leases          --            --       1,381,952
    Change in unrealized gain (loss) on available-for-sale securities             540,808        10,943       (43,316)
    Conversion of leases to notes receivable                                    2,631,890          --            --
</TABLE>

See notes to financial statements.

                                      -6-
<PAGE>   20

TELECOMMUNICATIONS INCOME FUND X, L.P.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
--------------------------------------------------------------------------------

1.    SIGNIFICANT ACCOUNTING POLICIES

      ORGANIZATION AND NATURE OF OPERATIONS- Telecommunications Income Fund X,
      L.P. (the "Partnership") was formed on April 20, 1993 under the Iowa
      Limited Partnership Act. The general partner of the Partnership is Berthel
      Fisher & Company Leasing, Inc. (the "General Partner"), an Iowa
      corporation. During the offering period, which ended December 31, 1994,
      the Partnership sold 90,470 partnership interests at a price per unit of
      $250.

      The Partnership's operations are conducted throughout the United States.
      The Partnership primarily acquires equipment for lease to third parties
      under a direct finance arrangement. The lease agreements with individual
      customers are generally in excess of $500,000 and certain agreements
      exceed 10% of the Partnership's direct finance lease portfolio (see Note
      2). At any time after December 31, 1999 (or earlier if the General Partner
      determines it to be in the Partnership's best interest), the Partnership
      will cease reinvestment in equipment and leases and will begin the orderly
      liquidation of Partnership assets. The Partnership must dissolve on
      December 31, 2002, or earlier, upon the occurrence of certain events (see
      Note 6).

      USE OF ESTIMATES - The preparation of financial statements in conformity
      with generally accepted accounting principles requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the
      date of the financial statements and the reported amounts of revenues and
      expenses during the reporting period. Actual results could differ
      significantly from those estimated. Material estimates that are
      particularly susceptible to significant change in the near-term relate to
      the determination of the allowance for possible loan and lease losses and
      the estimated unguaranteed residual values of the Partnership's leased
      equipment.

      Most of the Partnership's leases and notes receivable are with customers
      that are in the entrepreneurial stage and, therefore, are highly leveraged
      and require financing in place of or to supplement financing from banks.
      Although the Partnership attempts to mitigate its credit risk through the
      use of a variety of commercial credit reporting agencies when processing
      the applications of its customers, failure of the Partnership's customers
      to make scheduled payments under their equipment leases and notes
      receivable could have a material near-term impact on the allowance for
      possible loan and lease losses.

      Realization of residual values depends on many factors, several of which
      are not within the Partnership's control, including general market
      conditions at the time of the original contract's expiration, whether
      there has been unusual wear and tear on, or use of, the equipment, the
      cost of comparable new equipment, the extent, if any, to which the
      equipment has become technologically or economically obsolete during the
      contract term and the effects of any additional or amended government
      regulations. These factors, among others, could have a material near-term
      impact on the estimated unguaranteed residual values.

      CERTAIN RISK CONCENTRATIONS - The Partnership's equipment leases are
      concentrated in pay telephones, hotel phone equipment, office equipment,
      and automated teller machines, representing approximately 59%, 0%, 20% and
      17% at December 31, 1998 and 69%, 17%, 4% and 1% at December 31, 1997,
      respectively, of the Partnership's direct finance lease portfolio.


                                      -7-


<PAGE>   21

      RELATED PARTY TRANSACTIONS - In fulfilling its role as general partner,
      Berthel Fisher & Company Leasing, Inc. enters into transactions with the
      Partnership in the normal course of business. Further, the Partnership
      also enters into transactions with affiliates of Berthel Fisher & Company
      Leasing, Inc. These transactions are set forth in the notes that follow.
      Management is of the opinion that these transactions are in accordance
      with the terms of the Agreement of Limited Partnership.

      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.

      AVAILABLE-FOR-SALE SECURITIES - The Partnership has an investment in
      marketable equity securities classified as available-for-sale.
      Available-for-sale securities are carried at fair value, with unrealized
      gains and losses reported as a separate component of partners' equity. At
      December 31, 1998, the securities had a cost of $943,511 and an estimated
      fair value of $1,451,946, resulting in an unrealized gain of $508,435
      (gross gain of $676,435 and gross loss of $168,000). Fair value is
      determined using published market prices.

      NET INVESTMENT IN DIRECT FINANCING LEASES - The Partnership's primary
      activity consists of leasing telecommunications equipment under direct
      financing leases generally over a period of three to five years. At the
      time of closing a direct financing lease, the Partnership records the
      gross lease contract receivable, the estimated unguaranteed residual value
      and unearned lease income. The unearned lease income represents the excess
      of the gross lease receivable plus the estimated unguaranteed residual
      value over the cost of the equipment leased. In addition, the Partnership
      capitalizes all initial direct costs associated with originating the
      direct financing lease. The unearned income and initial direct costs are
      amortized to income over the lease term so as to produce a constant
      periodic rate-of-return on the net investment in the lease. Lessees are
      responsible for all taxes, insurance and maintenance costs.

      The realization of the estimated unguaranteed residual value of leased
      equipment depends on the value of the leased equipment at the end of the
      lease term and is not a part of the contractual agreement with the lessee.
      Estimated residual values are based on estimates of amounts historically
      realized by the Partnership for similar equipment and are periodically
      reviewed by management for possible impairment.

      Direct financing leases are accounted for as operating leases for income
      tax purposes.

      NOTES RECEIVABLE - Notes receivable are carried at the principle balance
      outstanding. Interest income on notes receivable is accrued based on the
      principle amount outstanding.

      ALLOWANCE FOR POSSIBLE LOAN AND LEASE LOSSES - The Partnership performs
      credit evaluations prior to approval of a loan and lease. Subsequently,
      the creditworthiness of the customer and the value of the underlying
      assets are monitored on an ongoing basis. Under its lease agreements, the
      Partnership retains legal ownership of the leased asset. The Partnership
      maintains an allowance for possible loan and lease losses which could
      arise should customers become unable to discharge their obligations under
      the loan and lease agreements. The allowance for possible loan and lease
      losses is maintained at a level deemed appropriate by management to
      provide for known and inherent risks in the loan and lease portfolio. The
      allowance is based upon a continuing review of past loss experience,
      current economic conditions, delinquent loans and leases, an estimate of
      potential loss exposure on significant customers in adverse situations,
      and the underlying asset value. The consideration of such future potential
      losses also includes an evaluation for other than temporary declines in
      value of the underlying assets. Loans and leases which are deemed
      uncollectible are charged off and deducted from the allowance. The
      provision for possible loan and lease losses and recoveries are added to
      the allowance.




                                      -8-
<PAGE>   22


      EQUIPMENT - Equipment leased under operating leases was depreciated using
      the straight-line method over the estimated useful lives of the assets
      (five years) to the estimated residual value of the equipment at the end
      of the lease term. Estimated residual values were based on estimates of
      amounts historically realized by the Partnership for similar equipment and
      were periodically reviewed by management for possible impairment.

      Equipment held for sale is stated at lower of cost or estimated fair
      market value.

      INTANGIBLES - Intangibles consisted of organization costs incurred with
      the formation of the Partnership and financing costs incurred in
      connection with borrowing agreements. Deferred organization expenses were
      amortized over a five-year period. Deferred financing costs were amortized
      over the life of the related debt, which was approximately three years.

      SALE OF DIRECT FINANCE LEASES - The Partnership at times sells direct
      financing leases, on a limited recourse basis, to lenders in return for a
      cash payment. In the case of default by the lessee, the lender has a first
      lien on the underlying leased equipment. In the event the sale or re-lease
      proceeds from the underlying equipment do not satisfy the remaining
      lessee's obligation to the lender, the Partnership is responsible for a
      predetermined amount of that obligation. When the sale of direct finance
      leases occurs, proceeds from the sale, less the net book value of direct
      finance leases sold and an estimated loss allowance, are recorded as a
      component of gain on early termination of leases.

      TAX STATUS - Under present income tax laws, the Partnership is not liable
      for income taxes, as each partner recognizes a proportionate share of the
      Partnership income or loss in their income tax return. Accordingly, no
      provision for income taxes is made in the financial statements of the
      Partnership.

      NET INCOME (LOSS) PER PARTNERSHIP UNIT - Net income (loss) per partnership
      unit is based on the weighted average number of units outstanding
      (including both general and limited partners' units).

      IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS - In June 1997, the Financial
      Accounting Standards Board ("FASB") issued Statement of Financial
      Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income".
      SFAS No. 130 establishes standards for reporting and display of
      comprehensive income and its components in the financial statements. SFAS
      No. 130 is effective for the Partnership's year ended December 31, 1998.
      Financial statements for earlier periods provided for comparative purposes
      have been reclassified to conform with the current year presentation as
      required by SFAS No. 130.

      In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
      an Enterprise and Related Information". SFAS No. 131 establishes standards
      for the way that public business enterprises report information about
      operating segments in annual financial statements. It also establishes
      standards for related disclosures about products and services, geographic
      areas, and major customers. SFAS No. 131 is effective for the
      Partnership's year ended December 31, 1998. The Partnership operates in
      one segment.

      In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
      Instruments and Hedging Activities". SFAS No. 133 establishes standards
      for derivative instruments, including certain derivative instruments
      embedded in other contracts, (collectively referred to as derivatives) and
      for hedging activities. It requires that an entity recognize all
      derivatives as either assets or liabilities in the statement of financial
      position and measure those instruments at fair value. The recognition of
      gains or losses resulting from changes in the values of derivatives is
      based on the use of each derivative instrument and whether it qualifies
      for hedge accounting. SFAS No. 133 is effective for all fiscal quarters of
      fiscal years beginning after June 15, 1999. The Partnership has not yet
      determined the effect of SFAS No. 133 on the financial statements.





                                      -9-
<PAGE>   23

2.    NET INVESTMENT IN DIRECT FINANCING LEASES AND NOTES RECEIVABLE

      The Partnership's net investment in direct financing leases and notes
      receivable consists of the following at December 31, 1998 and 1997:


<TABLE>
<CAPTION>
                                                                           1998               1997
      <S>                                                              <C>             <C>         
      Minimum lease payments receivable                                $ 12,713,308    $ 22,500,795
      Estimated unguaranteed residual values                                644,853       2,256,257
      Unamortized initial direct costs                                       22,840          93,855
      Unearned income                                                    (2,704,320)     (4,527,844)
      Notes receivable                                                      798,333       1,504,510
                                                                       ------------    ------------
      Net investment in direct financing leases and notes receivable   $ 11,475,014    $ 21,827,573
                                                                       ============    ============
</TABLE>

      At December 31, 1998, future minimum payments to be received under the
      direct financing leases and the estimated unguaranteed residuals to be
      realized at the expiration of the direct financing leases are as follows:

<TABLE>
<CAPTION>
                                           MINIMUM         ESTIMATED
                                            LEASE        UNGUARANTEED
                                           PAYMENTS        RESIDUAL
                                          RECEIVABLE        VALUES
                                          ----------   --------------
      <S>                                <C>           <C>             
      Years ending December 31:
            1999                         $ 4,040,739   $   122,981     
            2000                           3,365,887       226,987     
            2001                           2,774,613        81,117     
            2002                           1,963,653        55,742     
            2003                             568,416       120,014     
      Thereafter                                --          38,012     
                                         -----------   -----------     
      Total                              $12,713,308   $   644,853     
                                         ===========   ===========     
</TABLE>


      The Partnership, General Partner and certain affiliates of the General
      Partner purchase directly and indirectly a substantial portion of
      telecommunications equipment under lease from Intellicall, Inc., a
      publicly-held company. The General Partner's parent and certain limited
      partners are investors in a limited partnership which owns approximately
      5% of the outstanding common stock of Intellicall, Inc. In addition, a
      principal stockholder of the General Partner's parent is also an investor
      in this limited partnership.

      Additionally, the Partnership leases equipment to certain companies for
      which the General Partner or its affiliates have an ownership interest in,
      provide financing to, or provide investment advisory services for such
      companies. The Partnership's net investment in direct financing leases
      with these companies approximated $6,276,688 and $4,367,170 at December
      31, 1998 and 1997, respectively.




                                      -10-
<PAGE>   24

      Four customers each account for 10% or more of the amount of income from
      direct financing leases for the years ended December 31, 1998, 1997 and
      1996, as follows:

<TABLE>
<CAPTION>
                            1998   1997  1996
      <S>                   <C>    <C>   <C>
      Customer A             18%    9%   --% 
      Customer B             --    15     9
      Customer C             --    15    14
      Customer D             21     9    --
</TABLE>


3.    ALLOWANCE FOR POSSIBLE LOAN AND LEASE LOSSES

      The changes in the allowance for possible loan and lease losses for the
years ended December 31, 1998, 1997 and 1996 are as follows:


<TABLE>
<CAPTION>
                                       1998           1997             1996
<S>                                <C>            <C>            <C>        
Balance at beginning of year       $ 3,855,618    $   323,398    $ 1,188,911
  Provision                            199,060      3,628,090      1,092,551
  Charge-offs, net of recoveries    (3,608,960)       (95,870)    (1,958,064)
                                   -----------    -----------    -----------
Balance at end of year             $   445,718    $ 3,855,618    $   323,398
                                   ===========    ===========    ===========
</TABLE>


      The allowance for possible loan and lease losses consisted of specific
      allowances for leases of $114,102, $3,319,159 and $21,000 and a general
      unallocated allowance of $331,616, $536,459 and $302,398, respectively, at
      December 31, 1998, 1997 and 1996.

      On October 10, 1995, a lessee of the Partnership, Value-Added
      Communication, Inc. ("VAC"), filed a petition seeking protection under
      Chapter 11 of the Bankruptcy Act. The Partnership's net investment in its
      leases with this customer was $1,947,904 at December 31, 1995. The
      bankruptcy court's Order "Approving Emergency Sale" indicated that of the
      Partnership's total net investment in direct financing leases with VAC,
      approximately $226,000 of leases, would be purchased from the Partnership
      by an unrelated third party for approximately $121,000 resulting in a loss
      to the Partnership of $105,000. The remaining net investment balance
      comprised several leases of equipment in the hospitality telephone
      industry. This equipment, however, was not in service. Based upon the best
      information available to management, it appeared the Partnership would
      sustain some loss with respect to these remaining leases. Management's
      best estimate of the amount of the loss to the Partnership was that the
      Partnership may incur a loss of approximately $616,000 on these remaining
      leases. This amount, therefore, together with the loss of $105,000
      expected to be realized on the sale of the assets under the other leases,
      was recorded as a provision for possible loan and lease losses
      specifically related to VAC at December 31, 1995. During 1996, as
      settlement on the Partnership's claim to the assets under lease, $580,597
      was received from sale of the assets and from parties to the bankruptcy.
      Therefore, an additional loss of $646,307 was recognized in 1996.


                                      -11-
<PAGE>   25


      On May 6, 1996, a lessee of the Partnership, United Tele-Systems of
      Virginia, Inc. ("UTS"), filed a Voluntary Petition for Relief under
      Chapter 11 of the Bankruptcy Code. The bankruptcy petition was dismissed
      on May 22, 1996 and, in connection therewith, the Partnership exercised
      its right to manage the assets leased to UTS. The net investment in the
      leases at the time the assets were repossessed was approximately $686,000.
      The Partnership, the General Partner, an affiliated partnership and UTS
      were named in a lawsuit, filed by another creditor of UTS. The creditor
      was claiming $360,000 in compensatory damages and $350,000 in punitive
      damages. Based on offers to purchase the pay telephone equipment and an
      expected settlement offer related to the lawsuit, the Partnership expected
      to incur a loss upon the sale or re-lease of this equipment. Management
      charged $464,000 to the provision for possible loan and lease losses for
      the expected loss in 1996 and reclassified its net investment in the
      equipment, net of the specific allowance, to equipment under operating
      leases pending its ultimate sale or re-lease under a direct finance lease.
      This equipment was sold during 1997 to another customer with no additional
      loss to the Partnership. Also, the lawsuit was settled in 1998 with no
      additional loss to the Partnership.

      Due to cash flow problems experienced during 1997 by a lessee of the
      Partnership, North American Communications Group, Inc. ("NACG"), the
      Partnership, in an attempt to protect the assets leased to NACG, advanced
      funds to various entities to whom NACG owed money related to the operation
      of such leased assets. In addition, the Partnership assisted in arranging
      a management agreement between NACG and another entity to attempt to
      improve NACG's cash flow generated by the leased assets. In spite of the
      funds advanced by the Partnership and the management agreement, the cash
      flow of NACG continued to deteriorate. During the past several months, the
      General Partner actively solicited bids from parties to purchase the
      assets associated with the Partnership leases to NACG. Based on the value
      of similar assets and contract sites, management believed the equipment
      leased to NACG had substantial value. However, the offers received were
      not adequate to cover additional funds which were required to be advanced
      to keep the equipment sites operating. The General Partner, therefore,
      determined it was no longer economically feasible to continue to advance
      funds on behalf of NACG, discontinued doing so and informed all site
      operators of that decision. As a result, the Partnership decided to
      provide for a specific allowance of $3,319,159 at December 31, 1997 which
      was equal to the carrying value of the leases and advances associated with
      NACG. Such leases and advances were charged-off to the allowance for
      possible loan and lease losses during 1998.

      The Partnership and an affiliated partnership, Telecommunications Income
      Fund IX, have initiated a foreclosure action against NACG and the
      guarantors under the leases and advances seeking sale of the assets and a
      judgment against NACG and the guarantors for any deficiency. Amounts, if
      any, received will be credited to the allowance for possible loan and
      lease losses.

4.    EQUIPMENT HELD FOR SALE

      In May 1995, the Partnership exercised its right to manage the assets
      leased to Telecable/Continental due to nonpayment of lease receivables. At
      the time the Partnership assumed management of these assets, its net
      investment in the leases and notes receivable approximated $2,400,000 and
      the Partnership subsequently purchased approximately $200,000 of
      additional equipment. During 1996, $1,431,000 of this net investment was
      leased to an unrelated third party under a direct financing lease, which
      was paid off in December 1996. The remaining net equipment cost, which had
      been depreciated to $938,693 and relates to hotel satellite television
      equipment, is expected by management to be recovered through the sale of
      the equipment. Such equipment cost has been adjusted for an impairment
      loss of $621,000 in 1996, $205,693 in 1997 and $54,224 in 1998, to reflect
      management's estimated fair market value of the equipment. The equipment
      was held for sale by the Partnership throughout 1997 and 1998.



                                      -12-
<PAGE>   26


5.    BORROWING AGREEMENTS

      The Partnership has a line-of-credit agreement with a bank which bears
      interest at a variable rate of 8.75%, 9.5% and 10.13% at December 31,
      1998, 1997 and 1996, respectively. The agreement was amended August 26,
      1998 to extend the maturity date to June 30, 2000, reduce the borrowing
      amount to the lesser of $4.0 million or 40% of Qualified Accounts, as
      defined in the agreement, and require minimum monthly interest payments of
      $4,000 beginning in December 1998. The agreement is cancellable by the
      lender after giving a 90-day notice and is collateralized by substantially
      all assets of the Partnership. The line-of-credit is guaranteed by the
      General Partner and certain affiliates of the General Partner. The General
      Partner believes amounts available under the line of credit are adequate
      for the foreseeable future.

      The Partnership also had an installment loan agreement which bore interest
      at 8.91% and was due in monthly installments through November 1998. The
      agreement was collateralized by certain direct financing leases and a
      second interest in all other Partnership assets. The agreement was also
      guaranteed by the General Partner. The loan was repaid during 1998.

6.    LIMITED PARTNERSHIP AGREEMENT

      The Partnership was formed pursuant to an Agreement of Limited Partnership
      dated as of April 20, 1993 and amended August 12, 1993 (the "Agreement").
      The Agreement outlines capital contributions to be made by the partners
      and the allocation of cash distributions, net income and net loss to the
      partners. Capital contributions by the partners to the partnership consist
      of the $10,000 contributed by the General Partner and the amounts
      contributed by limited partners for the purchase of their units.

      Net income or net loss allocated to the limited partners will be
      apportioned among them based on the number of limited partnership units
      held and on the number of months within the respective year that such
      units were held. Any share of Partnership net loss will first be allocated
      to the limited partners to the extent of their positive capital account
      balances. Any share of additional net loss will be allocated to the
      General Partner. Any Partnership net income will first be allocated to
      partners with negative capital accounts in proportion to, and to the
      extent of, such negative capital accounts. Except as provided below, any
      additional net income will then be allocated to the General Partner and
      limited partners based on number of units held. During liquidation of the
      Partnership, when cash distributions are to be made 80% to the limited
      partners and 20% to the General Partner (see below), net income will be
      allocated 80% to the limited partners and 20% to the General Partner.

      During the Partnership's operating phase, to the extent there is cash
      available for distribution, cash distributions will be made on a monthly
      basis in the following order of priority: first, to reimburse the General
      Partner for administrative services it provides to the Partnership, as
      further described in the Agreement (see Note 7); second, to the limited
      partners up to amounts representing a 10.8% cumulative annual return on
      their adjusted capital contribution (as defined); and, third, to the
      General Partner, representing a monthly equipment management fee of 5% of
      the gross rental payments received by the Partnership (see Note 7). To the
      extent that cash is not available to pay all or a portion of the equipment
      management fee pursuant to the above priority distributions, such fee will
      accrue and accumulate. Any remaining cash distributions after payment of
      the above (including arrearages) will be paid, at the discretion of the
      General Partner, to the limited partners.


                                      -13-
<PAGE>   27

      During the Partnership's liquidation phase, cash available for
      distribution will be distributed in the following order of priority:
      first, for payment of the General Partner's administrative services
      expense described above; second, to the limited partners for any arrearage
      in their 10.8% cumulative priority return; third, to the limited partners
      for 100% of their adjusted capital contributions; fourth, to the limited
      partners, distributions totaling 10.8% annually, noncompounded, on their
      adjusted capital contributions; fifth, to the General Partner for any
      arrearage in its equipment management fee; and, sixth, 80% to the limited
      partners and 20% to the General Partner (provided, however, that the
      General Partner will not receive such amounts unless the limited partners
      have received total distributions equal to their capital contribution plus
      a 10.8% annualized return).

7.    MANAGEMENT AND SERVICE AGREEMENTS

      The Partnership pays an equipment management fee, equal to 5% of the
      amount of gross rental payments received, to the General Partner. During
      the years ended December 31, 1998, 1997 and 1996, those management fees
      aggregated $214,325, $353,109 and $387,527, respectively.

      In addition, the General Partner is reimbursed for certain other costs
      under an administrative services agreement. Amounts incurred by the
      Partnership pursuant to this agreement amounted to $84,000, $84,000 and
      $73,500 for the years ended December 31, 1998, 1997 and 1996,
      respectively.

      As a part of the issuance of partnership units, the Partnership paid
      commissions of 10% to Berthel Fisher & Company Financial Services, Inc., a
      broker-dealer affiliated with the General Partner, and reimbursed other
      offering expenses of up to 4% of the gross proceeds to the General
      Partner. These fees have been treated as syndication costs and charged
      directly to partners' equity.




                                      -14-
<PAGE>   28

8.    RECONCILIATION OF FINANCIAL AND INCOME TAX REPORTING BASIS

      A reconciliation of net income (loss) for financial reporting purposes
      with the related amount reported for income tax purposes for the years
      ended December 31, 1998, 1997 and 1996 is as follows:

<TABLE>
<CAPTION>
                                  1998                           1997                         1996
                         -------------------------    --------------------------    -------------------------
                                              PER                         PER                           PER
                             AMOUNT           UNIT        AMOUNT          UNIT         AMOUNT           UNIT
<S>                     <C>            <C>            <C>            <C>            <C>            <C>        
Net income (loss) for
  financial reporting
  purposes              $ 1,664,367    $     18.54    $(1,897,893)   $    (21.11)   $   196,197    $      2.17
Adjustment to
  convert direct
  financing leases to
  operating leases
  for income tax
  purposes                 (931,343)        (10.37)      (587,372)         (6.53)       490,539           5.43
Net change in
  allowance for
  possible loan and
  lease losses           (3,409,900)        (37.98)     3,532,220          39.29       (865,513)         (9.57)
Gain on  lease
  terminations              673,200           7.49       (715,724)         (7.96)     1,314,157          14.54
                        -----------    -----------    -----------    -----------    -----------    -----------
Net income (loss)
  for income tax
  reporting purposes    $(2,003,676)   $    (22.32)   $   331,231    $      3.69    $ 1,135,380    $     12.57
                        ===========    ===========    ===========    ===========    ===========    ===========

</TABLE>

9.    DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

      The fair value amounts disclosed below are based on estimates prepared by
      management of the Partnership based on valuation methods appropriate in
      the circumstances. Generally accepted accounting principles do not require
      disclosure for lease contracts. The carrying amount for financial
      instruments included among cash and cash equivalents, line-of-credit
      agreement, and other short-term payables approximates their fair value
      because of the short maturity of those instruments or the variable
      interest rate feature of the instrument. Also, the Partnership's
      available-for-sale securities are reported at market value. The estimated
      fair value of other significant financial instruments are based
      principally on discounted future cash flows at rates commensurate with the
      credit and interest rate risk involved.

      The estimated fair values of the Partnership's other significant financial
      instruments are as follows at December 31, 1998 and 1997:

<TABLE>
<CAPTION>
                                    1998                           1997
                         -------------------------   ---------------------------
                          CARRYING         FAIR        CARRYING          FAIR
                          AMOUNT          VALUE         AMOUNT           VALUE
      <S>                <C>          <C>             <C>             <C>        
      Note payable       $     --     $     --       $  583,233       $  577,030  
      Notes receivable      798,333      798,333      1,504,510        1,504,510  
                                                 
</TABLE>
                                   * * * * *


                                      -15-
<PAGE>   29

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         None


                                    PART III

ITEM 10. DIRECTORS & EXECUTIVE OFFICERS OF THE REGISTRANT

         A.    The General Partner of the registrant:

               Berthel Fisher & Company Leasing, Inc., an Iowa corporation.

         B.    Executive officers of the General Partner of the Registrant:

       Thomas J. Berthel (age 47) - Mr. Berthel is the Chief Executive Officer
and Director of the General Partner, a position he has held since the General
Partner's inception in 1988. Mr. Berthel is also President and a Director of the
General Partner's parent, Berthel Fisher & Company, Inc. ("Berthel Fisher"),
which he founded in 1985, and Berthel Fisher's other subsidiaries, Berthel
Fisher & Company Financial Services, Inc.; Berthel Fisher & Company Management
Corp.; Berthel Fisher & Company Planning, Inc.; and one other corporation which
acts as general partner of a separate private program. He also serves as the
Chairman of the Board and Director of Amana Colonies Golf Course, Inc. Mr.
Berthel holds a bachelor's degree from St. Ambrose College in Davenport, Iowa
(1974). From 1974 to 1982, Mr. Berthel was President and majority shareholder of
Insurance Planning Services Corporation in Maquoketa, Iowa, which was engaged in
the operation of a securities and insurance business. Mr. Berthel holds a
Financial and Operation Principal license issued by the National Association of
Securities Dealers, Inc. Mr. Berthel is also a Certified Life Underwriter. Mr.
Berthel also serves as an individual general partner of the limited partnership
referred to above. Mr. Berthel received a MBA degree from the University of Iowa
in 1993.

       Ronald O. Brendengen (age 44) - Mr. Brendengen is the Treasurer, Chief
Financial Officer, and a Director (1988 to present) of the General Partner. He
was elected to his current offices in October 1996. He served as Treasurer and
Chief Financial Officer since October 1996. He has also served as Secretary
(1994 - March, 1995), Treasurer (1988 - August 1995) and Chief Financial Officer
(1994 - August 1995) of the General Partner. He served as Controller
(1985-1993), Treasurer (1987-present), Chief Financial Officer, Secretary and a
Director (1987-present), and was also elected Chief Operating Officer in January
1998, of Berthel Fisher & Company, the parent company of the General Partner.
Mr. Brendengen serves as the Treasurer, Chief Financial Officer and a Director
of Berthel Fisher & Company Planning, Inc., the trust advisor of Berthel Growth
& Income Trust I, a company required to file reports pursuant to the Securities
Exchange Act of 1934. He also serves in various offices and as a Director of
each subsidiary of Berthel Fisher & Company. Mr. Brendengen holds a certified
public accounting certificate and worked in public accounting during 1984 and
1985. From 1979 to 1984, Mr. Brendengen worked in various capacities for Morris
Plan and MorAmerica Financial Corp., Cedar Rapids, Iowa. Mr. Brendengen attended
the University of Iowa before receiving a bachelor's degree in Accounting and
Business Administration with a minor in Economics from Mt. Mercy College, Cedar
Rapids, Iowa, in 1978.
<PAGE>   30

DIRECTORS & EXECUTIVE OFFICERS OF THE REGISTRANT (CONTINUED)

       Nancy L. Lowenberg (age 40) - Ms. Lowenberg has been elected Vice
President and Chief Operating Officer of the General Partner beginning January
2, 1997. From September 1986 to December 1996, Ms. Lowenberg was employed by
Firstar Bank Iowa, N.A., in Cedar Rapids. Since 1989, Ms. Lowenberg was Vice
President Commercial Loans. As Vice President Commercial Loans, she was
relationship manager for 62 accounts with approximately $70,000,000 of committed
credit. She had responsibility for credit quality, annual review and maintenance
of existing accounts and business development. From 1981-1986, Ms. Lowenberg was
employed by Firstar Bank Systems. Ms. Lowenberg received her Bachelor of Science
Agricultural Business with a minor in Finance in 1981 from Iowa State
University, Ames, Iowa.




<PAGE>   31


ITEM 11.  EXECUTIVE COMPENSATION


          Set forth is the information relating to all direct remuneration paid
          or accrued by the Registrant during the last three years to the
          General Partner:


<TABLE>
<CAPTION>
(A)                           (B)        (C)                        (C1)             (C2)              (D)
                                                                                     Securities of
                                                                                     property
                                                                                     insurance        Aggregate
                                                                                     benefits or      of
                                         Cash and Cash                               reimbursement    contingent
Name of individual            Year       equivalent forms                            personal         or forms of
and capacities served         Ended      of remuneration           Fees              benefits         remuneration
------------------------------------------------------------------------------------------------------------------
<S>                           <C>                 <C>             <C>                <C>              <C>
Berthel Fisher & Co.          1998                $0              $298,325            $0                  $0

Leasing, Inc.                 1997                $0              $437,109            $0                  $0

General Partner               1996                $0              $453,165            $0                  $0

</TABLE>

<PAGE>   32


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



      (a) No person owns of record, or is known by the Registrant to own
          beneficially, more than five percent of the Partnership Units.

      (b) The General Partner of the Registrant owns Units of the Registrant set
          forth in the following table.


<TABLE>
<CAPTION>
      (1)                     (2)                          (3)                      (4)

                      Name and Address of          Amount and Nature of
Title of Class        Beneficial Ownership         Beneficial Ownership       Percent of Class
--------------        --------------------         --------------------       ----------------
<S>                   <C>                          <C>                        <C>

         Units        Berthel Fisher & Co.         Forty (40) Units;             0.04%
                      Leasing, Inc.                sole owner.
                      100 2nd Street S.E.
                      Cedar Rapids, IA 52401
</TABLE>


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Related party transactions are described in Notes 2 and 7 of Notes to
          Financial Statements.



<PAGE>   33



                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K



     (a)      1.  Financial Statements.

                                                                        Page No.

              Balance Sheets at December 31, 1998 and December 31, 1997     15

              Statements of Operations and Comprehensive Income (Loss)
              for the years ended December 31, 1998, December 31, 1997
              and December 31, 1996                                         16

              Statements of Changes in Partners' Equity for the years ended
              December 31, 1998, December 31, 1997 and 
              December 31, 1996                                             17

              Statements of Cash Flows for the years ended December
              31, 1998, December 31, 1997 and December 31, 1996             18

              Notes to Financial Statements                                 20


              2.       Financial Statements Schedules

              Information pursuant to Rule 12-09 (Schedule II) is included
              in the financial statements and notes thereto.

              3.       Exhibits

                       3,4  Amended and Restated Agreement of Telecommunications
                            Income Fund X, L.P.  currently in effect dated as of
                            August 19, 1993(1)

              6.       Reports on Form 8-K
                       No reports on Form 8-K were filed in the fourth
                       quarter of 1998.




-----------------------

     (1) Incorporated herein by reference to Exhibit A in the Partnership's
registration statement on Form S-1, effective August 27, 1993





<PAGE>   34


                                   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.


                     TELECOMMUNICATIONS INCOME FUND X, L.P.
                     --------------------------------------
                                  (REGISTRANT)

By Berthel Fisher & Company Leasing, Inc.

By: /s/ Thomas J. Berthel                                   Date: March 24, 1999
   --------------------------------------
Thomas J. Berthel
President

By Berthel Fisher & Company Leasing, Inc.

By: /s/ Ronald O. Brendengen                               Date: March 24, 1999
   --------------------------------------
Ronald O. Brendengen
Chief Financial Officer, Treasurer


       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.

/s/  Thomas J. Berthel                                      Date: March 24, 1999
----------------------------------------------------
Thomas J. Berthel
Chief Executive Officer
President, Director
Berthel Fisher & Company Leasing, Inc.
Corporate General Partner

/s/ Nancy L. Lowenberg                                      Date: March 24, 1999
----------------------------------------------------
Nancy L. Lowenberg
Executive Vice President, General Mgr., Director
Berthel Fisher & Company Leasing, Inc.
Corporate General Partner

/s/ Ronald O. Brendengen                                    Date: March 24, 1999
----------------------------------------------------
Ronald O. Brendengen
Treasurer, Director
Berthel Fisher & Company Leasing, Inc.
Corporate General Partner

/s/ Daniel P. Wegmann                                       Date: March 24, 1999
--------------------------------------------
Daniel P. Wegmann
Controller
Berthel Fisher & Company Leasing, Inc.
Corporate General Partner


<PAGE>   35





                                  EXHIBIT INDEX




       3,4  Amended and Restated Agreement of 
            Telecommunications Income Fund IX, L.P. currently in 
            effect dated as of August 12, 1991 (1)




---------------------
       (1)      Incorporated herein by reference to Partnership
                Exhibit A to the prospectus included in the
                Partnership's post effective amendment No. 4 to Form
                S-1 registration statement filed on December 22,
                1992.