SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                                
                           FORM 10-KSB
                                
             Annual Report Under Section 13 or 15(d)
             Of The Securities Exchange Act Of 1934
                                
          For the Fiscal Year Ended:  December 31, 1998
                                
                Commission file number:  0-14263
                                
          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP
         (Name of Small Business Issuer in its Charter)

        State of Minnesota                41-1511293
(State or other Jurisdiction of     (I.R.S. Employer)
Incorporation or Organization)     Identification No.)

     1300 Minnesota World Trade Center, St. Paul, Minnesota 55101
            (Address of Principal Executive Offices)

                           (651) 227-7333
                   (Issuer's telephone number)

Securities registered pursuant to Section 12(b) of the Act:
                                 Name of each exchange on
     Title of each class             which registered
             None                          None

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

                      Limited Partnership Units
                        (Title of class)
                                
Check  whether  the issuer (1) filed all reports required  to  be
filed  by Section 13 or 15(d) of the Securities Exchange  Act  of
1934  during the past 12 months (or for such shorter period  that
the  registrant was required to file such reports), and  (2)  has
been subject to such filing requirements for the past 90 days.

                         Yes  [X]        No

Check if disclosure of delinquent filers in response to Rule  405
of  Regulation  S-B  is  not  contained  in  this  Form,  and  no
disclosure  will  be contained, to the best of  the  registrant's
knowledge,   in   definitive  proxy  or  information   statements
incorporated by reference in Part III of this Form 10-KSB or  any
amendment to this Form 10-KSB.  [X]

The  Issuer's  revenues  for year ended December  31,  1998  were
$549,406.

As  of  February 28, 1999, there were 7,065.128 Units of  limited
partnership interest in the registrant outstanding and  owned  by
nonaffiliates  of  the registrant, which Units had  an  aggregate
market  value (based solely on the price at which they were  sold
since there is no ready market for such Units) of $7,065,128.

               DOCUMENTS INCORPORATED BY REFERENCE

 The registrant has not incorporated any documents by reference
                        into this report.
                                
         Transitional Small Business Disclosure Format:
                                
                         Yes         No   [X]


                             PART I

ITEM 1.   DESCRIPTION OF BUSINESS.

        AEI  Real  Estate  Fund  85-A  Limited  Partnership  (the
"Partnership" or the "Registrant") is a limited partnership which
was  organized pursuant to the laws of the State of Minnesota  on
April  15,  1985.   The  registrant is  comprised  of  Net  Lease
Management  85-A, Inc. (NLM) as Managing General Partner,  Robert
P.  Johnson as the Individual General Partner, and purchasers  of
partnership  units as Limited Partners.  The Partnership  offered
for  sale up to $7,500,000 of limited partnership interests  (the
"Units")  (7,500  Units  at  $1,000  per  Unit)  pursuant  to   a
registration   statement  effective  February   8,   1985.    The
Partnership  commenced operations on April 15, 1985 when  minimum
subscriptions  of  1,300 Limited Partnership  Units  ($1,300,000)
were  accepted.  The Partnership's offering terminated  June  20,
1985  when  the  maximum  subscription  limit  of  7,500  Limited
Partnership Units ($7,500,000) was reached.

        The Partnership was organized to acquire, initially on  a
debt-free   basis,  existing  and  newly  constructed  commercial
properties located in the United States, to lease such properties
to  tenants under triple net leases, to hold such properties  and
to  eventually sell such properties.  From subscription proceeds,
the  Partnership  purchased eight properties,  including  partial
interests in two properties, totaling $6,103,065.  The balance of
the   subscription  proceeds  was  applied  to  organization  and
syndication  costs,  working capital reserves and  distributions,
which  represented a return of capital.  The properties  are  all
commercial,  single  tenant buildings  leased  under  triple  net
leases.

       The Partnership will hold its properties until the General
Partners  determine  that the sale or other  disposition  of  the
properties   is   advantageous  in  view  of  the   Partnership's
investment  objectives.  In deciding whether to sell  properties,
the  General  Partners will consider factors  such  as  potential
appreciation,  net  cash flow and income tax considerations.   In
addition,  certain lessees have been granted options to  purchase
properties  after  a  specified portion of  the  lease  term  has
elapsed.   It is anticipated that the Partnership will  sell  its
properties  within  twelve  years after  acquisition.   Prior  to
commencing  the  liquidation  of  the  Partnership,  the  General
Partners may reinvest the proceeds from the sale of properties in
additional  properties,  provided that  sufficient  proceeds  are
distributed  to  the Limited Partners to pay  federal  and  state
income  taxes related to any taxable gain recognized as a  result
of  the  sale.  At any time prior to selling the properties,  the
Partnership may mortgage one or more of its properties in amounts
not exceeding 50% of the fair market value of the property.

Leases

       Although there are variations in the specific terms of the
leases,  the following is a summary of the general terms  of  the
Partnership's  leases.   The properties  are  leased  to  various
tenants  under  triple  net  leases,  which  are  classified   as
operating  leases.   Under  a triple net  lease,  the  lessee  is
responsible  for  all real estate taxes, insurance,  maintenance,
repairs  and  operating expenses for the property.   The  initial
lease  terms are for 5 to 20 years.  The leases provide for  base
annual  rental  payments,  payable in monthly  installments,  and
contain  rent  clauses which entitle the Partnership  to  receive
additional rent in future years based on stated rent increases or
if  gross  receipts  for  the property exceed  certain  specified
amounts, among other conditions.  The leases provide for  one  to
four  five-year  renewal options subject to the  same  terms  and
conditions as the initial lease.

ITEM 1.   DESCRIPTION OF BUSINESS. (Continued)

        On  February 14, 1996, the Partnership purchased  an  80%
interest   in  a  Tractor  Supply  Company  store  in  Maryville,
Tennessee for $837,058.  The property is leased to Tractor Supply
Company  under a Lease Agreement with a primary term of 14  years
and annual rental payments of $90,300.  The remaining interest in
the  property  was purchased by AEI Real Estate Fund  XV  Limited
Partnership, an affiliate of the Partnership.

        On  July  31, 1998, the Partnership sold 9.1266%  of  its
interest  in  the  Tractor Supply Company store to  an  unrelated
third  party.   The  Partnership received net  sale  proceeds  of
$133,251 which resulted in a net gain of $44,686.  At the time of
sale,  the  cost  and  related accumulated  depreciation  of  the
interest sold was $95,494 and $6,929, respectively.

       During 1998, the Partnership sold 37.3518% of its interest
in  the  Rio Bravo restaurant, in four separate transactions,  to
unrelated third parties.  The Partnership received total net sale
proceeds  of  $585,789 which resulted in  a  total  net  gain  of
$172,422.  The total cost and related accumulated depreciation of
the interests sold was $660,597 and $247,230, respectively.

        On December 30, 1998, the Partnership sold the Applebee's
restaurant  in  Harlingen, Texas to the lessee.  The  Partnership
received net sales proceeds of $1,858,837 which resulted in a net
gain  of  $580,055.  At the time of sale, the  cost  and  related
accumulated  depreciation  of  the property  was  $1,393,470  and
$114,688, respectively.

        On  December  17, 1998, the Partnership purchased  a  60%
interest  in  a  parcel  of  land in  Hudsonville,  Michigan  for
$198,600.   The  land  is leased to RTM Mid-America,  Inc.  (RTM)
under  a  Lease  Agreement with a primary term of  20  years  and
annual  rental  payments  of $16,881.   Simultaneously  with  the
purchase  of the land, the Partnership entered into a Development
Financing  Agreement  under which the  Partnership  will  advance
funds to RTM for the construction of an Arby's restaurant on  the
site.   Through December 31, 1998, the Partnership  had  advanced
$16,981  for  the construction of the property and  was  charging
interest  on  the  advance at a rate of 8.5%.  The  Partnership's
share  of  the total purchase price, including the  cost  of  the
land, will be approximately $714,600.  After the construction  is
complete,  the Lease Agreement will be amended to require  annual
rental  payments  of approximately $46,000.  The Partnership  has
incurred  net costs of $1,885 related to the acquisition  of  the
property.   The costs have been capitalized and will be allocated
to  land, building and equipment.  The remaining interest in  the
property is owned by Net Lease Income & Growth Fund 84-A  Limited
Partnership, an affiliate of the Partnership.

Major Tenants

        During  1998,  five  of  the Partnership's  lessees  each
contributed  more  than  ten percent of the  Partnership's  total
rental revenue.  The major tenants in aggregate contributed  100%
of  the  Partnership's  total rental  revenue  in  1998.   It  is
anticipated  that, based on the minimum rental payments  required
under  the  leases, each major tenant will continue to contribute
more  than ten percent of the Partnership's total rental  revenue
in  1999 and future years.  The exceptions are the tenants in the
Rio  Bravo  and  Applebee's restaurants will not continue  to  be
major  tenants  due to property sales in 1998.   Any  failure  of
these  major tenants or business concepts could materially affect
the Partnership's net income and cash distributions.

ITEM 1.   DESCRIPTION OF BUSINESS. (Continued)

Competition

        The  Partnership is a minor factor in the commercial real
estate  business.   There are numerous entities  engaged  in  the
commercial  real  estate  business which have  greater  financial
resources  than  the  Partnership.  At the time  the  Partnership
elects to dispose of its properties, the Partnership will  be  in
competition  with other persons and entities to find  buyers  for
its properties.

Employees

        The  Partnership  has  no direct  employees.   Management
services   are  performed  for  the  Partnership  by   AEI   Fund
Management, Inc., an affiliate of NLM.

Year 2000 Compliance

       The Year 2000 issue is the result of computer systems that
use  two  digits rather than four to define the applicable  year,
which  may prevent such systems from accurately processing  dates
ending  in  the  Year  2000 and beyond.   This  could  result  in
computer  system failures or disruption of operations, including,
but not limited to, an inability to process transactions, to send
or  receive  electronic data, or to engage  in  routine  business
activities.

        AEI  Fund  Management, Inc. (AEI) performs all management
services  for  the  Partnership.   In  1998,  AEI  completed   an
assessment of its computer hardware and software systems and  has
replaced or upgraded certain computer hardware and software using
the  assistance  of  outside vendors.  AEI has  received  written
assurance  from  the equipment and software manufacturers  as  to
Year  2000  compliance.   The  costs associated  with  Year  2000
compliance have not been, and are not expected to be, material.

        The  Partnership intends to monitor and communicate  with
tenants regarding Year 2000 compliance, although there can be  no
assurance  that the systems of the various tenants will  be  Year
2000 compliant.

ITEM 2.   DESCRIPTION OF PROPERTIES.

Investment Objectives

        The  Partnership's investment objectives were to  acquire
existing or newly-developed commercial properties throughout  the
United  States that offer the potential for (i) preservation  and
protection  of  the  Partnership's capital; (ii)  partially  tax-
deferred  cash distributions from operations which  may  increase
through  rent  participation clauses or mandated rent  increases;
and  (iii) long-term capital gains through appreciation in  value
of   the  Partnership's  properties  realized  upon  sale.    The
Partnership  does not have a policy, and there is no  limitation,
as  to the amount or percentage of assets that may be invested in
any  one  property.  However, to the extent possible, the General
Partners  attempt  to  diversify the type  and  location  of  the
Partnership's properties.

Description of Properties

        The  Partnership's properties are all commercial,  single
tenant  buildings.  All the properties were acquired on  a  debt-
free  basis  and are leased to various tenants under  triple  net
leases, which are classified as operating leases. The Partnership
holds an undivided fee simple interest in the properties.  At any
time  prior  to  selling  the  properties,  the  Partnership  may
mortgage  one or more of its properties in amounts not  exceeding
50% of the fair market value of the property.

ITEM 2.   DESCRIPTION OF PROPERTIES. (Continued)

        The  Partnership's properties are subject to the  general
competitive conditions incident to the ownership of single tenant
investment  real estate.  Since each property is leased  under  a
long-term   lease,   there  is  little  competition   until   the
Partnership  decides to sell the property.   At  this  time,  the
Partnership will be competing with other real estate  owners,  on
both a national and local level, in attempting to find buyers for
the   properties.   In  the  event  of  a  tenant  default,   the
Partnership would be competing with other real estate owners, who
have  property vacancies, to attract a new tenant  to  lease  the
property.   The Partnership's tenants operate in industries  that
are  very  competitive and can be affected  by  factors  such  as
changes  in regional or local economies, seasonality and  changes
in consumer preference.

        The  following table is a summary of the properties  that
the Partnership acquired and owned as of December 31, 1998.
<TABLE>
<CAPTION>
  
                                        Total Property
                           Purchase       Acquisition                Annual Lease   Annual Rent
Property                     Date            Costs      Lessee          Payment     Per Sq. Ft.
<S>                        <C>       <C>           <C>               <C>            <C> 
Rio Bravo Restaurant                                  Innovative
 St. Paul, MN                                         Restaurant
 (7.6482%)                  12/13/85   $   135,265    Concepts, Inc.   $  11,168     $ 12.81

Jack-In-The-Box Restaurant                                CKE
 Fort Worth, TX             12/19/85   $ 1,005,586   Restaurants, Inc. $ 135,582     $ 34.71

Hops Grill & Bar Restaurant                            Hops Grill
 Palm Harbor, FL             3/21/86   $ 1,094,373     & Bar, Inc.     $  85,105     $ 16.60

Tractor Supply
Company Store
 Maryville, TN                                        Tractor Supply
 (70.8734%)                  2/14/96   $   741,564     Company, Inc.   $  81,538     $  6.04

Arby's Restaurant
 Hudsonville, MI
 (60%)                                                    RTM
 (land only) (1)            12/17/98   $   198,600   Mid-America, Inc. $  16,881     $  8.51

(1)  Restaurant is under construction as of December 31, 1998.
</TABLE>

        The  properties  listed above with  a  partial  ownership
percentage  are  owned with affiliates of the Partnership  and/or
unrelated  third  parties.  The remaining interests  in  the  Rio
Bravo  restaurant  are  owned by unrelated  third  parties.   The
remaining interests in the Tractor Supply Company store are owned
by  AEI  Real Estate Fund XV Limited Partnership and an unrelated
third party.  The remaining interest in the Arby's restaurant  is
owned by Net Lease Income & Growth Fund 84-A Limited Partnership.

        The Partnership accounts for properties owned as tenants-
in-common  with  affiliated Partnerships and/or  unrelated  third
parties  using  the  proportionate  consolidation  method.   Each
tenant-in-common  owns  a  separate, undivided  interest  in  the
properties.   Any  tenant-in-common that holds more  than  a  50%
interest  does  not control decisions over the  other  tenant-in-
common  interests.   The financial statements reflect  only  this
Partnership's percentage share of the properties' land,  building
and equipment, liabilities, revenues and expenses.

ITEM 2.   DESCRIPTION OF PROPERTIES. (Continued)

        The initial Lease terms are for 20 years, except for  the
Hops  Grill  &  Bar restaurant which is 5 years and  the  Tractor
Supply  Company store which is 14 years.  The Leases have renewal
options  which may extend the Lease term an additional  5  to  20
years.  The Hops Grill & Bar Lease has been extended to April 30,
2002.

       Pursuant to the Lease Agreements, the tenants are required
to provide proof of adequate insurance coverage on the properties
they  occupy.   The General Partners believe the  properties  are
adequately covered by insurance and consider the properties to be
well-maintained and sufficient for the Partnership's operations.

         For  tax  purposes,  the  Partnership's  properties  are
depreciated  under  either the Accelerated Cost  Recovery  System
(ACRS)  or the Modified Accelerated Cost Recovery System (MACRS),
depending on the date when it was placed in service.  The largest
depreciable  component  of a property is the  building  which  is
depreciated, using the straight-line method, over either 19 years
(ACRS)  or 31.5 years or 40 years (MACRS) depending on  the  date
when  it  was  placed  in  service.   The  remaining  depreciable
components  of  a  property  are  personal  property   and   land
improvements which are depreciated, using an accelerated  method,
over 5 and 15 years, respectively.  Since the Partnership has tax-
exempt  Partners,  the Partnership is subject  to  the  rules  of
Section  168(h)(6) of the Internal Revenue Code which requires  a
percentage  of  the  properties'  depreciable  components  to  be
depreciated over longer lives using the straight-line method.  In
general  the  federal  tax  basis  of  the  properties  for   tax
depreciation  purposes  is  the  same  as  the  basis  for   book
depreciation purposes.

       During the last five years or since the date of purchase,
if purchased after December 31, 1993, all properties were 100
percent occupied by the lessees.

ITEM 3.   LEGAL PROCEEDINGS.

       None.

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

       None.


                             PART II
                                
ITEM 5.   MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS AND
       RELATED SECURITY HOLDER MATTERS.

        As of December 31, 1998, there were 695 holders of record
of the registrant's Limited Partnership Units.  There is no other
class  of  security outstanding or authorized.  The  registrant's
Units  are  not  a traded security in any market.   However,  the
Partnership  may  purchase Units from Limited Partners  who  have
tendered  their  Units to the Partnership.   Such  Units  may  be
acquired  at  a  discount.  The Partnership is not  obligated  to
purchase  in any year more than 5% of the total number  of  Units
originally sold.  In no event shall the Partnership be  obligated
to  purchase  Units if, in the sole discretion  of  the  Managing
General  Partner,  such  purchase would  impair  the  capital  or
operation of the Partnership.

       During 1998, the Partnership did not redeem any Units from
the  Limited  Partners.  In prior years, a total  of  fifty-three
Limited  Partners redeemed 420.37 Partnership Units for $315,321.
The   redemptions   increase  the  remaining  Limited   Partners'
ownership interest in the Partnership.

ITEM 5.   MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS AND
       RELATED SECURITY HOLDER MATTERS. (Continued)

        Cash distributions of $4,212 and $4,025 were made to  the
General  Partners  and $417,001 and $396,299  were  made  to  the
Limited   Partners   in   1998  and  1997,   respectively.    The
distributions  were made on a quarterly basis and  represent  Net
Cash  Flow,  as  defined.   These  distributions  should  not  be
compared with dividends paid on capital stock by corporations.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.

Results of Operations

        For  the  years  ended December 31, 1998  and  1997,  the
Partnership  recognized rental income of $532,564  and  $532,076,
respectively.   During the same periods, the  Partnership  earned
investment  income  of  $16,842 and  $7,253,  respectively.   The
increase  in investment income earned was due to interest  earned
on the cash generated from the sale of property.

        During  the years ended December 31, 1998 and  1997,  the
Partnership   paid   Partnership   administration   expenses   to
affiliated  parties of $92,895 and $89,979, respectively.   These
administration  expenses  include  costs  associated   with   the
management of the properties, processing distributions, reporting
requirements  and correspondence to the Limited Partners.  During
the   same   periods,   the  Partnership   incurred   Partnership
administration  and property management expenses  from  unrelated
parties  of  $10,768 and $13,355, respectively.   These  expenses
represent  direct payments to third parties for legal and  filing
fees,  direct administrative costs, outside audit and  accounting
costs, taxes, insurance and other property costs.

       As of December 31, 1998, the Partnership's annualized cash
distribution  rate  was  6.50%, based  on  the  Adjusted  Capital
Contribution.   Distributions of Net Cash  Flow  to  the  General
Partners were subordinated to the Limited Partners as required in
the Partnership Agreement.  As a result, 99% of distributions and
income  were allocated to Limited Partners and 1% to the  General
Partners.

        Inflation  has  had  a  minimal  effect  on  income  from
operations.   It is expected that increases in sales  volumes  of
the  tenants, due to inflation and real sales growth, will result
in  an  increase  in rental income over the term of  the  leases.
Inflation  also  may  cause  the  Partnership's  real  estate  to
appreciate in value.  However, inflation and changing prices  may
also  have  an  adverse impact on the operating  margins  of  the
properties' tenants which could impair their ability to pay  rent
and subsequently reduce the Partnership's Net Cash Flow available
for distributions.

       The Year 2000 issue is the result of computer systems that
use  two  digits rather than four to define the applicable  year,
which  may prevent such systems from accurately processing  dates
ending  in  the  Year  2000 and beyond.   This  could  result  in
computer  system failures or disruption of operations, including,
but not limited to, an inability to process transactions, to send
or  receive  electronic data, or to engage  in  routine  business
activities.

        AEI  Fund  Management, Inc. (AEI) performs all management
services  for  the  Partnership.   In  1998,  AEI  completed   an
assessment of its computer hardware and software systems and  has
replaced or upgraded certain computer hardware and software using
the  assistance  of  outside vendors.  AEI has  received  written
assurance  from  the equipment and software manufacturers  as  to
Year  2000  compliance.   The  costs associated  with  Year  2000
compliance have not been, and are not expected to be, material.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        The  Partnership intends to monitor and communicate  with
tenants regarding Year 2000 compliance, although there can be  no
assurance  that the systems of the various tenants will  be  Year
2000 compliant.

Liquidity and Capital Resources

        During  1998,  the Partnership's cash balances  increased
$2,397,566 mainly as a result of cash generated from the sale  of
property.   Net  cash provided by operating activities  increased
from  $431,734  in 1997 to $456,896 in 1998 as  a  result  of  an
increase  in  income  in 1998 and net timing differences  in  the
collection  of  payments  from the lessees  and  the  payment  of
expenses.

        The  major components of the Partnership's cash flow from
investing activities are investments in real estate and  proceeds
from the sale of real estate.  In 1998, the Partnership generated
cash flow from the sale of real estate of $2,577,877.  During the
same  period, the Partnership expended $217,466 to invest in real
properties (inclusive of acquisition expenses) as the Partnership
reinvested the cash generated from the property sales.

        On  July  31, 1998, the Partnership sold 9.1266%  of  its
interest  in  the  Tractor Supply Company store to  an  unrelated
third  party.   The  Partnership received net  sale  proceeds  of
$133,251 which resulted in a net gain of $44,686.  At the time of
sale,  the  cost  and  related accumulated  depreciation  of  the
interest sold was $95,494 and $6,929, respectively.

       During 1998, the Partnership sold 37.3518% of its interest
in  the  Rio Bravo restaurant, in four separate transactions,  to
unrelated third parties.  The Partnership received total net sale
proceeds  of  $585,789 which resulted in  a  total  net  gain  of
$172,422.  The total cost and related accumulated depreciation of
the interests sold was $660,597 and $247,230, respectively.

        On December 30, 1998, the Partnership sold the Applebee's
restaurant  in  Harlingen, Texas to the lessee.  The  Partnership
received net sales proceeds of $1,858,837 which resulted in a net
gain  of  $580,055.  At the time of sale, the  cost  and  related
accumulated  depreciation  of  the property  was  $1,393,470  and
$114,688, respectively.

        On  December  17, 1998, the Partnership purchased  a  60%
interest  in  a  parcel  of  land in  Hudsonville,  Michigan  for
$198,600.   The  land  is leased to RTM Mid-America,  Inc.  (RTM)
under  a  Lease  Agreement with a primary term of  20  years  and
annual  rental  payments  of $16,881.   Simultaneously  with  the
purchase  of the land, the Partnership entered into a Development
Financing  Agreement  under which the  Partnership  will  advance
funds to RTM for the construction of an Arby's restaurant on  the
site.   Through December 31, 1998, the Partnership  had  advanced
$16,981  for  the construction of the property and  was  charging
interest  on  the  advance at a rate of 8.5%.  The  Partnership's
share  of  the total purchase price, including the  cost  of  the
land, will be approximately $714,600.  After the construction  is
complete,  the Lease Agreement will be amended to require  annual
rental  payments  of approximately $46,000.  The Partnership  has
incurred  net costs of $1,885 related to the acquisition  of  the
property.   The costs have been capitalized and will be allocated
to  land, building and equipment.  The remaining interest in  the
property is owned by Net Lease Income & Growth Fund 84-A  Limited
Partnership, an affiliate of the Partnership.

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

       The Partnership's primary use of cash flow is distribution
and  redemption  payments to Partners.  The Partnership  declares
its  regular  quarterly  distributions before  the  end  of  each
quarter and pays the distribution in the first week after the end
of  each quarter.  The Partnership attempts to maintain a  stable
distribution  rate from quarter to quarter.  Redemption  payments
are  paid  to  redeeming Partners in the fourth quarter  of  each
year.   Effective  July  1, 1997, the Partnership's  distribution
rate   was   increased  from  5.85%  to  6.50%.   As  a   result,
distributions during 1998 were higher when compared to 1997.

        The  Partnership may acquire Units from Limited  Partners
who have tendered their Units to the Partnership.  Such Units may
be  acquired at a discount.  The Partnership is not obligated  to
purchase  in any year more than 5% of the total number  of  Units
originally sold.  In no event shall the Partnership be  obligated
to  purchase  Units if, in the sole discretion  of  the  Managing
General  Partner,  such  purchase would  impair  the  capital  or
operation of the Partnership.

       During 1998, the Partnership did not redeem any Units from
the  Limited  Partners.  In prior years, a total  of  fifty-three
Limited  Partners redeemed 420.37 Partnership Units for $315,321.
The   redemptions   increase  the  remaining  Limited   Partners'
ownership interest in the Partnership.

       The continuing rent payments from the properties, together
with  cash generated from the property sales, should be  adequate
to  fund  continuing  distributions and  meet  other  Partnership
obligations on both a short-term and long-term basis.

Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995

         The   foregoing  Management's  Discussion  and  Analysis
contains various "forward looking  statements" within the meaning
of   federal   securities   laws  which  represent   management's
expectations  or  beliefs  concerning  future  events,  including
statements  regarding anticipated application of  cash,  expected
returns  from rental income, growth in revenue, taxation  levels,
the  sufficiency  of  cash to meet operating expenses,  rates  of
distribution,  and  other  matters.   These,  and  other  forward
looking statements made by the Partnership, must be evaluated  in
the   context  of  a  number  of  factors  that  may  affect  the
Partnership's  financial  condition and  results  of  operations,
including the following:

    <BULLET>  Market  and economic conditions which  affect
              the  value of the properties the Partnership  owns  and
              the cash from rental income such properties generate;
       
    <BULLET>  the federal income tax consequences of rental
              income,  deductions, gain on sales and other items  and
              the affects of these consequences for investors;
       
    <BULLET>  resolution  by  the  General   Partners   of
              conflicts with which they may be confronted;
       
    <BULLET>  the  success  of  the  General  Partners   of
              locating   properties   with  favorable   risk   return
              characteristics;
       
    <BULLET>  the effect of tenant defaults; and
       
    <BULLET>  the condition of the industries in which  the
              tenants of properties owned by the Partnership operate.

ITEM 7.   FINANCIAL STATEMENTS.

       See accompanying index to financial statements.
                                
          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP

                  INDEX TO FINANCIAL STATEMENTS




                                                       

Report of Independent Auditors                          

Balance Sheet as of December 31, 1998 and 1997          

Statements for the Years Ended December 31, 1998 and 1997:

     Income                                             

     Cash Flows                                         

     Changes in Partners' Capital                       

Notes to Financial Statements                      

                                
                                
                                
                 REPORT OF INDEPENDENT AUDITORS





To the Partners:
AEI Real Estate Fund 85-A Limited Partnership
St. Paul, Minnesota





      We  have audited the accompanying balance sheet of AEI REAL
ESTATE   FUND  85-A  LIMITED  PARTNERSHIP  (a  Minnesota  limited
partnership)  as  of December 31, 1998 and 1997 and  the  related
statements of income, cash flows and changes in partners' capital
for  the  years then ended.  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, the financial statements referred to above
present  fairly, in all material respects, the financial position
of  AEI  Real Estate Fund 85-A Limited Partnership as of December
31, 1998 and 1997, and the results of its operations and its cash
flows  for  the  years then ended, in conformity  with  generally
accepted accounting principles.




                            /s/ Boulay, Heutmaker, Zibell & Co. P.L.L.P.
Minneapolis,  Minnesota         Boulay, Heutmaker, Zibell & Co. P.L.L.P.
January 27, 1999                Certified Public Accountants


<PAGE>                                
          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP
                                
                          BALANCE SHEET
                                
                           DECEMBER 31
                                
                             ASSETS
                                
                                
                                                      1998           1997

CURRENT ASSETS:
  Cash and Cash Equivalents                       $ 2,572,249   $   174,683
  Receivables                                          12,721             0
                                                   -----------   -----------
          Total Current Assets                      2,584,970       174,683
                                                   -----------   -----------
INVESTMENTS IN REAL ESTATE:
  Land                                              1,367,380     1,877,226
  Buildings and Equipment                           1,808,008     3,249,122
  Construction in Progress                             16,981             0
  Property Acquisition Costs                            1,885             0
  Accumulated Depreciation                           (731,538)     (999,929)
                                                   -----------   -----------
      Net Investments in Real Estate                2,462,716     4,126,419
                                                   -----------   -----------
        Total Assets                              $ 5,047,686   $ 4,301,102
                                                   ===========   ===========


                      LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.            $    36,593   $    12,719
  Distributions Payable                                94,365        92,893
                                                   -----------   -----------
      Total Current Liabilities                       130,958       105,612
                                                   -----------   -----------
PARTNERS' CAPITAL (DEFICIT):
  General Partners                                    (28,931)      (36,144)
  Limited Partners, $1,000 Unit value;
   7,500 Units authorized and issued;
   7,080 outstanding in 1998 and 1997               4,945,659     4,231,634
                                                   -----------   -----------
      Total Partners' Capital                       4,916,728     4,195,490
                                                   -----------   -----------
        Total Liabilities and Partners' Capital   $ 5,047,686   $ 4,301,102
                                                   ===========   ===========


 The accompanying notes to financial statements are an integral
                     part of this statement.
</PAGE>
<PAGE>

          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP
                                
                       STATEMENT OF INCOME
                                
                 FOR THE YEARS ENDED DECEMBER 31


                                                    1998            1997

INCOME:
  Rent                                         $   532,564      $   532,076
  Investment Income                                 16,842            7,253
                                                -----------      -----------
      Total Income                                 549,406          539,329
                                                -----------      -----------
  
EXPENSES:
  Partnership Administration - Affiliates           92,895           89,979
  Partnership Administration and Property
    Management - Unrelated Parties                  10,768           13,355
  Depreciation                                     100,455          103,758
                                                -----------      -----------
      Total Expenses                               204,118          207,092
                                                -----------      -----------

OPERATING INCOME                                   345,288          332,237

GAIN ON SALE OF REAL ESTATE                        797,163                0
                                                -----------      -----------
NET INCOME                                     $ 1,142,451      $   332,237
                                                ===========      ===========

NET INCOME ALLOCATED:
  General Partners                             $    11,425      $     3,322
  Limited Partners                               1,131,026          328,915
                                                -----------      -----------
                                               $ 1,142,451      $   332,237
                                                ===========      ===========

NET INCOME PER LIMITED PARTNERSHIP UNIT
(7,080 and 7,083 weighted average Units outstanding
in 1998 and 1997, respectively)                $    159.75      $     46.44
                                                ===========      ===========


 The accompanying notes to financial statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
                                
          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP
                                
                     STATEMENT OF CASH FLOWS
                                
                 FOR THE YEARS ENDED DECEMBER 31


                                                      1998           1997

CASH FLOWS FROM OPERATING ACTIVITIES:
 Net Income                                        $ 1,142,451    $   332,237

 Adjustments To Reconcile Net Income
 To Net Cash Provided By Operating Activities:
     Depreciation                                      100,455        103,758
     Gain on Sale of Real Estate                      (797,163)             0
     Increase in Receivables                           (12,721)             0
     Increase (Decrease) in Payable to
        AEI Fund Management, Inc.                       23,874         (4,261)
                                                    -----------    -----------
       Total Adjustments                              (685,555)        99,497
                                                    -----------    -----------
       Net Cash Provided By
           Operating Activities                        456,896        431,734
                                                    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Investments in Real Estate                          (217,466)             0
  Proceeds from Sale of Real Estate                  2,577,877              0
                                                    -----------    -----------
       Net Cash Provided By
           Investing Activities                      2,360,411              0
                                                    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Increase in Distributions Payable                      1,472          8,331
  Distributions to Partners                           (421,213)      (400,302)
  Redemption Payments                                        0         (2,221)
                                                    -----------    -----------
       Net Cash Used For
           Financing Activities                       (419,741)      (394,192)
                                                    -----------    ----------
NET INCREASE IN CASH
    AND CASH EQUIVALENTS                             2,397,566         37,542

CASH AND CASH EQUIVALENTS, beginning of period         174,683        137,141
                                                    -----------    -----------
CASH AND CASH EQUIVALENTS, end of period           $ 2,572,249    $   174,683
                                                    ===========    ===========


 The accompanying notes to financial statements are an integral
                     part of this statement.
</PAGE>
<PAGE>

          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP
                                
            STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                                
                 FOR THE YEARS ENDED DECEMBER 31


                                                                     Limited
                                                                   Partnership
                               General      Limited                   Units
                               Partners     Partners     Total     Outstanding


BALANCE, December 31, 1996  $ (35,441)   $ 4,301,217   $ 4,265,776    7,084.63

  Distributions                (4,003)      (396,299)     (400,302)

  Redemption Payments             (22)        (2,199)       (2,221)      (5.00)

  Net Income                    3,322        328,915       332,237
                             ---------    -----------   -----------  ----------
BALANCE, December 31, 1997    (36,144)     4,231,634     4,195,490    7,079.63

  Distributions                (4,212)      (417,001)     (421,213)  

  Net Income                   11,425      1,131,026     1,142,451
                             ---------    -----------   -----------  ----------
BALANCE, December 31, 1998  $ (28,931)   $ 4,945,659   $ 4,916,728    7,079.63
                             =========    ===========   ===========  ==========



 The accompanying notes to financial statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1998 AND 1997


(1)  Organization -

     AEI  Real Estate Fund 85-A Limited Partnership (Partnership)
     was  formed  to  acquire and lease commercial properties  to
     operating tenants.  The Partnership's operations are managed
     by  Net  Lease  Management 85-A, Inc.  (NLM),  the  Managing
     General Partner of the Partnership.  Robert P. Johnson,  the
     President  and  sole  shareholder  of  NLM,  serves  as  the
     Individual General Partner of the Partnership. An  affiliate
     of  NLM,  AEI  Fund  Management,  Inc.  (AEI)  performs  the
     administrative and operating functions for the Partnership.
     
     The   terms   of  the  Partnership  offering  call   for   a
     subscription  price of $1,000 per Limited Partnership  Unit,
     payable   on  acceptance  of  the  offer.   The  Partnership
     commenced   operations  on  April  15,  1985  when   minimum
     subscriptions    of   1,300   Limited   Partnership    Units
     ($1,300,000)  were  accepted.   The  Partnership's  offering
     terminated  on  June 20, 1985 when the maximum  subscription
     limit  of  7,500 Limited Partnership Units ($7,500,000)  was
     reached.
     
     Under  the  terms of the Limited Partnership Agreement,  the
     Limited  Partners and General Partners contributed funds  of
     $7,500,000  and $1,000, respectively.  During the  operation
     of the Partnership, any Net Cash Flow, as defined, which the
     General Partners determine to distribute will be distributed
     90% to the Limited Partners and 10% to the General Partners;
     provided,  however, that such distributions to  the  General
     Partners will be subordinated to the Limited Partners  first
     receiving an annual, noncumulative distribution of Net  Cash
     Flow equal to 10% of their Adjusted Capital Contribution, as
     defined,  and, provided further, that in no event  will  the
     General Partners receive less than 1% of such Net Cash  Flow
     per  annum.  Distributions to Limited Partners will be  made
     pro rata by Units.
     
     Any  Net  Proceeds  of Sale, as defined, from  the  sale  or
     financing of the Partnership's properties which the  General
     Partners determine to distribute will, after provisions  for
     debts  and  reserves, be paid in the following  manner:  (i)
     first,  99%  to the Limited Partners and 1% to  the  General
     Partners until the Limited Partners receive an amount  equal
     to:  (a)  their Adjusted Capital Contribution  plus  (b)  an
     amount  equal  to 6% of their Adjusted Capital  Contribution
     per  annum, cumulative but not compounded, to the extent not
     previously distributed from Net Cash Flow; (ii) next, 99% to
     the  Limited  Partners and 1% to the General Partners  until
     the Limited Partners receive an amount equal to 14% of their
     Adjusted Capital Contribution per annum, cumulative but  not
     compounded, to the extent not previously distributed;  (iii)
     next, to the General Partners until cumulative distributions
     to the General Partners under Items (ii) and (iii) equal 15%
     of cumulative distributions to all Partners under Items (ii)
     and (iii).  Any remaining balance will be distributed 85% to
     the  Limited  Partners  and  15% to  the  General  Partners.
     Distributions to the Limited Partners will be made pro  rata
     by Units.

          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1998 AND 1997


(1)  Organization - (Continued)
     
     For  tax  purposes,  profits  from  operations,  other  than
     profits  attributable  to  the  sale,  exchange,  financing,
     refinancing   or  other  disposition  of  the  Partnership's
     property,  will  be  allocated first in the  same  ratio  in
     which,  and  to the extent, Net Cash Flow is distributed  to
     the Partners for such year.  Any additional profits will  be
     allocated 90% to the Limited Partners and 10% to the General
     Partners.   In the event no Net Cash Flow is distributed  to
     the  Limited  Partners,  90% of  each  item  of  Partnership
     income,  gain  or credit for each respective year  shall  be
     allocated to the Limited Partners, and 10% of each such item
     shall be allocated to the General Partners.  Net losses from
     operations will be allocated 98% to the Limited Partners and
     2% to the General Partners.
     
     For  tax purposes, profits arising from the sale, financing,
     or  other disposition of the Partnership's property will  be
     allocated  in  accordance with the Partnership Agreement  as
     follows:  (i) first, to those Partners with deficit balances
     in  their capital accounts in an amount equal to the sum  of
     such  deficit  balances; (ii) second,  99%  to  the  Limited
     Partners  and 1% to the General Partners until the aggregate
     balance in the Limited Partners' capital accounts equals the
     sum  of the Limited Partners' Adjusted Capital Contributions
     plus  an  amount  equal  to 14% of  their  Adjusted  Capital
     Contributions  per annum, cumulative but not compounded,  to
     the  extent  not previously allocated; (iii) third,  to  the
     General Partners until cumulative allocations to the General
     Partners equal 15% of cumulative allocations.  Any remaining
     balance  will  be allocated 85% to the Limited Partners  and
     15%  to the General Partners.  Losses will be allocated  98%
     to the Limited Partners and 2% to the General Partners.
     
     The  General Partners are not required to currently  fund  a
     deficit   capital   balance.   Upon   liquidation   of   the
     Partnership or withdrawal by a General Partner, the  General
     Partners will contribute to the Partnership an amount  equal
     to  the  lesser  of  the deficit balances in  their  capital
     accounts  or  1%  of  total Limited  Partners'  and  General
     Partners' capital contributions.
     
(2)  Summary of Significant Accounting Policies -

     Financial Statement Presentation

       The  accounts  of  the Partnership are maintained  on  the
       accrual  basis of accounting for both federal  income  tax
       purposes and financial reporting purposes.
       
     Accounting Estimates
     
       Management  uses  estimates and assumptions  in  preparing
       these  financial statements in accordance  with  generally
       accepted  accounting  principles.   Those  estimates   and
       assumptions may affect the reported amounts of assets  and
       liabilities,  the  disclosure  of  contingent  assets  and
       liabilities,  and  the  reported  revenues  and  expenses.
       Actual results could differ from those estimates.
       

          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1998 AND 1997

(2)  Summary of Significant Accounting Policies - (Continued)

       The  Partnership regularly assesses whether market  events
       and conditions indicate that it is reasonably possible  to
       recover  the carrying amounts of its investments  in  real
       estate  from  future operations and sales.   A  change  in
       those  market events and conditions could have a  material
       effect on the carrying amount of its real estate
       
     Cash Concentrations of Credit Risk
     
       At  times  throughout  the year,  the  Partnership's  cash
       deposited  in  financial  institutions  may  exceed   FDIC
       insurance limits.
       
     Statement of Cash Flows
     
       For  purposes  of  reporting cash  flows,  cash  and  cash
       equivalents  may include cash in checking,  cash  invested
       in   money   market  accounts,  certificates  of  deposit,
       federal  agency notes and commercial paper with a term  of
       three months or less.
     
     Income Taxes
     
       The  income or loss of the Partnership for federal  income
       tax  reporting  purposes is includable in the  income  tax
       returns of the partners.  Accordingly, no recognition  has
       been  given to income taxes in the accompanying  financial
       statements.
       
       The  tax  return, the qualification of the Partnership  as
       such  for  tax  purposes, and the amount of  distributable
       Partnership  income or loss are subject to examination  by
       federal   and  state  taxing  authorities.   If  such   an
       examination  results  in  changes  with  respect  to   the
       Partnership  qualification or in changes to  distributable
       Partnership  income  or loss, the taxable  income  of  the
       partners would be adjusted accordingly.

     Real Estate

       The  Partnership's real estate is leased under triple  net
       leases  classified as operating leases.   The  Partnership
       recognizes  rental revenue on the accrual basis  according
       to  the terms of the individual leases.  For leases  which
       contain  cost  of  living  increases,  the  increases  are
       recognized in the year in which they are effective.
       

          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1998 AND 1997

(2)  Summary of Significant Accounting Policies - (Continued)

       Real  estate is recorded at the lower of cost or estimated
       net   realizable  value.   The  Partnership  compares  the
       carrying amount of its properties to the estimated  future
       cash  flows expected to result from the property  and  its
       eventual  disposition.  If the sum of the expected  future
       cash  flows  is  less  than the  carrying  amount  of  the
       property,  the  Partnership recognizes an impairment  loss
       by  the  amount  by  which  the  carrying  amount  of  the
       property exceeds the fair value of the property.
       
       The  Partnership  has capitalized as Investments  in  Real
       Estate   certain   costs  incurred  in  the   review   and
       acquisition  of the properties.  The costs were  allocated
       to the land, buildings and equipment.
       
       The   buildings  and  equipment  of  the  Partnership  are
       depreciated  using the straight-line method for  financial
       reporting purposes based on estimated useful lives  of  30
       years and 10 years respectively.
       
       The  Partnership accounts for properties owned as tenants-
       in-common  with  affiliated Partnerships and/or  unrelated
       third   parties   using  the  proportionate  consolidation
       method.   Each tenant-in-common owns a separate, undivided
       interest  in  the  properties.  Any tenant-in-common  that
       holds  more than a 50% interest does not control decisions
       over  the other tenant-in-common interests.  The financial
       statements  reflect  only  this  Partnership's  percentage
       share  of  the  properties' land, building and  equipment,
       liabilities, revenues and expenses.

(3)  Related Party Transactions -

     As  of  December  31, 1998, the Partnership owns  a  7.6482%
     interest   in  the  Rio  Bravo  restaurant.   The  remaining
     interests  in  this  property are owned by  unrelated  third
     parties.   Net  Lease  Income &  Growth  Fund  84-A  Limited
     Partnership, an affiliate of the Partnership,  owned  a  55%
     interest in this property until the interest was sold  in  a
     series of transactions in 1997 and 1998.  As of December 31,
     1998,  the  Partnership  owns a  70.8734%  interest  in  the
     Tractor  Supply Company store.  The remaining  interests  in
     this  property are owned by AEI Real Estate Fund XV  Limited
     Partnership,  an  affiliate  of  the  Partnership   and   an
     unrelated third party.  The Partnership owns a 60%  interest
     in  the  Arby's restaurant.  The remaining interest in  this
     property  is  owned by Net Lease Income & Growth  Fund  84-A
     Limited Partnership.


          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1998 AND 1997

(3)  Related Party Transactions - (Continued)

     AEI   and  NLM  received  the  following  compensation   and
     reimbursements for costs and expenses from the Partnership:


                                        Total Incurred by the Partnership
                                         for the Years Ended December 31

                                                     1998        1997

a.AEI and NLM are reimbursed for all costs
  incurred in connection with managing the
  Partnership's operations, maintaining the
  Partnership's books and communicating
  the results of operations to the Limited
  Partners.                                      $  92,895    $  89,979
                                                  ========     ========

b.AEI and NLM are reimbursed for all direct
  expenses they have paid on the Partnership's
  behalf to third parties.  These expenses 
  included printing costs, interest, legal 
  and filing fees, direct administrative costs, 
  outside audit and accounting costs, taxes, 
  insurance and other property costs.            $  10,768    $  13,355
                                                  ========     ========

c.AEI is reimbursed for all property acquisition
  costs incurred by it in acquiring properties on
  behalf of the Partnership.  The amounts are net
  of financing and commitment fees and expense
  reimbursements received by the Partnership 
  from the lessees in the amount of $13,292 
  for 1998.                                      $   1,885    $       0
                                                  ========     ========


     The  payable  to  AEI Fund Management, Inc.  represents  the
     balance due for the services described in 3a, b and c.  This
     balance is non-interest bearing and unsecured and is  to  be
     paid in the normal course of business.


          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1998 AND 1997

(4)  Investments in Real Estate -

     The  Partnership  leases its properties to  various  tenants
     through  triple  net leases, which have been  classified  as
     operating  leases.  Under a triple net lease, the lessee  is
     responsible   for   all   real  estate   taxes,   insurance,
     maintenance, repairs and operating expenses of the property.
     The  initial  Lease terms are for 20 years, except  for  the
     Hops Grill & Bar restaurant which is 5 years and the Tractor
     Supply  Company  store which is 14 years.  The  Leases  have
     renewal   options  which  may  extend  the  Lease  term   an
     additional  5 to 20 years.  The Hops Grill & Bar  Lease  has
     been extended to April 30, 2002.  The Leases contain clauses
     which entitle the Partnership to receive additional rent  in
     future  years, based on stated rent increases  or  if  gross
     receipts  for the property exceed certain specified amounts,
     among other conditions.
     
     The  Partnership's  properties are all  commercial,  single-
     tenant buildings.  The Rio Bravo was constructed in 1984 and
     acquired  in 1985.  The Jack-In-The-Box was constructed  and
     acquired  in  1985.   The Hops Grill &  Bar  restaurant  was
     constructed  and  acquired  in  1986.   The  Tractor  Supply
     Company  store was constructed and acquired  in  1996.   The
     land  for  the Arby's restaurant was acquired  in  1998  and
     construction  of the restaurant will be completed  in  1999.
     There   have  been  no  costs  capitalized  as  improvements
     subsequent to the acquisitions.

     The  cost  of  the  properties and the  related  accumulated
     depreciation at December 31, 1998 are as follows:

                                        Buildings and              Accumulated
Property                         Land     Equipment      Total     Depreciation

Rio Bravo, St. Paul, MN   $    49,251  $    86,014   $   135,265   $   51,059
Jack-In-The-Box,
 Fort Worth, TX               498,862      506,724     1,005,586      280,580
Hops Grill & Bar,
 Palm Harbor, FL              484,570      609,803     1,094,373      336,969
Tractor Supply Company,
 Maryville, TN                136,097      605,467       741,564       62,930
Arby's Restaurant,
 Hudsonville, MI              198,600            0       198,600            0
                           -----------  -----------   -----------   -----------
                          $ 1,367,380  $ 1,808,008   $ 3,175,388   $  731,538
                           ===========  ===========   ===========   ===========


          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1998 AND 1997

(4)  Investments in Real Estate - (Continued)

     On  July  31,  1998,  the Partnership sold  9.1266%  of  its
     interest in the Tractor Supply Company store to an unrelated
     third party.  The Partnership received net sale proceeds  of
     $133,251  which resulted in a net gain of $44,686.   At  the
     time   of   the  sale,  the  cost  and  related  accumulated
     depreciation  of the interest sold was $95,494  and  $6,929,
     respectively.
     
     During  1998, the Partnership sold 37.3518% of its  interest
     in  the Rio Bravo restaurant, in four separate transactions,
     to  unrelated third parties.  The Partnership received total
     net  sale proceeds of $585,789 which resulted in a total net
     gain  of  $172,422.  The total cost and related  accumulated
     depreciation   of  the  interests  sold  was  $660,597   and
     $247,230, respectively.
     
     On  December  30, 1998, the Partnership sold the  Applebee's
     restaurant   in  Harlingen,  Texas  to  the   lessee.    The
     Partnership received net sales proceeds of $1,858,837  which
     resulted  in a net gain of $580,055.  At the time  of  sale,
     the   cost  and  related  accumulated  depreciation  of  the
     property was $1,393,470 and $114,688, respectively.
     
     On  December  17,  1998,  the Partnership  purchased  a  60%
     interest  in  a parcel of land in Hudsonville, Michigan  for
     $198,600.  The land is leased to RTM Mid-America, Inc. (RTM)
     under a Lease Agreement with a primary term of 20 years  and
     annual rental payments of $16,881.  Simultaneously with  the
     purchase  of  the  land,  the  Partnership  entered  into  a
     Development  Financing Agreement under which the Partnership
     will  advance funds to RTM for the construction of an Arby's
     restaurant  on  the site.  Through December  31,  1998,  the
     Partnership had advanced $16,981 for the construction of the
     property and was charging interest on the advance at a  rate
     of  8.5%.   The  Partnership's share of the  total  purchase
     price, including the cost of the land, will be approximately
     $714,600.   After  the construction is complete,  the  Lease
     Agreement will be amended to require annual rental  payments
     of  approximately $46,000.  The Partnership has incurred net
     costs  of $1,885 related to the acquisition of the property.
     The  costs  have been capitalized and will be  allocated  to
     land, building and equipment.
     
     The   minimum  future  rentals  on  the  Leases  for   years
     subsequent to December 31, 1998 are as follows:

                       1999          $   331,976
                       2000              336,151
                       2001              340,433
                       2002              282,087
                       2003              252,749
                       Thereafter      1,284,631
                                      -----------
                                     $ 2,828,027
                                      ===========

     In  1998  and  1997,  the Partnership recognized  contingent
     rents of $14,896 and $2,259, respectively.


          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP
                                
                  NOTES TO FINANCIAL STATEMENTS
                                
                   DECEMBER 31, 1998 AND 1997

(5)  Major Tenants -

     The following schedule presents rent revenue from individual
     tenants,   or  affiliated  groups  of  tenants,   who   each
     contributed more than ten percent of the Partnership's total
     rent revenue for the years ended December 31:
     
                                                        1998         1997
      Tenants                         Industry

     Renaissant Development Corp.  Restaurant       $  155,979    $  156,400
     CKE Restaurants, Inc.         Restaurant          150,478       137,841
     Tractor Supply Company, Inc.  Retail               87,345        90,300
     Hops Grill & Bar, Inc.        Restaurant           84,279        81,824
     Innovative Restaurant
        Concepts, Inc.             Restaurant           53,802        65,711
                                                     ----------    ----------

     Aggregate rent revenue of major tenants        $  531,883    $  532,076
                                                     ==========    ==========

     Aggregate rent revenue of major tenants as
     a percentage of total rent revenue                   100%          100%
                                                     ==========    ==========

(6) Partners' Capital-

     Cash  distributions of $4,212 and $4,025 were  made  to  the
     General Partners and $417,001 and $396,299 were made to  the
     Limited  Partners for the years ended December 31, 1998  and
     1997,  respectively.   The  Limited Partners'  distributions
     represent  $58.90  and $55.95 per Limited  Partnership  Unit
     outstanding using 7,080 and 7,083 weighted average Units  in
     1998  and  1997, respectively.  The distributions  represent
     $58.90 and $46.13 per Unit of Net Income and $-0- and  $9.82
     per  Unit of return of contributed capital in 1998 and 1997,
     respectively.
     
     Distributions  of  Net  Cash Flow to  the  General  Partners
     during  1998  and  1997  were subordinated  to  the  Limited
     Partners  as  required in the Partnership Agreement.   As  a
     result,  99%  of distributions and income were allocated  to
     the Limited Partners and 1% to the General Partners.
     
          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP

                  NOTES TO FINANCIAL STATEMENTS

                   DECEMBER 31, 1998 AND 1997

(6) Partners' Capital- (Continued)

     The  Partnership may acquire Units from Limited Partners who
     have  tendered their Units to the Partnership.   Such  Units
     may  be  acquired  at  a discount.  The Partnership  is  not
     obligated to purchase in any year more than 5% of the  total
     number  of  Units  originally sold.  In no event  shall  the
     Partnership be obligated to purchase Units if, in  the  sole
     discretion  of  the Managing General Partner, such  purchase
     would impair the capital or operation of the Partnership.
     
     During  1998, the Partnership did not redeem any Units  from
     the Limited Partners.  In 1997, one Limited Partner redeemed
     a  total of 5 Partnership Units for $2,199.  The Partnership
     acquired  these  Units using Net Cash Flow from  operations.
     The  redemptions  increase the remaining  Limited  Partners'
     ownership interest in the Partnership.
     
     After  the  effect of redemptions and the return of  capital
     from   the   sale   of   property,  the   Adjusted   Capital
     Contribution,  as defined in the Partnership  Agreement,  is
     $905.95 per original $1,000 invested.
     
(7)  Income Taxes -

     The   following  is  a  reconciliation  of  net  income  for
     financial reporting purposes to income reported for  federal
     income tax purposes for the years ended December 31:
     
                                                    1998          1997
     
     Net Income For Financial
      Reporting Purposes                         $1,142,451     $  332,237
     
     Depreciation for Tax Purposes
      Over Depreciation For Financial
      Reporting Purposes                            (10,467)       (25,844)
     
     Gain on Sale of Real Estate For
      Tax Purposes Over Gain For
      Financial Reporting Purposes                   52,969              0
                                                  ----------     ----------
           Taxable Income to Partners            $1,184,953     $  306,393
                                                  ==========     ==========
     

          AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP

                  NOTES TO FINANCIAL STATEMENTS

                   DECEMBER 31, 1998 AND 1997

(7)  Income Taxes - (Continued)

     The  following is a reconciliation of Partners' capital  for
     financial  reporting purposes to Partners' capital  reported
     for federal income tax purposes for the years ended December
     31:
     
                                                   1998         1997
     
     Partners' Capital For
      Financial Reporting Purposes              $4,916,728    $4,195,490
     
     Adjusted Tax Basis of Investments
      In Real Estate Under Net Investments
      In Real Estate for Financial
      Reporting Purposes                          (138,883)     (181,386)
     
     Syndication Costs Treated as
      Reduction of Capital For
      Financial Reporting Purposes                 978,377       978,377
                                                 ----------    ----------
           Partners' Capital For
              Tax Reporting Purposes            $5,756,222    $4,992,481
                                                 ==========    ==========

(8)  Fair Value of Financial Instruments -

     The estimated fair values of the financial instruments, none
     of  which  are held for trading purposes, are as follows  at
     December 31:
     
                                        1998                    1997
                               Carrying       Fair      Carrying     Fair
                                Amount        Value      Amount      Value
     
     Cash                   $      317   $      317    $     171   $     171
     Money Market Funds      2,571,932    2,571,932      174,512     174,512
                             ----------   ----------    ---------   ---------
        Total Cash and
           Cash Equivalents $2,572,249   $2,572,249    $ 174,683   $ 174,683
                             ==========   ==========    =========   =========
     

ITEM 8.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
       ACCOUNTING AND FINANCIAL DISCLOSURE.

       None.

                                
                            PART III
                                
ITEM 9.DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
       PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
       ACT.

        The  registrant  is  a  limited partnership  and  has  no
officers,  directors, or direct employees.  The General  Partners
of  the  registrant are Robert P. Johnson and NLM.   The  General
Partners  manage and control the Partnership's affairs  and  have
general  responsibility and the ultimate authority in all matters
affecting the Partnership's business.  The director and  officers
of NLM are as follows:

        Robert  P.  Johnson, age 54, is Chief Executive  Officer,
President  and  Director and has held these positions  since  the
formation  of  NLM  in November, 1984, and has  been  elected  to
continue in these positions until December, 1999.  From  1970  to
the  present, he has been employed exclusively in the  investment
industry,  specializing  in  tax-advantaged  limited  partnership
investments.   In  that  capacity, he has been  involved  in  the
development,  analysis, marketing and management  of  public  and
private investment programs investing in net lease properties  as
well  as  public  and  private investment programs  investing  in
energy  development.   Since  1971,  Mr.  Johnson  has  been  the
president,  a  director  and  a  registered  principal   of   AEI
Securities, Inc. (formerly AEI Incorporated), which is registered
with  the  Securities  and Exchange Commission  as  a  securities
broker-dealer,  is  a  member  of  the  National  Association  of
Securities  Dealers, Inc. (NASD) and is a member of the  Security
Investors  Protection Corporation (SIPC).  Mr. Johnson  has  been
president, a director and the principal shareholder of  AEI  Fund
Management,  Inc.,  a real estate management company  founded  by
him,  since 1978.  Mr. Johnson is currently a general partner  or
principal  of  the  general partner in  seventeen  other  limited
partnerships.

        Mark  E.  Larson,  age 46, is Executive  Vice  President,
Treasurer  and  Chief Financial Officer and has been  elected  to
continue in these positions until December, 1999.  Mr. Larson has
been  Treasurer and Executive Vice President since December, 1987
and  Chief  Financial Officer since January, 1990.   In  January,
1993,  Mr.  Larson was elected to serve as Secretary of  NLM  and
will continue to serve until December, 1999.  Mr. Larson has been
employed  by  AEI  Fund Management, Inc. and affiliated  entities
since  1985.   From  1979  to 1985, Mr. Larson  was  with  Apache
Corporation as manager of Program Accounting responsible for  the
accounting  and reports for approximately 45 public partnerships.
Mr.   Larson   is  responsible  for  supervising  the  accounting
functions of NLM and the registrant.

ITEM 10.    EXECUTIVE COMPENSATION.

        The General Partner and affiliates are reimbursed at cost
for  all  services performed on behalf of the registrant and  for
all  third party expenses paid on behalf of the registrant.   The
cost for services performed on behalf of the registrant is actual
time  spent  performing such services plus  an  overhead  burden.
These  services include organizing the registrant  and  arranging
for  the  offer  and  sale  of Units,  reviewing  properties  for
acquisition and rendering administrative and management services.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT.

        The following table sets forth information pertaining  to
the   ownership  of  the  Units  by  each  person  known  by  the
Partnership to beneficially own 5% or more of the Units, by  each
General  Partner, and by each officer or director of the Managing
General Partner as of February 28, 1999:

     Name and Address                             Number of     Percent
   of Beneficial Owner                            Units Held    of Class

   Net Lease Management 85-A, Inc.                    14.5          *
   1300 Minnesota World Trade Center
   30 East 7th Street, St. Paul, Minnesota 55101

   Robert P. Johnson                                     0          0%
   1300 Minnesota World Trade Center
   30 East 7th Street, St. Paul, Minnesota 55101

   Mark E. Larson                                        0          0%
   1300 Minnesota World Trade Center
   30 East 7th Street, St. Paul, Minnesota 55101

   * Less than 1%
   
The  persons  set forth in the preceding table hold  sole  voting
power  and power of disposition with respect to all of the  Units
set forth opposite their names.  The General Partners know of  no
holders of more than 5% of the outstanding Units.

ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

        The  registrant,  NLM  and  its  affiliates  have  common
management and utilize the same facilities.  As a result, certain
administrative  expenses  are  allocated  among   these   related
entities.   All  of  such activities and any  other  transactions
involving the affiliates of the General Partner of the registrant
are  governed  by,  and  are conducted in  conformity  with,  the
limitations set forth in the Limited Partnership Agreement of the
registrant.  Reference is made to Note 3 on Page 19 and  20,  and
is incorporated herein by reference, for details of Related Party
Transactions.


                             PART IV

ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K AND 8-K/A.

            A.   Exhibits -
                                Description

               10.1  Purchase Agreement dated September  9,
                     1998  between  the Partnership  and  Tom  S.
                     Obata,   Trustee  of  That  Certain  "Living
                     Trust"  relating to the property at  389  N.
                     Hamline Avenue, St. Paul, Minnesota.

                   PART II - OTHER INFORMATION
                           (Continued)
                                
ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K  (Continued)

            A. Exhibits -
                                Description

               10.2  Purchase Agreement dated September  10,
                     1998  between the Partnership  and  Jack  S.
                     Obata and Atsuko Obata, Trustee of the  Jack
                     S.  and  Atsuko Obata Revocable Trust  dated
                     12/30/74 relating to the property at 389  N.
                     Hamline Avenue, St. Paul, Minnesota.

               10.3  Property    Co-Tenancy    Ownership
                     Agreement  dated September 16, 1998  between
                     the  Partnership and Tom S.  Obata,  Trustee
                     of  That Certain "Living Trust" relating  to
                     the  property at 389 N. Hamline Avenue,  St.
                     Paul, Minnesota.

               10.4  Property    Co-Tenancy    Ownership
                     Agreement  dated September 16, 1998  between
                     the   Partnership  and  Jack  S.  Obata  and
                     Atsuko  Obata, Trustee of the  Jack  S.  and
                     Atsuko  Obata Revocable Trust dated 12/30/74
                     relating  to the property at 389 N.  Hamline
                     Avenue, St. Paul, Minnesota.

               10.5  Purchase  Agreement  dated
                     October  27,  1998 between  the  Partnership
                     and  Jean Ann Morrison, Trustee of The  Jean
                     Morrison  Trust, dated 4/26/85  relating  to
                     the  property at 389 N. Hamline Avenue,  St.
                     Paul, Minnesota.

               10.6  Property    Co-Tenancy
                     Ownership Agreement dated October  29,  1998
                     between   the  Partnership  and   Jean   Ann
                     Morrison,  Trustee  of  The  Jean   Morrison
                     Trust,   dated  4/26/85  relating   to   the
                     property  at  389  N.  Hamline  Avenue,  St.
                     Paul, Minnesota.

               10.7  Purchase Agreement dated November  10,
                     1998  between the Partnership and Renaissant
                     Development  Corporation  relating  to   the
                     property  at  1519  W. Harrison,  Harlingen,
                     Texas  (incorporated by reference to Exhibit
                     10.1  of  Form 8-K filed with the Commission
                     on January 5, 1999).

               10.8  Purchase  Agreement  dated
                     November  19,  1998 between the  Partnership
                     and  Joan G. Cairns relating to the property
                     at   389   N.  Hamline  Avenue,  St.   Paul,
                     Minnesota.

               10.9  Property    Co-Tenancy
                     Ownership Agreement dated November 25,  1998
                     between  the Partnership and Joan G.  Cairns
                     relating  to the property at 389 N.  Hamline
                     Avenue, St. Paul, Minnesota.

              10.10  Development  Financing
                     Agreement  dated December 17,  1998  between
                     the  Partnership, Net Lease Income &  Growth
                     Fund  84-A Limited Partnership and RTM  Mid-
                     America,  Inc. relating to the  property  at
                     4633 32nd Avenue, Hudsonville, Michigan.

                   PART II - OTHER INFORMATION
                           (Continued)
                                
ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K  (Continued)

            A. Exhibits -
                              Description

              10.11  Net  Lease  Agreement
                     dated   December   17,  1998   between   the
                     Partnership, Net Lease Income & Growth  Fund
                     84-A   Limited  Partnership  and  RTM   Mid-
                     America,  Inc. relating to the  property  at
                     4633 32nd Avenue, Hudsonville, Michigan.

                27   Financial Data Schedule for
                     year ended December 31, 1998.

            B.   Reports on Form 8-K and 8-K/A - None.


                           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.

                            AEI REAL ESTATE FUND 85-A
                            Limited Partnership
                            By: Net Lease Management 85-A, Inc.
                            Its Managing General Partner


March 12, 1999              By: /s/ Robert P. Johnson
                                    Robert P. Johnson, President and Director
                                    (Principal Executive Officer)


        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.

 Name                                    Title                        Date


/s/ Robert P. Johnson   President (Principal Executive Officer)  March 12, 1999
    Robert P. Johnson   and Sole Director of Managing General
                        Partner

/s/ Mark E. Larson      Executive Vice President, Treasurer      March 12, 1999
    Mark E. Larson      and Chief Financial Officer
                        (Principal Accounting Officer)