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

                                  FORM 10- K/A
                          Amendment No. 2 to Form 10-K

                                   (Mark One)

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

                 For the fiscal year ended     December 31, 2000
                                               -----------------

                                       OR

     [          ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                               SECURITIES EXCHANGE
                          ACT OF 1934 [NO FEE REQUIRED]

                   For the transition period from          to

                     Commission file number          0-19137
                                                     -------

                  AIRFUND II International Limited Partnership
                  --------------------------------------------
             (Exact name of registrant as specified in its charter)

    Massachusetts                                                 04-3057290
    (State or other jurisdiction of                             (IRS Employer
   incorporation or organization)                         Identification No.)

    88 Broad Street, Boston, MA                                        02110
   (Address of principal executive offices)                        (Zip Code)

      Registrant's telephone number, including area code     (617) 854-5800
                                                             --------------

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

        Title of each class     Name of each exchange on which registered


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

            2,714,647 Units Representing Limited Partnership Interest
            ---------------------------------------------------------
                                (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 is not contained herein, and will not be contained herein,
to  the  best  of  registrant's  knowledge,  in  definite  proxy  or information
statements  incorporated  by  reference  in  Part  III  of this Form 10-K or any
amendment  to  this  Form  10-K.  [  ]

State  the  aggregate  market value of the voting stock held by nonaffiliates of
the  registrant.  Not  applicable.  Securities  are  nonvoting for this purpose.
Refer  to  Item  12  for  further  information.



<PAGE>
                                EXPLANATORY NOTE


     After  AIRFUND  II  International  Limited  Partnership ("the Partnership")
filed  its  Annual Report on Form 10-K/A Amendment No. 1 to Form 10-K (the "2000
10-K")  for  the  year ended December 31, 2000 with the United States Securities
and  Exchange Commission ("SEC"), the Partnership determined that the accounting
treatment  for  the  loan  receivable  from  Echelon  Residential  Holdings  LLC
("Echelon  Residential  Holdings")  required  revision,  as  explained  below.

     As  reported  in  the  2000  10-K, on March 8, 2000, the Partnership and 10
affiliated  partnerships (the ''Exchange Partnerships'') collectively loaned $32
million  to  Echelon  Residential  Holdings, a newly formed real estate company.
The  Partnership's  loan  to Echelon Residential Holdings is $3,640,000. Echelon
Residential  Holdings,  through  a  wholly owned subsidiary (Echelon Residential
LLC),  used the loan proceeds to acquire various real estate assets from Echelon
International  Corporation,  an unrelated Florida-based real estate company. The
loan  has  a  term  of  30  months,  maturing on September 8, 2002 and an annual
interest  rate  of 14% for the first 24 months and 18% for the final six months.
Interest accrues and compounds monthly and is payable at maturity. In connection
with  the  transaction,  Echelon  Residential  Holdings  has  pledged a security
interest  in  all  of  its  right,  title  and interest in and to its membership
interests in Echelon Residential LLC to the Exchange Partnerships as collateral.

     The loan receivable was previously accounted for and reported in accordance
with  the  guidance  for  Acquisition, Development and Construction Arrangements
("ADC arrangements") in the Partnership's financial statements as of and for the
year  December  31,  2000.  The  loan  was  presented as an investment in a real
estate  venture  and  was  presented net of the Partnership's share of losses in
Echelon  Residential  Holdings.  The Partnership was allocated its proportionate
share  of  the  unconsolidated  real  estate  venture's  net loss, excluding the
interest  expense  on  the  loan, based on the balance of its loan receivable in
relation  to the real estate venture's total equity and notes payable, including
the ADC arrangements.  For the period ended December 31, 2000, the Partnership's
share  of  losses in Echelon Residential Holdings was $276,289 and was reflected
on  the  Statement of Operations as ''Partnership's share of unconsolidated real
estate  venture's  loss''.

     Subsequent  to  the  issuance of the Partnership's financial statements for
the  year  ended  December  31,  2000,  the Partnership determined that the loan
receivable  should  be  accounted  for  consistent  with  its legal form and the
Partnership  should  recognize  the  interest  income,  as  calculated  per  the
contractual  terms  of the loan agreement to the extent such interest income was
evaluated  as  likely to be collected.  The loan receivable and related interest
should  be  evaluated  for  impairment  under  Statement of Financial Accounting
Standards  No.  114  "Accounting  by  Creditors  for  Impairment  of  a  Loan".

          Accordingly,  the  Partnership  reversed  the  proportionate  share of
losses  in  Echelon  Residential  Holdings  of  $276,289 previously recorded and
recognized  interest income of $446,086, resulting in a decrease in the net loss
for  the  year  ended  December  31,  2000  of  $722,375,  or  $0.25 per limited
partnership  unit.  As  a  result, the accompanying financial statements for the
year  ended  December  31,  2000  have been restated from the amounts previously
reported.  In  addition,  during  the second quarter of 2001 the General Partner
determined  that  recoverability of the loan receivable had been impaired and at
June  30,  2001  recorded  an  impairment  of  $318,500,  reflecting the General
Partner's current assessment of the amount of loss that is likely to be incurred
by the Partnership. In addition to the write-down recorded at June 30, 2001, the
Partnership  reserved  all  accrued  interest  of  $590,772 recorded on the loan
receivable  through  March 31, 2001 and has ceased accruing interest on its loan
receivable  from  Echelon  Residential  Holdings,  effective  April  1,  2001.

<PAGE>

A  summary  of  the  significant  effects  of  the  restatement  is  as follows:

                             As of and for the Year Ended
                                    December 31, 2000:

<TABLE>
<CAPTION>

                                                As
                                            Previously        As
Statement of Operations                      Reported      Restated
                                           ------------  ------------
<S>                                        <C>           <C>
Income:

   Operating lease revenue                 $   554,415   $   554,415
   Sales-type lease revenue                      2,491         2,491
   Interest income                             202,930       202,930
   Interest income - loan receivable                 -       446,086
   Gain on sale of equipment                   884,573       884,573
   Other income                                300,977       300,977
                                           ------------  ------------
  Total income                               1,945,386     2,391,472
                                           ------------  ------------

Expenses:

   Depreciation                                297,611       297,611
   Interest expense                            103,919       103,919
   Equipment management fees - affiliate        29,913        29,913
   Operating expenses - affiliate            1,061,428     1,061,428
   Partnership's share of unconsolidated
     real estate venture's loss                276,289             -
                                           ------------  ------------
  Total expenses                             1,769,160     1,492,871
                                           ------------  ------------

Net income                                 $   176,226   $   898,601
                                           ============  ============
Net income per limited partnership unit    $      0.06   $      0.31
                                           ============  ============



Balance Sheet Data:

Total assets                               $ 9,250,375   $ 9,972,750
                                           ============  ============
Total liabilities                          $ 1,550,098   $ 1,550,098
Partners' capital (deficit)
   General Partner                          (2,610,443)   (2,574,324)
   Limited Partnership Interests            10,310,720    10,996,976
                                           ------------  ------------
Total partners' capital                    $ 7,700,277   $ 8,422,652
                                           ============  ============
</TABLE>





<PAGE>
                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                                  FORM 10- K/A

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>


                                                                                                Page

PART I
<S>       <C>                                                                                    <C>
Item 1.   Business                                                                                3

Item 2.   Properties                                                                              7

Item 3.   Legal Proceedings                                                                       7

Item 4.   Submission of Matters to a Vote of Security Holders                                     7


PART II

Item 5.   Market for the Partnership's Securities and Related Security Holder Matters             8

Item 6.   Selected Financial Data                                                                10

Item 7.   Management's Discussion and Analysis of Financial Condition and Results of Operations  10

Item 7A.  Quantitative and Qualitative Disclosures about Market Risks                            18

Item 8.   Financial Statements and Supplementary Data                                            19

Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial Disclosure   43


PART III

Item 10.  Directors and Executive Officers of the Partnership                                    44

Item 11.  Executive Compensation                                                                 45

Item 12.  Security Ownership of Certain Beneficial Owners and Management                         46

Item 13.  Certain Relationships and Related Transactions                                         46


PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K                        48
</TABLE>




<PAGE>
PART  I

Item  1.  Business.
-------------------

     (a)  General  Development  of  Business

     AIRFUND  II  International  Limited  Partnership  (the  "Partnership")  was
organized  as  a  limited  partnership  under  the Massachusetts Uniform Limited
Partnership  Act  (the  "Uniform  Act")  on  July  20,  1989  for the purpose of
acquiring  and leasing to third parties a specified portfolio of used commercial
aircraft.  Partners' capital initially consisted of contributions of $1,000 from
the  General  Partner  (AFG  Aircraft  Management  Corporation,  a Massachusetts
corporation)  and  $100  from  the  Initial  Limited  Partner  (AFG  Assignor
Corporation,  a  Massachusetts  corporation).  The  Partnership issued 2,714,647
units,  representing assignments of limited partnership interests (the "Units"),
to  4,192  investors.  Unitholders  and Limited Partners (other than the Initial
Limited Partner) are collectively referred to as Recognized Owners.  The General
Partner  is  an affiliate of Equis Financial Group Limited Partnership (formerly
known  as  American Finance Group), a Massachusetts limited partnership ("EFG").
The common stock of the General Partner is owned by EFG.  The General Partner is
not  required  to make any other capital contributions to the Partnership except
as  may  be required under the Uniform Act and Section 6.1(b) of the Amended and
Restated  Agreement  and  Certificate  of  Limited  Partnership  (the  "Restated
Agreement,  as  amended",  or  the  "Partnership  Agreement").

     (b)  Financial  Information  About  Industry  Segments

     The  Partnership  is  engaged  in  only  one  operating  industry  segment:
financial  services.  Historically, the Partnership has acquired used commercial
aircraft  and  leased  the  aircraft to creditworthy lessees on a full-payout or
operating  lease  basis.  Full-payout  leases  are  those  in  which  aggregate
undiscounted  noncancellable  rents  equal or exceed the acquisition cost of the
leased  equipment.  Operating  leases  are  those  in  which  the  aggregate
undiscounted  noncancellable  rental payments are less than the acquisition cost
of  the  leased  equipment.  In the year ended December 31,2000, the Partnership
also  entered  into  a  sales-type  lease,  described in Note 3 to the financial
statements  included in Item 8 herein.  Industry segment data is not applicable.

     See  "Management's  Discussion  and  Analysis  of  Financial  Condition and
Results  of  Operations"  included  in  Item  7  herein.

     In  connection  with  a preliminary settlement agreement for a Class Action
Lawsuit  described  in  Note  10 to the financial statements, included in Item 8
herein,  the  court  permitted  the Partnership to invest in any new investment,
including but not limited to new equipment or other business activities, subject
to certain limitations. On March 8, 2000, the Partnership loaned $3,640,000 to a
newly  formed  real  estate  company, Echelon Residential Holdings LLC ("Echelon
Residential  Holdings") to finance the acquisition of real estate assets by that
company.  Echelon  Residential  Holdings,  through  a  wholly  owned  subsidiary
(Echelon  Residential LLC), used the loan proceeds, along with the loan proceeds
from  similar  loans  by ten affiliated partnerships representing $32 million in
the  aggregate, to acquire various real estate assets from Echelon International
Corporation,  an  unrelated  Florida-based  real  estate  company.  Echelon
Residential  Holding's  interest in Echelon Residential is pledged pursuant to a
pledge  agreement  to  the  partnerships  as  collateral  for  the  loans.

     (c)  Narrative  Description  of  Business

     The  Partnership  was  organized  to  acquire a specified portfolio of used
commercial  jet aircraft subject to various full-payout and operating leases and
to  lease  the  aircraft to third parties as income-producing investments.  More
specifically,  the  Partnership's  primary investment objectives were to acquire
and  lease  aircraft  that  would:

     1.  Generate  quarterly  cash  distributions;

     2.  Preserve  and  protect  invested  capital;  and

     3.  Maintain  substantial residual value for ultimate sale of the aircraft.

     The  Partnership  has the additional objective of providing certain federal
income  tax  benefits.

     The  initial  Interim  Closing  date  of  the  Offering  of  Units  of  the
Partnership  was  May  17,  1990.  The  initial  purchase  of  aircraft  and the
associated  lease commitments occurred on May 18, 1990.  Additional purchases of
aircraft  (or  proportionate  interests  in  aircraft)  occurred at each of five
subsequent  Interim  Closings,  the last of which occurred on June 28, 1991, the
Final  Closing.  The  Partnership's  aircraft  and  the  associated  leases  are
described in Note 4 to the financial statements included in Item 8, herein.  The
Restated  Agreement, as amended, provides that the Partnership will terminate no
later than December 31, 2005. However, the Partnership is a Nominal Defendant in
a  Class  Action  Lawsuit,  the  outcome  of which could significantly alter the
nature  of  the  Partnership's  organization and its future business operations.

     The  Partnership  has  no  employees;  however, it is managed pursuant to a
Management  Agreement  with  EFG  or one of its affiliates (the "Manager").  The
Manager's  role,  among other things, is to (i) evaluate, select, negotiate, and
consummate  the  acquisition  of  aircraft, (ii) manage the leasing, re-leasing,
financing,  and  refinancing  of  aircraft,  and  (iii)  arrange  the  resale of
aircraft.  The  Manager  is compensated for such services as provided for in the
Restated  Agreement,  as amended, described in Item 13, herein and Note 7 to the
financial  statements  included  in  Item  8,  herein.

     The  Partnership's  investment in commercial aircraft is, and will continue
to be, subject to various risks, including physical deterioration, technological
obsolescence,  and credit quality and defaults by lessees.  A principal business
risk  of  owning  and  leasing  aircraft is the possibility that aggregate lease
revenues  and  aircraft  sale  proceeds  will  be  insufficient  to  provide  an
acceptable  rate  of  return  on invested capital after payment of all operating
expenses.  Another  risk is that the credit quality of the lease may deteriorate
after  a  lease is made.  In addition, the leasing industry is very competitive.
The  Partnership  is  subject  to considerable competition when the aircraft are
re-leased  or  sold  at  the expiration of current lease terms.  The Partnership
must  compete  with  lease  programs offered directly by manufacturers and other
equipment  leasing  companies,  many  of which have greater resources, including
lease programs organized and managed similarly to the Partnership, and including
other  EFG-sponsored partnerships and trusts, which may seek to re-lease or sell
aircraft  within  their own portfolios to the same customers as the Partnership.
The  terrorist attacks on September 11, 2001 and the commencement of hostilities
thereafter  may  adversely  affect the Partnership's ability to re-lease or sell
equipment.  In addition, default by a lessee under a lease may cause aircraft to
be returned to the Partnership at a time when the General Partner or the Manager
is  unable  to  arrange  for  the  re-lease or sale of such aircraft. This could
result  in  the  loss  of  a  material portion of anticipated revenues. Aircraft
condition,  age,  passenger  capacity, distance capability, fuel efficiency, and
other  factors  influence  market  demand  and  market  values for passenger jet
aircraft.

     All  of  the  Partnership's  aircraft  currently  operate  in international
markets.  All  rents  due  under the leases of these aircraft are denominated in
U.S.  dollars.  However,  the operation of the aircraft in international markets
exposes  the  Partnership  to  certain  political,  credit  and  economic risks.
Regulatory  requirements  of  other  countries  governing aircraft registration,
maintenance,  liability  of  lessors  and  other  matters  may apply.  Political
instability,  changes in national policy, competitive pressures, fuel shortages,
recessions  and other political and economic events adversely affecting world or
regional  trading  markets  or a particular foreign lessee could also create the
risk  that  a  foreign  lessee would be unable to perform its obligations to the
Partnership.  The  recognition in foreign courts of judgments obtained in United
States  courts  may  be difficult or impossible to obtain and foreign procedural
rules  may  otherwise  delay  such  recognition.  It  may  be  difficult for the
Partnership  to  obtain possession of aircraft used outside the United States in
the  event  of  default by the lessee or to enforce its rights under the related
lease.  Moreover,  foreign  jurisdictions may confiscate or expropriate aircraft
without  paying  adequate  compensation.

     Notwithstanding  the  foregoing, the ultimate realization of residual value
for any aircraft is dependent upon many factors, including EFG's ability to sell
and  re-lease  the  aircraft.  Changes  in  market  conditions, industry trends,
technological  advances,  and  other events could converge to enhance or detract
from  asset  values at any given time.  Accordingly, EFG will attempt to monitor
changes  in the airline industry in order to identify opportunities which may be
advantageous  to  the Partnership and which will maximize total cash returns for
each  aircraft.

     The  General  Partner  will determine when each aircraft should be sold and
the  terms of such sale based upon numerous factors with a view toward achieving
the investment objectives of the Partnership.  The General Partner is authorized
to  sell  the  aircraft  prior  to the expiration of the initial lease terms and
intends  to  monitor  and  evaluate  the  market  for  resale of the aircraft to
determine whether an aircraft should remain in the Partnership's portfolio or be
sold.  As  an alternative to sale, the Partnership may enter re-lease agreements
when  considered  advantageous  by  the  General  Partner  and  the  Manager.

     The  loan  made  by the Partnership to Echelon Residential Holdings is, and
will  continue to be, subject to various risks, including the risk of default by
Echelon  Residential  Holdings, which could require the Partnership to foreclose
under  the  pledge  agreement  on  its interests in Echelon Residential LLC. The
ability of Echelon Residential Holdings to make loan payments and the amount the
Partnership  may  realize  after  a  default  would  be dependent upon the risks
generally  associated  with  the real estate lending business including, without
limitation,  the existence of senior financing or other liens on the properties,
general  or  local economic conditions, property values, the sale of properties,
interest  rates,  real  estate  taxes,  other operating expenses, the supply and
demand  for  properties involved, zoning and environmental laws and regulations,
rent  control  laws  and  other  governmental  rules.  A  default  by  Echelon
Residential  Holdings  could  have  a material adverse effect on the future cash
flow  and  operating  results  of  the  Partnership.

      The  Restated Agreement, as amended, prohibits the Partnership from making
loans  to  the  General Partner or its affiliates.  Since the acquisition of the
several  parcels  of  real  estate  from  the  owner  had  to occur prior to the
admission  of  certain  independent  third  parties  as  equity  owners, Echelon
Residential  Holdings  and its wholly owned subsidiary, Echelon Residential LLC,
were  formed  in anticipation of their admission.  The General Partner agreed to
an  officer  of  the  Manager  serving  as  the initial equity holder of Echelon
Residential  Holdings  and as an unpaid manager of Echelon Residential Holdings.
The  officer  made a $185,465 equity investment in Echelon Residential Holdings.
His  return on his equity investment is restricted to the same rate of return as
the  partnerships  realize  on  their loans.  There is a risk that the court may
object to the general partner's action in structuring the loan in this way since
the  officer  may  be  deemed  an  affiliate  and  the loans in violation of the
prohibition  against  loans to affiliates and the court's statement in its order
permitting  New  Investments  that  all  other  provisions  of  the  Partnership
Agreements  governing  the investment objectives and policies of the Partnership
shall  remain  in full force and effect.  The court may require the partnerships
to  restructure  or  divest  the  loan.

     The  Investment Company Act of 1940 (the "1940 Act") places restrictions on
the  capital  structure  and  business  activities  of  companies  registered
thereunder.  The  Partnership  has  active  business operations in the financial
services  industry,  including  equipment  leasing  and  the  loan  to  Echelon
Residential  Holdings.  The  Partnership does not intend to engage in investment
activities  in  a  manner  or to an extent that would require the Partnership to
register  as  an investment company under the 1940 Act.  However, it is possible
that  the  Partnership  may  unintentionally engage in an activity or activities
that  may  be  construed  to  fall within the scope of the 1940 Act. The General
Partner  is engaged in discussions with the staff of the Securities and Exchange
Commission  ("SEC")  regarding  whether  or  not  the  Partnership  may  be  an
inadvertent investment company as a consequence of the above-referenced loan. If
the  Partnership  were  determined to be an unregistered investment company, its
business would be adversely affected.The 1940 Act, among other things, prohibits
an unregistered investment company from offering securities for sale or engaging
in  any  business in interstate commerce and, consequently, leases and contracts
entered  into  by partnerships that are unregistered investment companies may be
voidable.  The  General  Partner  has  consulted  counsel  and believes that the
Partnership  is not an investment company. The General Partner has determined to
take action to resolve the Partnership's status under the 1940 Act by means that
may  include  disposing  or acquiring certain assets that it might not otherwise
dispose  or  acquire.

     On  May 11, 2001, the general partners of the Partnerships that are nominal
defendants in the Class Action Lawsuit received a letter dated May 10, 2001 from
the  Associate  Director  and  Chief  Counsel  of  the  Division  of  Investment
Management  of  the  SEC  informing  the  general partners that the staff of the
Division  believes  that  American  Income  Partners  V-A  Limited  Partnership,
American  Income  Partners V-B Limited Partnership, American Income Partners V-C
Limited  Partnership, American Income Partners V-D Limited Partnership, American
Income  Fund I-A, American Income Fund I-B, American Income Fund I-E and AIRFUND
II  International  Limited  Partnership  (the  "Designated  Partnerships")  are
investment  companies as defined in Section 3(a)(1)(C) of the 1940 Act.  The SEC
staff noted that Section 7 of the 1940 Act makes it unlawful for an unregistered
investment  company, among other things, to offer, sell, purchase or acquire any
security or engage in any business in interstate commerce.  Accordingly, Section
7 would prohibit any partnership that is an unregistered investment company from
engaging  in  any  business in interstate commerce, except transactions that are
merely  incidental  to  its  dissolution.  The  SEC staff asked that the general
partners  advise  them  within  the next 30 days as to what steps the Designated
Partnerships  will  take  to  address  their status under the 1940 Act.  The SEC
staff  asserts  that  the  notes  evidencing  the  loans  to Echelon Residential
Holdings  are  investment  securities  and  the  ownership  of the notes by said
partnerships  cause  them  to  be  investment companies and that, in the case of
American  Income  Partners  V-A Limited Partnership and V-B Limited Partnership,
they  may  have  become investment companies when they received the Semele Group
Inc.  ("Semele") securities as part of the compensation for the sale of a vessel
to  Semele  in  1997.  The  general  partners  have  consulted  with counsel who
specializes  in the 1940 Act and, based on counsel's advice, do not believe that
the  Designated  Partnerships  are  investment  companies.

     The letter also stated that the Division is considering whether to commence
an  enforcement  action with respect to this matter.  Noting that the parties to
the  Class  Action Lawsuit were scheduled to appear before the court in the near
future  to  consider a proposed settlement, and that the SEC staff believed that
its views, as expressed in the letter, would be relevant to the specific matters
that will be considered by the court at the hearing, the SEC staff submitted the
letter  to  the  court  for  its  consideration.

     On  May  15,  2001,  Defendants'  Counsel  filed with the court Defendants'
Status Report pursuant to the court's March 12, 2001 Order.  Defendants reported
that,  notwithstanding  the  parties' best efforts, the staff of the SEC has not
completed  its  review  of  the  solicitation  statement  in connection with the
proposed  settlement  of  the Class Action Lawsuit.  Nonetheless, the Defendants
stated their belief that the parties should continue to pursue the court's final
approval  of  the proposed settlement.  In this regard, the Defendants also have
maintained, on the advice of special 1940 Act counsel that, even if the 1940 Act
applies  to  the  Designated  Partnerships, the 1940 Act does not prohibit going
forward  with  the proposed settlement, as that transaction is merely incidental
to  a  dissolution  of  the  Partnerships  and  therefore  is not subject to the
prohibitions  of  Section  7  of  the  1940  Act.

     The  Defendants  also  referred  to  the SEC staff's letter of May 10, 2001
asserting  that  certain  of  the  partnerships  are investment companies and to
special  1940  Act  counsel's  submissions  to  the  SEC staff setting forth the
reasons  why  the 1940 Act does not apply to the Designated Partnerships, noting
that  counsel  had  informed  the staff of the Division of Investment Management
that,  based  upon  counsel's understanding of the surrounding circumstances and
after  an  in-depth  analysis  of the applicable law, if asked, counsel would be
willing  to  issue  an  opinion  of the firm that none of the partnerships is an
investment  company under the 1940 Act.  The Defendants stated their belief that
the proposed settlement is still viable and in the best interests of the parties
and  that  final  approval  should be pursued.  The Defendants advised the court
that  they believe that if the court were to address the issue of whether or not
the  1940  Act  applies  to  the partnerships and the proposed consolidation, it
could  remove  the  major  obstacle to the settlement being finally consummated.
The  Defendants also requested that the court schedule a hearing to address on a
preliminary  basis  the  objection  to the proposed settlement raised in the SEC
staff's  May  10,  2001  letter.

     Plaintiffs' Counsel also submitted a Plaintiffs' Status Report to the court
on  May  15,  2001  in  which  they  reported  that  the SEC review has not been
concluded  and  that  they  notified the Defendants that they would not agree to
continue  to  stay  the  further  prosecution  of the litigation in favor of the
settlement  and  that  they  intend to seek court approval to immediately resume
active  prosecution of the claims of the Plaintiffs.  Plaintiffs' Counsel stated
in  the Report that the "[p]laintiffs continue to believe that the settlement is
in  the  best  interests of the Operating Partnership Sub-class.  However, since
the  SEC  has  yet  to  complete  its review of the proxy, the Plaintiffs do not
believe  that  the  litigation  should continue to be stayed so that the SEC may
continue  its  regulatory  review for an indefinite period of time."  Plaintiffs
requested  a  pre-trial  conference to schedule filing of Plaintiffs' motion for
class certification on or before May 29, 2001 and resumption of merits discovery
and  discovery  related  to the class certification motion.  Subsequently, after
the May 31, 2001 status conference, on June 4, 2001 the court ordered a March 4,
2002  trial  date  and  referred the case to mediation and to discovery before a
magistrate  judge.

     Subsequently, after the May 31, 2001 status conference, on June 4, 2001 the
court  ordered a March 4, 2002 trial date and referred the case to mediation and
to  discovery before a magistrate judge.  The Defendants and Plaintiffs' Counsel
have continued to negotiate toward a settlement and have reached agreement as to
its  principal  business terms.  As part of the settlement terms, EFG has agreed
to  buy  the  loans  made  by  the  Partnerships to Echelon Residential
Holdings  for  an aggregate $32 million plus interest at 7.5% per annum, if they
are  not  repaid  prior  to  or  at  their  maturity date.  Upon completion of a
stipulation  of  settlement, the parties will submit the settlement to the court
for  approval.

     Revenue  from  major  individual lessees which accounted for 10% or more of
lease  revenue  during  the  years  ended  December  31,  2000, 1999 and 1998 is
incorporated by reference to Note 3 to the financial statements included in Item
8.  Refer  to  Item  14(a)(3) for lease agreements filed with the Securities and
Exchange  Commission.

     EFG  is  a  Massachusetts  limited  partnership  formerly known as American
Finance  Group  ("AFG").  AFG was established in 1988 as a Massachusetts general
partnership  and  succeeded  American  Finance  Group,  Inc.,  a  Massachusetts
corporation  organized  in  1980.  EFG  and  its subsidiaries (collectively, the
"Company")  are  engaged  in  various aspects of the equipment leasing business,
including  EFG's role as Manager or Advisor to the Partnership and several other
direct-participation equipment leasing programs sponsored or co-sponsored by EFG
(the  "Other Investment Programs").  The Company arranges to broker or originate
equipment  leases,  acts  as  remarketing  agent and asset manager, and provides
leasing  support  services,  such  as  billing,  collecting, and asset tracking.

     The  general  partner  of  EFG,  with  a  1% controlling interest, is Equis
Corporation,  a  Massachusetts corporation owned and controlled entirely by Gary
D.  Engle,  its  President,  Chief  Executive  Officer and sole Director.  Equis
Corporation  also  owns  a  controlling 1% general partner interest in EFG's 99%
limited  partner,  GDE  Acquisition  Limited  Partnership ("GDE LP").  Mr. Engle
established  Equis  Corporation and GDE LP in December 1994 for the sole purpose
of  acquiring  the  business  of  AFG.

     In  January 1996, the Company sold certain assets of AFG relating primarily
to  the  business  of  originating  new  leases,  and the name "American Finance
Group,"  and  its  acronym,  to  a  third  party.  AFG changed its name to Equis
Financial  Group  Limited Partnership after the sale was concluded.  Pursuant to
terms  of  the sale agreements, EFG specifically reserved the rights to continue
using  the  name  American  Finance Group and its acronym in connection with the
Partnership  and  the  Other  Investment  Programs  and to continue managing all
assets  owned  by  the  Partnership  and  the  Other  Investment  Programs.

(d) Financial Information About Foreign and Domestic Operations and Export Sales

     Not  applicable.

Item  2.  Properties.
---------------------

     Incorporated  herein  by reference to Note 4 to the financial statements in
Item  8.

Item  3.  Legal  Proceedings.
-----------------------------

     Incorporated  herein by reference to Note 10 to the financial statements in
Item  8.

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

     None.

<PAGE>
PART  II

Item  5.   Market  for  the Partnership's Securities and Related Security Holder
--------------------------------------------------------------------------------
Matters.
--------

     (a)  Market  Information

     There  is  no  public  market  for  the  resale  of the Units and it is not
anticipated  that  a  public  market  for  resale  of  the  Units  will develop.

     (b)  Approximate  Number  of  Security  Holders

     At  December  31,  2000,  there  were  3,923 record holders of Units in the
Partnership.

     (c)  Dividend  History  and  Restrictions

     Historically,  the  amount of cash distributions to be paid to the Partners
has  been  determined  on a quarterly basis (see detail below).  The Partnership
did  not declare distributions in any of the years ended December 31, 2000, 1999
and  1998.

     The  Partnership is a Nominal Defendant in a Class Action Lawsuit described
in  Note 10 to the financial statements included in Item 8, herein.  The General
Partner  has  continued  to  suspend the payment of quarterly cash distributions
pending  final resolution of the Class Action Lawsuit.  Accordingly, future cash
distributions  are  not  expected  to  be paid until the Class Action Lawsuit is
settled  or  adjudicated.

     In  any given year, it is possible that Recognized Owners will be allocated
taxable  income  in  excess  of  distributed  cash. This discrepancy between tax
obligations  and  cash  distributions may or may not continue in the future, and
cash  may  or  may  not  be  available for distribution to the Recognized Owners
adequate  to  cover  any  tax  obligation.

     There  are no formal restrictions under the Restated Agreement, as amended,
that  materially  limit  the  Partnership's  ability  to pay cash distributions,
except  that  the  General  Partner  may  suspend or limit cash distributions to
ensure  that  the  Partnership  maintains sufficient working capital reserves to
cover,  among  other things, operating costs and potential expenditures, such as
refurbishment  costs to remarket aircraft upon lease expiration.  In addition to
the  need  for  funds  in connection with the Class Action Lawsuit, liquidity is
especially  important as the Partnership matures and sells aircraft, because the
remaining aircraft portfolio consists of fewer revenue-producing assets that are
available to cover prospective cash disbursements.  Insufficient liquidity could
inhibit  the  Partnership's  ability  to  sustain its operations or maximize the
realization  of  proceeds  from  remarketing  its  remaining  aircraft.

     In  particular,  the  Partnership  must contemplate the potential liquidity
risks associated with its investment in commercial jet aircraft.  The management
and  remarketing  of aircraft can involve, among other things, significant costs
and  lengthy  remarketing  initiatives.  Although  the Partnership's lessees are
required  to  maintain the aircraft during the period of lease contract, repair,
maintenance,  and/or refurbishment costs at lease expiration can be substantial.
For  example,  an  aircraft  that is returned to the Partnership meeting minimum
airworthiness  standards, such as flight hours or engine cycles, nonetheless may
require  heavy  maintenance  in  order  to bring its engines, airframe and other
hardware  up to standards that will permit its prospective use in commercial air
transportation.

     At  December  31,  2000,  the  Partnership's  equipment  portfolio included
ownership  interests  in three commercial jet aircraft, one of which is a Boeing
737 aircraft.  The Boeing 737 aircraft is a Stage 2 aircraft, meaning that it is
prohibited  from  operating  in the United States unless it is retro-fitted with
hush-kits  to meet Stage 3 noise regulations promulgated by the Federal Aviation
Administration.  During  2000,  the  aircraft was re-leased to Air Slovakia BWJ,
Ltd.  through  September  2003.The  remaining  two aircraft in the Partnership's
portfolio  already  are  Stage  3  compliant.  These  aircraft  have lease terms
expiring  in  April  2001  and  September  2004,  respectively.

     Cash  distributions  consist  of  Distributable  Cash  From  Operations and
Distributable  Cash  From  Sales  or  Refinancings.

     "Distributable  Cash  From  Operations"  means the net cash provided by the
Partnership's  normal  operations after general expenses and current liabilities
of  the  Partnership  are  paid, reduced by any reserves for working capital and
contingent  liabilities  to  be  funded  from  such  cash,  to the extent deemed
reasonable by the General Partner, and increased by any portion of such reserves
deemed  by the General Partner not to be required for Partnership operations and
reduced  by  all accrued and unpaid Equipment Management Fees and, after Payout,
further  reduced  by  all  accrued  and  unpaid  Subordinated  Remarketing Fees.
Distributable  Cash From Operations does not include any Distributable Cash From
Sales  or  Refinancings.

     "Distributable  Cash  From  Sales or Refinancings" means Cash From Sales or
Refinancings as reduced by (i) (a) for a period of two years from Final Closing,
Cash  From  Sales  or  Refinancings,  which  the  General  Partner  at  its sole
discretion  reinvests  in additional aircraft, provided, however, that Cash From
Sales  or  Refinancings  will  be  reinvested  in  additional  aircraft  only if
Partnership  revenues  are  sufficient  to  make distributions to the Recognized
Owners  in  the amount of the income tax, if any, due from a Recognized Owner in
the  33%  combined federal and state income tax bracket as a result of such sale
or  refinancing  of  aircraft,  and  (b)  amounts  realized  from  any  loss  or
destruction  of  any aircraft which the General Partner reinvests in replacement
aircraft  to  be  leased  under  the  original  lease  of  the lost or destroyed
aircraft,  and  (ii) any accrued and unpaid Equipment Management Fees and, after
Payout,  any  accrued  and  unpaid  Subordinated  Remarketing  Fees.

     "Cash  From  Sales  or Refinancings" means cash received by the Partnership
from  Sale  or  Refinancing  transactions,  as  (i) reduced by (a) all debts and
liabilities  of  the  Partnership  required  to  be  paid as a result of Sale or
Refinancing  transactions,  whether  or  not then due and payable (including any
liabilities  on  aircraft  sold  which  are  not  assumed  by  the buyer and any
remarketing  fees required to be paid to persons not affiliated with the General
Partner,  but  not  including  any  Subordinated Remarketing Fees required to be
paid) and (b) any reserves for working capital and contingent liabilities funded
from  such  cash to the extent deemed reasonable by the General Partner and (ii)
increased  by  any portion of such reserves deemed by the General Partner not to
be  required for Partnership operations.  In the event the Partnership accepts a
note  in  connection  with  any  Sale  or  Refinancing transaction, all payments
subsequently received in cash by the Partnership with respect to such note shall
be  included  in Cash From Sales or Refinancings, regardless of the treatment of
such  payments  by  the  Partnership  for  tax  or  accounting purposes.  If the
Partnership  receives  purchase  money obligations in payment for aircraft sold,
which  are  secured  by  liens  on such aircraft, the amount of such obligations
shall  not  be included in Cash From Sales or Refinancings until the obligations
are  fully  satisfied.

     Each  distribution  of Distributable Cash From Operations and Distributable
Cash  From  Sales  or  Refinancings of the Partnership shall be made as follows:
Prior  to Payout, (i) Distributable Cash From Operations will be distributed 95%
to  the  Recognized  Owners and 5% to the General Partner and (ii) Distributable
Cash  From  Sales  or  Refinancings  shall  be distributed 99% to the Recognized
Owners  and 1% to the General Partner.  After Payout, (i) all Distributions will
be  distributed 99% to the General Partner and 1% to the Recognized Owners until
the General Partner has received an amount equal to 5% of all Distributions made
by  the  Partnership  and (ii) thereafter, all Distributions will be made 90% to
the  Recognized  Owners  and  10%  to  the  General  Partner.

     "Payout"  is  defined  as  the  first time when the aggregate amount of all
distributions to the Recognized Owners of Distributable Cash From Operations and
Distributable Cash From Sales or Refinancings equals the aggregate amount of the
Recognized  Owners'  original  capital  contributions  plus  a cumulative annual
return  of  10% (compounded quarterly and calculated beginning with the last day
of  the  month  of the Partnership's Closing Date) on their aggregate unreturned
capital  contributions.  For  purposes of this definition, capital contributions
shall  be  deemed to have been returned only to the extent that distributions of
cash  to  the  Recognized  Owners  exceed  the  amount  required  to satisfy the
cumulative annual return of 10% (compounded quarterly) on the Recognized Owners'
aggregate  unreturned capital contributions, such calculation to be based on the
aggregate  unreturned capital contributions outstanding on the first day of each
fiscal  quarter.

<PAGE>
------

Item  6.  Selected  Financial  Data.
------------------------------------

     The  following data should be read in conjunction with Item 7 "Management's
Discussion  and  Analysis  of Financial Condition and Results of Operations" and
the  financial  statements  included  in  Item  8  herein.

     For  each  of  the  years  in the five year period ended December 31, 2000:

<TABLE>
<CAPTION>


Summary of
 Operations                                  2000          1999         1998          1997          1996
---------------------------------------  -------------  ----------  ------------  ------------  ------------
 .                                        Restated (1)
<S>                                      <C>            <C>         <C>           <C>           <C>

Operating and sales-type lease revenue.  $     556,906  $1,841,170  $ 3,130,704   $ 3,224,618   $ 4,706,774

Interest Income . . . . . . . . . . . .  $     649,016  $  267,788  $   158,844   $   110,635   $   265,820

Net income (loss) . . . . . . . . . . .  $     898,601  $1,892,009  $(1,208,085)  $(1,762,752)  $(3,649,940)

Per Unit:
 Net income (loss). . . . . . . . . . .  $        0.31  $     0.66  $     (0.42)  $     (0.62)  $     (1.28)

 Cash distributions declared. . . . . .  $          --  $       --  $        --   $        --   $      2.25


 Financial Position
---------------------------------------

Total assets. . . . . . . . . . . . . .  $   9,972,750  $9,112,479  $ 8,076,569   $ 9,765,106   $13,163,812

Total long-term obligations . . . . . .  $     906,869  $  981,775  $ 1,896,665   $ 2,677,520   $ 3,419,785

Partners' capital . . . . . . . . . . .  $   8,422,652  $7,524,051  $ 5,632,042   $ 6,840,127   $ 8,602,879
</TABLE>



(1) See Note 1 to the financial statements, included in Item 8 herein, regarding
the  restatement  of  the  Partnership's  2000  financial  statements.

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

                Year ended December 31, 2000 compared to the year
          ended December 31, 1999 and the year ended December 31, 1999
                  compared to the year ended December 31, 1998


     Subsequent  to the issuance of the Partnership's financial statements as of
and  for the year ended December 31, 2000, the Partnership revised its method of
accounting  for  the  loan  receivable  from Echelon Residential Holdings.  As a
result,  the financial statements as of and for the year ended December 31, 2000
have  been  restated  from  amounts  previously  reported.  The  effects  of the
restatement  are  presented  in  Note 1 to the financial statements, included in
Item  8  and  have  been  reflected  herein.  The  following  should  be read in
conjunction  with  the  restated  Financial Statements, including notes thereto.
The  following  discussion compares the restated financial condition and results
of  operations  for  the year ended December 31, 2000 to the year ended December
31,  1999  and  the  year ended December 31, 1999 to the year ended December 31,
1998.

     Certain  statements  in this Form 10-K/A Amendment No. 2 of the Partnership
that  are not historical fact constitute "forward-looking statements" within the
meaning  of the Private Securities Litigation Reform Act of 1995 and are subject
to  a  variety  of  risks and uncertainties.  There are a number of factors that
could  cause  actual  results  to  differ materially from those expressed in any
forward-looking  statements  made  herein.  These  factors  include, but are not
limited  to, the outcome of the Class Action Lawsuit described in Note 10 to the
financial  statements  included  in  Item  8  herein,  the  remarketing  of  the
Partnership's  equipment, and the performance of the Partnership's non-equipment
assets.

Overview
--------

     As  an  equipment  leasing  partnership,  the  Partnership was organized to
acquire  and  lease  a  portfolio  of  commercial  jet aircraft subject to lease
agreements  with third parties.  During 1990 and 1991, the Partnership purchased
four  commercial  jet  aircraft  and  a proportionate interest in two additional
aircraft,  which  were  leased  by  major  carriers,  engaged  in  passenger
transportation.  Initially,  each  aircraft generated rental revenue pursuant to
primary-term  lease  agreements.  Currently,  all  of  the  aircraft  in  the
Partnership's  original  portfolio  have  been re-leased, renewed, exchanged for
other  aircraft,  or  sold.  At  December  31, 2000, the Partnership's equipment
portfolio  included  proportionate ownership interests in three aircraft and two
aircraft  engines.  In  addition,  in  2000  the  Partnership  entered  into  a
conditional  sales agreement related to its interest in an aircraft.  Presently,
the Partnership is a Nominal Defendant in a Class Action Lawsuit, the outcome of
which could significantly alter the nature of the Partnership's organization and
its  future  business  operations.  See  Note  10  to  the  financial statements
included  in  Item 8 herein. Pursuant to the Restated Agreement, as amended, the
Partnership  is  scheduled  to  be  dissolved  by  December  31,  2005.

     The  1940  Act  places  restrictions  on the capital structure and business
activities  of  companies  registered  thereunder.  The  Partnership  has active
business  operations  in  the  financial  services industry, including equipment
leasing  and the loan to Echelon Residential Holdings.  The Partnership does not
intend to engage in investment activities in a manner or to an extent that would
require the Partnership to register as an investment company under the 1940 Act.
However,  it  is  possible that the Partnership may unintentionally engage in an
activity  or  activities  that  may be construed to fall within the scope of the
1940  Act.  The  General Partner is engaged in discussions with the staff of the
SEC  regarding  whether  or not the Partnership may be an inadvertent investment
company  as  a consequence of the above-referenced loan. If the Partnership were
determined  to  be  an  unregistered  investment  company, its business would be
adversely  affected.The  1940 Act, among other things, prohibits an unregistered
investment company from offering securities for sale or engaging in any business
in  interstate  commerce and, consequently, leases and contracts entered into by
partnerships  that  are  unregistered  investment companies may be voidable. The
General  Partner  has consulted counsel and believes that the Partnership is not
an  investment  company.  The  General  Partner has determined to take action to
resolve  the  Partnership's  status under the 1940 Act by means that may include
disposing  or  acquiring  certain  assets that it might not otherwise dispose or
acquire.

     On  May 11, 2001, the general partners of the Partnerships that are nominal
defendants in the Class Action Lawsuit received a letter dated May 10, 2001 from
the  Associate  Director  and  Chief  Counsel  of  the  Division  of  Investment
Management  of  the  SEC  informing  the  general partners that the staff of the
Division  believes  that  American  Income  Partners  V-A  Limited  Partnership,
American  Income  Partners V-B Limited Partnership, American Income Partners V-C
Limited  Partnership, American Income Partners V-D Limited Partnership, American
Income  Fund I-A, American Income Fund I-B, American Income Fund I-E and AIRFUND
II  International  Limited  Partnership  (the  "Designated  Partnerships")  are
investment  companies as defined in Section 3(a)(1)(C) of the 1940 Act.  The SEC
staff noted that Section 7 of the 1940 Act makes it unlawful for an unregistered
investment  company, among other things, to offer, sell, purchase or acquire any
security or engage in any business in interstate commerce.  Accordingly, Section
7 would prohibit any partnership that is an unregistered investment company from
engaging  in  any  business in interstate commerce, except transactions that are
merely  incidental  to  its  dissolution.  The  SEC staff asked that the general
partners  advise  them  within  the next 30 days as to what steps the Designated
Partnerships  will  take  to  address  their status under the 1940 Act.  The SEC
staff  asserts  that  the  notes  evidencing  the  loans  to Echelon Residential
Holdings  are  investment  securities  and  the  ownership  of the notes by said
partnerships  cause  them  to  be  investment companies and that, in the case of
American  Income  Partners  V-A Limited Partnership and V-B Limited Partnership,
they  may  have  become investment companies when they received the Semele Group
Inc.  ("Semele") securities as part of the compensation for the sale of a vessel
to  Semele  in  1997.  The  general  partners  have  consulted  with counsel who
specializes  in the 1940 Act and, based on counsel's advice, do not believe that
the  Designated  Partnerships  are  investment  companies.

     The letter also stated that the Division is considering whether to commence
an  enforcement  action with respect to this matter.  Noting that the parties to
the  Class  Action Lawsuit were scheduled to appear before the court in the near
future  to  consider a proposed settlement, and that the SEC staff believed that
its views, as expressed in the letter, would be relevant to the specific matters
that will be considered by the court at the hearing, the SEC staff submitted the
letter  to  the  court  for  its  consideration.

     On  May  15,  2001,  Defendants'  Counsel  filed with the court Defendants'
Status Report pursuant to the court's March 12, 2001 Order.  Defendants reported
that,  notwithstanding  the  parties' best efforts, the staff of the SEC has not
completed  its  review  of  the  solicitation  statement  in connection with the
proposed  settlement  of  the Class Action Lawsuit.  Nonetheless, the Defendants
stated their belief that the parties should continue to pursue the court's final
approval  of  the proposed settlement.  In this regard, the Defendants also have
maintained, on the advice of special 1940 Act counsel that, even if the 1940 Act
applies to Designated Partnerships, the 1940 Act does not prohibit going forward
with  the  proposed  settlement,  as  that transaction is merely incidental to a
dissolution of the Partnerships and therefore is not subject to the prohibitions
of  Section  7  of  the  1940  Act.

     The  Defendants  also  referred  to  the SEC staff's letter of May 10, 2001
asserting  that  certain  of  the  partnerships  are investment companies and to
special  1940  Act  counsel's  submissions  to  the  SEC staff setting forth the
reasons  why  the 1940 Act does not apply to the Designated Partnerships, noting
that  counsel  had  informed  the staff of the Division of Investment Management
that,  based  upon  counsel's understanding of the surrounding circumstances and
after  an  in-depth  analysis  of the applicable law, if asked, counsel would be
willing  to  issue  an  opinion  of the firm that none of the partnerships is an
investment  company under the 1940 Act.  The Defendants stated their belief that
the proposed settlement is still viable and in the best interests of the parties
and  that  final  approval  should be pursued.  The Defendants advised the court
that  they believe that if the court were to address the issue of whether or not
the  1940  Act  applies  to  the partnerships and the proposed consolidation, it
could  remove  the  major  obstacle to the settlement being finally consummated.
The  Defendants also requested that the court schedule a hearing to address on a
preliminary  basis  the  objection  to the proposed settlement raised in the SEC
staff's  May  10,  2001  letter.

     Plaintiffs' Counsel also submitted a Plaintiffs' Status Report to the court
on  May  15,  2001  in  which  they  reported  that  the SEC review has not been
concluded  and  that  they  notified the Defendants that they would not agree to
continue  to  stay  the  further  prosecution  of the litigation in favor of the
settlement  and  that  they  intend to seek court approval to immediately resume
active  prosecution of the claims of the Plaintiffs.  Plaintiffs' Counsel stated
in  the Report that the "[p]laintiffs continue to believe that the settlement is
in  the  best  interests of the Operating Partnership Sub-class.  However, since
the  SEC  has  yet  to  complete  its review of the proxy, the Plaintiffs do not
believe  that  the  litigation  should continue to be stayed so that the SEC may
continue  its  regulatory  review for an indefinite period of time."  Plaintiffs
requested  a  pre-trial  conference to schedule filing of Plaintiffs' motion for
class certification on or before May 29, 2001 and resumption of merits discovery
and  discovery  related  to the class certification motion.  Subsequently, after
the May 31, 2001 status conference, on June 4, 2001 the court ordered a March 4,
2002  trial  date  and  referred the case to mediation and to discovery before a
magistrate  judge.  The  Defendants  and  Plaintiffs'  Counsel have continued to
negotiate  toward  a  settlement  and have reached agreement as to its principal
business  terms.  As  part  of  the  settlement terms, EFG has agreed to buy the
loans  made  by the Partnerships to Echelon Residential Holdings for an
aggregate  $32  million  plus interest at 7.5% per annum, if they are not repaid
prior  to  or  at  their  maturity  date.  Upon  completion  of a stipulation of
settlement,  the  parties  will submit the settlement to the court for approval.


Results  of  Operations
-----------------------

     For  the year ended December 31, 2000, the Partnership recognized operating
lease  revenue  of  $554,415 compared to $1,841,170 and $3,130,704 for the years
ended  December  31,  1999 and 1998, respectively. The decrease in lease revenue
from  1999 to 2000 resulted primarily from the expiration of lease terms related
to  the  Partnership's interest in three Boeing 737-2H4 aircraft and a McDonnell
Douglas  MD-82  aircraft, as discussed below, and the sales of the Partnership's
Boeing  727-208  ADV  aircraft and its Boeing 727-251 ADV aircraft in April 1999
and  May  2000,  respectively.  The  decrease in lease revenue from 1998 to 1999
resulted  primarily  to  the  non-payment  of  rents  by  the  lessee  of  the
Partnership's  Lockheed  L-1011-100  aircraft  and  the  lessee's  subsequent
liquidation  (see  below),  the  non-payment  of  rents  by  the  lessee  of the
Partnership's Boeing 727-251 ADV aircraft (see below) and the sale of the Boeing
727-208  ADV  aircraft  and  the  Partnership's interest in a Lockheed L-1011-50
aircraft in April 1998.  The amount of operating lease revenues in the near term
will  increase  due to the re-lease of both the McDonnell Douglas MD-82 aircraft
and  one  of  the  Boeing  737-2H4  aircraft  in  September 2000.  Subsequently,
operating  lease revenue is expected to decline due to lease term expiration and
aircraft  sales.  See  discussion  below related to the Partnership's sales-type
lease  revenue  for  the  year  ended  December  31,  2000.

     The  Partnership's  equipment  portfolio  included  assets  in  which  the
Partnership  holds  a proportionate ownership interest.  The remaining interests
are  owned  by  an  affiliated  equipment  leasing  program  sponsored  by Equis
Financial  Group Limited Partnership ("EFG"). The Partnership and each affiliate
individually  report,  in  proportion  to  their respective ownership interests,
their  respective  shares  of  assets,  liabilities,  revenues,  and  expenses
associated  with  the  equipment.

     The  lease terms related to the three Boeing 737-2H4 aircraft, in which the
Partnership  held a proportionate interest, expired on December 31, 1999 and the
aircraft  were stored pending their remarketing. In July 2000, one of the Boeing
737-2H4 aircraft was sold, resulting in $255,645 of proceeds and a net gain, for
financial  statement  purposes,  of $43,102.  In September 2000, a second Boeing
737-2H4  aircraft  was  re-leased, with a lease term expiring in September 2003.
Under  the  terms of this re-lease agreement, the Partnership will receive rents
of  approximately  $350,000 over the term of the lease.  The Partnership entered
into  a conditional sales agreement to sell its interest in the remaining Boeing
737-2H4  aircraft  as  described  below.

     The lease term associated with a McDonnell Douglas MD-82 aircraft, in which
the  Partnership  holds  an  ownership  interest,  expired in January 2000.  The
aircraft  was  re-leased  in  September 2000 to Aerovias de Mexico S.A. de C.V.,
with  a  lease term expiring in September 2004. Under the terms of this re-lease
agreement,  the  Partnership will receive rents of approximately $1,176,358 over
the term of the lease.  The remaining McDonnell Douglas MD-82 aircraft, in which
the  Partnership owns an ownership interest, is currently on lease to Finnair OY
through  April  2001.

     Interest  income for the year ended December 31, 2000 was $649,016 compared
to  $267,788  and  $158,844  for  the  years  ended  December 31, 1999 and 1998,
respectively.  Interest income is typically generated from temporary investments
of  rental  receipts,  equipment  sale  proceeds  in  short-term instruments and
interest  earned  on  the loan receivable from Echelon Residential Holdings. The
amount  of future interest income from the short-term instruments is expected to
fluctuate  as  a  result  of  changing  interest  rates  and  the amount of cash
available  for  investment,  among  other  factors.

     Interest income also included $446,086 for the year ended December 31, 2000
earned  on  the  loan receivable from Echelon Residential Holdings.  On March 8,
2000,  the  Partnership  utilized  $3,640,000  of available cash for the loan to
Echelon  Residential  Holdings.    The entire principal and all accrued interest
on  the  loan is due at the loan's maturity on September 8, 2002.   (See further
discussion  included  in  Note  5 to the financial statements included in Item 8
herein).

     The loan receivable was previously accounted for and reported in accordance
with  the  guidance  for  Acquisition, Development and Construction Arrangements
("ADC arrangements") in the Partnership's financial statements as of and for the
year  December  31,  2000.  The  loan  was  presented as an investment in a real
estate  venture  and  was  presented net of the Partnership's share of losses in
Echelon  Residential  Holdings.  The Partnership was allocated its proportionate
share  of  the  unconsolidated  real  estate  venture's  net loss, excluding the
interest  expense  on  the  loan, based on the balance of its loan receivable in
relation  to the real estate venture's total equity and notes payable, including
the ADC arrangements.  For the period ended December 31, 2000, the Partnership's
share  of  losses in Echelon Residential Holdings was $163,952 and was reflected
on  the  Statement of Operations as ''Partnership's share of unconsolidated real
estate  venture's  loss''.
     Subsequent  to  the  issuance of the Partnership's financial statements for
the  year  ended  December  31,  2000,  the Partnership determined that the loan
receivable  should  be  accounted  for  consistent  with  its legal form and the
Partnership  should  recognize  the  interest  income,  as  calculated  per  the
contractual  terms  of the loan agreement to the extent such interest income was
evaluated  as  likely to be collected.  The loan receivable and related interest
income  should  be  evaluated  for  impairment  under  Statement  of  Financial
Accounting Standards No. 114 "Accounting by Creditors for Impairment of a Loan".
     Accordingly,  the Partnership reversed the proportionate share of losses in
Echelon  Residential  Holdings  of  $163,952  previously recorded and recognized
interest  income  of  $264,711,  resulting in a decrease in the net loss for the
year ended December 31, 2000 of $428,663, or $0.30 per limited partnership unit.
As  a  result, the accompanying financial statements for the year ended December
31,  2000 have been restated from the amounts previously reported.  In addition,
during  the  second  quarter  of  2001  the  General  Partner  determined  that
recoverability  of  the  loan  receivable had been impaired and at June 30, 2001
recorded  an  impairment  of  $189,000, reflecting the General Partner's current
assessment  of  the  amount  of  loss  that  is  likely  to  be  incurred by the
Partnership.  In  addition  to  the  write-down  recorded  at June 30, 2001, the
Partnership  reserved  all  accrued  interest  of  $350,569 recorded on the loan
receivable  through  March 31, 2001 and has ceased accruing interest on its loan
receivable  from  Echelon  Residential  Holdings,  effective  April  1,  2001.

     Other  income  for the year ended December 31, 2000 reflects the receipt of
$245,977  of unused aircraft maintenance reserves related to a sold aircraft and
$55,000  for  the  sale  of  certain  aircraft  records.

     In  October  2000, the Partnership and certain of its affiliates executed a
conditional  sales  agreement  with  Royal  Aviation  Inc.  for  the sale of the
Partnership's  interest  in a Boeing 737-2H4 aircraft. The title to the aircraft
transfers to Royal Aviation Inc., at the expiration of the lease term.  The sale
of the aircraft has been recorded by the Partnership as a sales-type lease, with
a  lease  term  expiring in January 2002.  For the year ended December 31, 2000,
the  Partnership  recorded  a  net  gain  on  sale  of  equipment, for financial
statement  purposes,  of  $91,471 for the Partnership's proportional interest in
the  aircraft  and  recognized  sales-type  lease  revenue  of  $2,491.

     The  Partnership's  Boeing 727-251 ADV aircraft was damaged in an on-ground
accident  in  October  1998  while  being  leased  on  a month-to-month basis by
Transmeridian Airlines, Inc. ("Transmeridian"). In September 1999, Transmeridian
ceased  paying  rent  with  respect  to  this  aircraft.  See  Note  10  to  the
accompanying  financial statements for details regarding legal action undertaken
by the Partnership related to this situation.  In May 2000, the Partnership sold
the  Boeing 727-251 ADV aircraft to a third party for proceeds of $750,000. This
aircraft  was fully depreciated at the time of sale resulting in a net gain, for
financial  statement purposes, of $750,000 for the year ended December 31, 2000.
The  Partnership  recognized  lease  revenue  of $70,000, $560,000, and $876,667
related  to  this  aircraft  during  the years ended December 31, 2000, 1999 and
1998,  respectively.

     In  April  1999,  the  Partnership  sold  its  Boeing 727-208 ADV aircraft,
previously  leased  to  American  Trans Air, Inc. ("ATA"), to the lessee for net
proceeds of $3,109,500.  The aircraft was fully depreciated at the time of sale,
resulting  in  a net gain, for financial statement purposes, of $3,109,500.  The
Partnership  recognized  lease  revenue  of  approximately $246,000 and $762,000
related  to  this  aircraft  for  the  year  ended  December  31, 1999 and 1998,
respectively.

     In August 1998, Classic Airways Limited ("Classic") ceased paying rent with
respect to the Partnership's Lockheed L-1011-100 jet aircraft.  In October 1998,
Classic  filed  for  receivership in the United Kingdom ("UK") and was placed in
liquidation  (see  further  discussion  below).  The  Partnership  earned  lease
revenue  in the amount of approximately $320,000 related to this aircraft during
the  year  ended  December  31,  1998.

     On  April  29,  1998,  at  the expiration of the aircraft's lease term, the
Partnership  sold  its proportional interest in a Lockheed L-1011-50 aircraft to
the  lessee  for  net  proceeds  of $553,699.  The Partnership's interest in the
aircraft  had a net book value of $426,434 at the time of sale, resulting in the
recognition  of  a  net  gain  on  sale,  for  financial  statement purposes, of
$127,265.

          It  cannot  be determined whether future sales of aircraft will result
in  a  net  gain  or a net loss to the Partnership, as such transactions will be
dependent  upon  the  condition  and  type  of  aircraft  being  sold  and their
marketability  at  the  time  of  sale.  In addition, the amount of gain or loss
reported  for financial statement purposes is partly a function of the amount of
accumulated  depreciation  associated  with  the  equipment  being  sold.

     The  ultimate  realization  of  residual  value  for  any  aircraft will be
dependent  upon  many  factors, including EFG's ability to sell and re-lease the
aircraft.  Changes  in  market  conditions,  industry  trends,  technological
advances,  and  other  events  could  converge  to enhance or detract from asset
values at any given time.  EFG attempts to monitor these changes and the airline
industry  in  order  to  identify opportunities which may be advantageous to the
Partnership  and  which  will  maximize  total  cash  returns for each aircraft.

     The  total  economic  value  realized for each aircraft is comprised of all
primary  lease  term  revenue  generated  from  that aircraft, together with its
residual  value.  The  latter  consists  of  cash  proceeds  realized  upon  the
aircraft's sale in addition to all other cash receipts obtained from renting the
aircraft  on  a  re-lease,  renewal  or month-to-month basis.  Consequently, the
amount  of  gain or loss reported in the financial statements is not necessarily
indicative of the total residual value the Partnership achieved from leasing the
aircraft.

     Interest  expense  was  $103,919, $120,701 and $200,679 for the years ended
December  31,  2000, 1999 and 1998, respectively.  Interest expense in near term
will  increase  as  a  result  of the Partnership's debt refinancing in February
2001.  (See  Note  12  to  the  financial  statements  included  in  Item  8.)
Subsequently,  interest  expense  will decline as the principal balance of notes
payable is reduced through the application of rent receipts to outstanding debt.
See  additional  discussion below regarding the refinancing of the debt in 2001.

     Management  fees  of  $29,913,  92,059,  and  156,535  for  the years ended
December 31, 2000, 1999 and 1998, respectively.  Management fees are based on 5%
of  gross  lease  revenue  generated  by  operating leases and 2% of gross lease
revenue  generated  by  full  payout  leases.

     Operating expenses were $1,061,428, $2,059,346 and $1,815,947 for the years
ended  December  31,  2000,  1999  and 1998, respectively. In 2000 and 1999, the
Partnership  accrued  approximately $149,000 and $201,000, respectively, for the
reconfiguration  costs  and  completion  of a D-Check incurred to facilitate the
remarketing  of the McDonnell Douglas MD-82 aircraft released in September 2000.
In  2000,  the  Partnership  also  accrued approximately $201,000 for a required
D-check  for  a  second  McDonnell  Douglas  MD-82  aircraft.  In  addition, the
Partnership  incurred legal fees in connection with the lease-related litigation
described  in Note 10 to the financial statements included in Item 8.  Operating
expenses  in  the  year  ended December 31, 1999 include engine leasing costs of
$984,000  incurred  related  to  the  aircraft leased to Transmeridian and legal
costs  related  to  the  Partnership's  ongoing  litigation.  In  addition,  the
operating expenses in 1998 also included legal costs incurred in connection with
legal  proceedings  related  to  Northwest Airlines, Inc. and Classic. Operating
expenses in 2000, 1999 and 1998 also included approximately $41,000, $50,000 and
$332,000, respectively, related to the Class Action Lawsuit described in Note 10
to the financial statements included in Item 8. Other operating expenses consist
principally of professional service costs, such as audit and legal fees, as well
as  insurance,  printing,  distribution  and  other  remarketing  expenses.
Depreciation  expense  was  $297,611,  $1,054,343,  and $2,451,737 for the years
ended  December  31,  2000,  1999,  and  1998,  respectively.


Liquidity  and  Capital  Resources  and  Discussion  of  Cash  Flows
--------------------------------------------------------------------

     The  Partnership by its nature is a limited life entity.  The Partnership's
principal  operating  activities  derive  from  aircraft  rental  transactions.
Accordingly,  the  Partnership's principal source of cash from operations is the
collection  of  periodic  rents.  These  cash  inflows  are used to satisfy debt
service obligations associated with leveraged leases, and to pay management fees
and  operating  costs.  Operating  activities  generated  a  net cash outflow of
$182,996  in  2000  and  net  cash inflows of $99,270 and $1,550,424 in 1999 and
1998, respectively. Overall, expenses associated with rental activities, such as
management fees, and net cash flow from operating activities will decline as the
Partnership  remarket  its  aircraft.  The Partnership, however, may continue to
incur significant costs to facilitate the successful remarketing of its aircraft
in  the  future.  Ultimately, the Partnership will dispose of all aircraft under
lease.  This  will  occur  principally  through  sale  transactions whereby each
aircraft  will  be  sold to the existing lessee or to a third party.  Generally,
this  will  occur upon expiration of each aircraft's primary or renewal/re-lease
term.  The  amount  of future cash from interest income is expected to fluctuate
as  a  result  of  changing  interest  rates and the level of cash available for
investment,  among  other factors.  The loan to Echelon Residential Holdings and
accrued  interest  thereon  is  due  in  full  at maturity on September 8, 2002.

     Cash  realized  from  aircraft  disposal  transactions  is  reported  under
investing  activities on the accompanying Statement of Cash Flows.  For the year
ended  December  31,  2000,  the  Partnership  realized  net  cash  proceeds  of
$1,005,645 related to its Boeing 737-2H4 and 727-251 ADV aircraft.  In 1999, the
Partnership  received sales proceeds of $3,109,500 related to its Boeing 727-208
ADV  aircraft  formerly leased to ATA.  During the year ended December 31, 1998,
the  Partnership sold its interest in a Lockheed L-1011-50 aircraft and realized
net  cash  proceeds of $553,699.  Future inflows of cash from aircraft disposals
will vary in timing and amount and will be influenced by many factors including,
but  not  limited to, the frequency and timing of lease expirations, the type of
aircraft  being  sold,  their  condition  and age, and future market conditions.

     At  December  31,  2000,  the  Partnership was due aggregate future minimum
lease  payments  of  $1,727,838  from contractual operating and sales-type lease
agreements (see Notes 2 and 5 to the financial statements included in Item 8), a
portion of which will be used to amortize the principal balance of notes payable
of $906,869 (see Note 8 to the financial statements included in Item 8).  At the
expiration  of  the  individual  lease terms underlying the Partnership's future
minimum lease payments, the Partnership will sell its aircraft or enter re-lease
or  renewal  agreements  when considered advantageous by the General Partner and
EFG.  Such  future  remarketing  activities  will  result  in the realization of
additional  cash inflows in the form of sale proceeds or rents from renewals and
re-leases,  the  timing  and extent of which cannot be predicted with certainty.
This  is  because the timing and extent of remarketing events often is dependent
upon  the  needs and interests of the existing lessees.  Some lessees may choose
to  renew  their lease contracts, while others may elect to return the aircraft.
In  the  latter  instances, the aircraft could be re-leased to another lessee or
sold  to  a  third  party.

     In August 1998, a lessee of the Partnership, Classic, ceased paying rent to
the  Partnership with respect to a Lockheed L-1011-100 Aircraft (the "Aircraft")
and  the  Partnership terminated the lease.  Classic then filed for receivership
in  the  United  Kingdom  ("UK")  and  was  placed in liquidation.  Prior to its
liquidation,  Classic  had incurred and failed to pay significant airport ground
fees to BAA plc, Eurocontrol, and CAA (collectively, the "Airport Authorities").
Classic's  failure  to pay such charges resulted in detention of the Aircraft by
BAA  plc.  The  total  of  ground  fees  and  expenses  asserted  by the Airport
Authorities,  which  continued  to  accrue  after  the detention began, exceeded
$1,500,000  at  November  30, 1999.  Prior to that date, the General Partner had
attempted  to reach a negotiated settlement with the Airport Authorities so that
the  Aircraft  could  be  returned  to the Partnership.  Those negotiations were
unsuccessful  and the General Partner determined that the amount of fees owed to
the Airport Authorities was in excess of the Aircraft's value and, therefore, it
would  not  be  in  the  Partnership's  best  interests  to  pay  these  fees.

     BAA  plc  obtained  a  judgment  from  a  UK Court entitling it to sell the
aircraft  to  satisfy  the unpaid charges and, on December 8, 1999, the Aircraft
was  sold  at  auction.  It  is believed that the sale price was insufficient to
satisfy  the  aggregate  fees owed to the Airport Authorities.  Accordingly, the
Partnership  will  not  realize any portion of the sale proceeds obtained by BAA
plc  nor  any  future  residual  value  from  the Aircraft.  Notwithstanding the
foregoing,  the  Partnership  held  the  Aircraft's records, which were sold for
$55,000  in 2000. In addition, the Partnership retains two engines that had been
removed  from  the Aircraft for maintenance prior to Classic's liquidation.  The
General  Partner  is  attempting  to  remarket  these  engines.  At  the date of
Classic's  liquidation,  the  Partnership  had accrued $160,000 of rental income
which  had  not  been collected from Classic and all of which was written off as
uncollectible  in  the  third  quarter of 1998.  The Aircraft, including the two
engines  that  were removed for maintenance, had been fully depreciated prior to
the auction by BAA plc.  Subsequent to the auction, the Aircraft (except for the
two  engines)  was  written  off  by  the  Partnership.

     In  connection  with  a preliminary settlement agreement for a Class Action
Lawsuit described in Note 10 to the financial statements included in Item 8, the
court  permitted  the Partnership to invest in any new investment, including but
not  limited  to  new equipment or other business activities, subject to certain
limitations.  On  March  8,  2000,  the Partnership loaned $3,640,000 to a newly
formed  real  estate  company,  Echelon  Residential  Holdings  to  finance  the
acquisition  of  real  estate  assets  by  that  company.  Echelon  Residential
Holdings,  through a wholly owned subsidiary (Echelon Residential LLC), used the
loan proceeds, along with the loan proceeds from similar loans by ten affiliated
partnerships  representing $32 million in the aggregate, to acquire various real
estate assets from Echelon International Corporation, an unrelated Florida-based
real  estate  company.  Echelon  Residential  Holding's  interest  in  Echelon
Residential LLC is pledged pursuant to a pledge agreement to the partnerships as
collateral  for  the  loans.  The  loan  has  a  term  of 30 months, maturing on
September  8,  2002,  and an annual interest rate of 14% for the first 24 months
and  18% for the final six months. Interest accrues and compounds monthly and is
payable  at  maturity.

     The  loan  made  by the Partnership to Echelon Residential Holdings is, and
will  continue to be, subject to various risks, including the risk of default by
Echelon  Residential  Holdings, which could require the Partnership to foreclose
under  the  pledge  agreement  on  its interests in Echelon Residential LLC. The
ability of Echelon Residential Holdings to make loan payments and the amount the
Partnership  may  realize  after  a  default  would  be dependent upon the risks
generally  associated  with  the real estate lending business including, without
limitation,  the existence of senior financing or other liens on the properties,
general  or  local economic conditions, property values, the sale of properties,
interest  rates,  real  estate  taxes,  other operating expenses, the supply and
demand  for  properties involved, zoning and environmental laws and regulations,
rent  control  laws  and  other  governmental  rules.  A  default  by  Echelon
Residential  Holdings  could  have  a material adverse effect on the future cash
flow  and  operating  results  of the Partnership.  The Partnership periodically
evaluates  the  collectibility  of the loan's contractual principal and interest
and  the  existence  of  loan  impairment  indicators.

     The  Restated  Agreement, as amended, prohibits the Partnership from making
loans  to  the  General Partner or its affiliates.  Since the acquisition of the
several  parcels  of  real  estate  from  the  owner  had  to occur prior to the
admission  of  certain  independent  third  parties  as  equity  owners, Echelon
Residential  Holdings  and its wholly owned subsidiary, Echelon Residential LLC,
were  formed  in anticipation of their admission.  The General Partner agreed to
an  officer  of  the  Manager  serving  as  the initial equity holder of Echelon
Residential  Holdings  and as an unpaid manager of Echelon Residential Holdings.
The  officer  made a $185,465 equity investment in Echelon Residential Holdings.
His  return on his equity investment is restricted to the same rate of return as
the  partnerships  realize  on  their loans.  There is a risk that the court may
object to the General Partner's action in structuring the loan in this way since
the  officer  may  be  deemed  an  affiliate  and  the loans in violation of the
prohibition  against  loans to affiliates and the court's statement in its order
permitting  New  Investments  that  all  other  provisions  of  the  Partnership
Agreements  governing  the investment objectives and policies of the Partnership
shall  remain  in full force and effect.  The court may require the partnerships
to  restructure  or  divest  the  loan.

     The  Partnership  obtained  long-term  financing in connection with certain
aircraft.  The origination of such indebtedness and the subsequent repayments of
principal  are  reported  as  components  of  financing  activities  in  the
Partnership's  Statement  of  Cash Flows.  The corresponding note agreements are
recourse  only  to  the  specific  equipment  financed and to the minimum rental
payments  contracted  to be received during the debt amortization periods (which
generally  coincides  with the lease terms). As rental payments are collected, a
portion  of all of the rental payments is used to repay associated indebtedness.
In  the  near  term,  the  amount  of  cash  used to repay debt obligations will
increase  due  to  the  refinancing discussed below.  Subsequently the amount of
cash  used  will  decline  as  the principal balance of notes payable is reduced
through  the  collection  and  application  of  rents.

     In  February  2000,  the  Partnership  and  certain  affiliated  investment
programs  (collectively,  the  ''Programs'')  refinanced the indebtedness, which
matured  in  January  2000  associated  with  a McDonnell Douglas MD-82 aircraft
re-leased  in  September  2000.  In  addition  to  refinancing  the  existing
indebtedness  of  $3,370,000,  the Programs received additional debt proceeds of
$1,350,000  required  to  perform  a  D-Check  on  the aircraft. The Partnership
received  $201,247  from such proceeds. The note had a fluctuating interest rate
based  on  LIBOR  plus  a  margin  with  interest  payments  due  monthly.  The
Partnership's  aggregate  share  of  the  refinanced  and  new  indebtedness was
$701,062,  which  matured  in August 2000. The Partnership paid interest-only on
the  debt  throughout  2000.  In  February  2001,  the  Programs  refinanced the
outstanding  indebtedness  and  accrued  interest  related to this aircraft.  In
addition  to  refinancing  the Programs' total existing indebtedness and accrued
interest  of  $4,758,845,  the  Programs  received  additional  debt proceeds of
$3,400,177.  The  Partnership's  aggregate  share  of  the  refinanced  and  new
indebtedness  was  $1,211,860  including  $706,831  used  to  repay the existing
indebtedness  on the refinanced aircraft.  The Partnership used a portion of its
share of the additional proceeds of $505,028 to repay the outstanding balance of
the  indebtedness  and  accrued  interest  related  to  the aircraft on lease to
Finnair  OY  of  $130,852  and  certain  aircraft reconfiguration costs that the
Partnership  had  accrued  at  December  31, 2000.  The new indebtedness bears a
fixed interest rate of 7.65%, principal is amortized monthly and the Partnership
has a balloon payment obligation at the expiration of the lease term of $404,138
in  September  2004.

     There  are no formal restrictions under the Restated Agreement, as amended,
that  materially  limit  the  Partnership's  ability  to pay cash distributions,
except  that  the  General  Partner  may  suspend or limit cash distributions to
ensure  that  the  Partnership  maintains sufficient working capital reserves to
cover,  among  other things, operating costs and potential expenditures, such as
refurbishment  costs to remarket aircraft upon lease expiration.  In addition to
the  need  for  funds  in connection with the Class Action Lawsuit, liquidity is
especially  important as the Partnership matures and sells aircraft, because the
remaining aircraft portfolio consists of fewer revenue-producing assets that are
available to cover prospective cash disbursements.  Insufficient liquidity could
inhibit  the  Partnership's  ability  to  sustain its operations or maximize the
realization  of  proceeds  from  remarketing  its  remaining  aircraft.

     The management and remarketing of aircraft can involve, among other things,
significant  costs  and  lengthy  remarketing  initiatives.  Although  the
Partnership's lessees are required to maintain the aircraft during the period of
lease  contract,  repair,  maintenance,  and/or  refurbishment  costs  at  lease
expiration can be substantial.  For example, an aircraft that is returned to the
Partnership  meeting  minimum  airworthiness  standards, such as flight hours or
engine  cycles,  nonetheless may require heavy maintenance in order to bring its
engines,  airframe  and  other  hardware  up  to  standards that will permit its
prospective  use  in  commercial  air  transportation.

     At  December  31,  2000,  the  Partnership's  equipment  portfolio included
ownership  interests  in three commercial jet aircraft, one of which is a Boeing
737 aircraft.  The Boeing 737 aircraft is a Stage 2 aircraft, meaning that it is
prohibited  from  operating  in the United States unless it is retro-fitted with
hush-kits  to meet Stage 3 noise regulations promulgated by the Federal Aviation
Administration.  During  2000,  the  aircraft was re-leased to Air Slovakia BWJ,
Ltd.  through  September  2003.The  remaining  two aircraft in the Partnership's
portfolio  already  are  Stage  3  compliant.  These  aircraft  have lease terms
expiring  in  April  2001  and  September  2004,  respectively.

     The  Partnership's  capital account balances for federal income tax and for
financial reporting purposes are different primarily due to differing treatments
of  income  and expense items for income tax purposes in comparison to financial
reporting  purposes  (generally  referred to as permanent or timing differences;
see  Note  9  to  the  financial  statements included in Item 8).  For instance,
selling  commissions  and  organization  and  offering  costs  pertaining  to
syndication  of  the  Partnership's limited partnership units are not deductible
for  federal  income  tax purposes, but are recorded as a reduction of partners'
capital  for  financial  reporting  purposes.  Therefore,  such  differences are
permanent  differences  between  capital  accounts  for  financial reporting and
federal  income  tax  purposes.  Other  differences between the bases of capital
accounts  for  federal  income tax and financial reporting purposes occur due to
timing  differences  consisting  of  the cumulative difference between income or
loss  for  tax  purposes  and financial statement income or loss.  The principal
components  of  the  cumulative difference between financial statement income or
loss and tax income or loss result from different depreciation policies for book
and  tax  purposes.

     For  financial  reporting  purposes,  the General Partner has accumulated a
capital  deficit  at  December  31,  2000.  This is the result of aggregate cash
distributions to the General Partner being in excess of its capital contribution
of  $1,000  and  its  allocation  of  financial  statement  net  income or loss.
Ultimately,  the  existence  of  a  capital  deficit for the General Partner for
financial  reporting  purposes  is  not  indicative  of  any  further  capital
obligations  to the Partnership by the General Partner.  The Restated Agreement,
as  amended,  requires that upon the dissolution of the Partnership, the General
Partner will be required to contribute to the Partnership an amount equal to any
negative  balance  which may exist in the General Partner's tax capital account.
At  December  31,  2000,  the General Partner had a positive tax capital account
balance.

     In  any given year, it is possible that Recognized Owners will be allocated
taxable  income  in  excess  of  distributed  cash. This discrepancy between tax
obligations  and  cash  distributions may or may not continue in the future, and
cash  may  or  may  not  be  available for distribution to the Recognized Owners
adequate  to  cover  any  tax  obligation.

     The  outcome  of  the  Class  Action  Lawsuit  described  in Note 10 to the
financial  statements  included in Item 8 herein will be the principal factor in
determining  the  future  of  the  Partnership's  operations.   In addition, the
General  Partner  will  continue  to  suspend  the  payment  of  quarterly  cash
distributions  pending  final  resolution  of  the  Class  Action  Lawsuit.
Accordingly,  future  cash  distributions  are not expected to be paid until the
Class  Action  Lawsuit  is  adjudicated.


Item  7A.  Quantitative  and  Qualitative  Disclosures  about  Market  Risks.
-----------------------------------------------------------------------------

     The  Partnership's  financial statements include financial instruments that
are  exposed  to  interest  rate  risks.

     The  Partnership's exposure to market risk for changes in interest rates at
December  31, 2000 related primarily to the Partnership's note payable for which
the  interest  rate  is  based  on the London Interbank Offering Rate ("LIBOR").
However,  subsequent  to  December  31,  2000,  the  Partnership  refinanced its
variable  rate  note  payable with instruments bearing a fixed rate of interest.
The  fair market value of fixed interest rate debt may be adversely impacted due
to  a  decrease  in interest rates.  The effect of a 100 bases point increase in
the  interest  rate on this note payable would not have a material effect on the
Partnership's  financial  statements.

     The Partnership's loan to Echelon Residential Holdings matures on September
8, 2002 and earns interest at a fixed annual rate of 14% for the first 24 months
and  a fixed annual rate of 18% for the last 6 months of the loan, with interest
due  at  maturity.  Investments  earning a fixed rate of interest may have their
fair  market  value  adversely  impacted  due  to a rise in interest rates.  The
effect  of  interest  rate  fluctuations  on  the  Partnership  in  2000 was not
material.

<PAGE>



Item  8.  Financial  Statements  and  Supplementary  Data.
----------------------------------------------------------

     Financial  Statements  (Restated):
<TABLE>
<CAPTION>

<S>                                                       <C>
    Report of Independent Auditors . . . . . . . . . . .  20

    Statement of Financial Position
    at December 31, 2000 and 1999. . . . . . . . . . . .  21

    Statement of Operations
    for the years ended December 31, 2000, 1999 and 1998  22

    Statement of Changes in Partners' Capital
    for the years ended December 31, 2000, 1999 and 1998  23

    Statement of Cash Flows
    for the years ended December 31, 2000, 1999 and 1998  24

    Notes to the Financial Statements. . . . . . . . . .  25
</TABLE>








<PAGE>

                            REPORT OF INDEPENDENT AUDITORS
                            ------------------------------



To  the  Partners  of  AIRFUND  II  International  Limited  Partnership:

We  have audited the accompanying statements of financial position of AIRFUND II
International  Limited  Partnership,  as  of December 31, 2000 and 1999, and the
related  statements  of operations, changes in partners' capital, and cash flows
for  each  of  the  three  years  in  the period ended December 31, 2000.  These
financial  statements  are  the  responsibility of the Partnership's management.
Our  responsibility is to express an opinion on these financial statements based
on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States.  Those  standards  require that we plan and perform the
audit  to obtain reasonable assurance about whether the financial statements are
free  of  material  misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit  also  includes  assessing  the accounting principles used and significant
estimates  made  by  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  AIRFUND II International
Limited  Partnership  at  December  31,  2000  and  1999, and the results of its
operations  and  its  cash flows for each of the three years in the period ended
December  31,  2000, in conformity with accounting principles generally accepted
in  the  United  States.

The  accompanying financial statements for the year ended December 31, 2000 have
been  restated  as  discussed  in  Note  1.


     /S/  ERNST  &  YOUNG  LLP

Tampa,  Florida
March  30,  2001,
except  for Note 1 and the last 7 paragraphs of Note 12, as to which the date is
November  7,  2001

<PAGE>



                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                         STATEMENT OF FINANCIAL POSITION
                           DECEMBER 31, 2000 AND 1999


<TABLE>
<CAPTION>

<S>                                                   <C>            <C>
 .                                                             2000          1999
                                                      -------------  ------------
 .                                                     Restated
 .                                                      (See Note 1)
ASSETS

Cash and cash equivalents. . . . . . . . . . . . . .  $  2,827,385   $ 5,719,642
Rents receivable . . . . . . . . . . . . . . . . . .       116,820            --
Accounts receivable - affiliate. . . . . . . . . . .        33,452         1,476
Other assets . . . . . . . . . . . . . . . . . . . .        24,508        31,742
Interest receivable - loan receivable. . . . . . . .       446,086            --
Loan receivable. . . . . . . . . . . . . . . . . . .     3,640,000            --
Net investment in sales-type lease . . . . . . . . .       240,330            --
Equipment at cost, net of accumulated
    depreciation of $8,152,945 and $18,449,875
    at December 31, 2000 and 1999, respectively. . .     2,644,169     3,359,619
                                                      -------------  ------------
 Total assets. . . . . . . . . . . . . . . . . . . .  $  9,972,750   $ 9,112,479
                                                      =============  ============


LIABILITIES AND PARTNERS' CAPITAL

Notes payable. . . . . . . . . . . . . . . . . . . .  $    906,869   $   981,775
Accrued interest . . . . . . . . . . . . . . . . . .         7,161        13,356
Accrued liabilities. . . . . . . . . . . . . . . . .       591,617       463,324
Accrued liabilities - affiliate. . . . . . . . . . .        17,207        78,593
Deferred rental income . . . . . . . . . . . . . . .        27,244        51,380
                                                      -------------  ------------
 Total liabilities . . . . . . . . . . . . . . . . .     1,550,098     1,588,428
                                                      -------------  ------------

Partners' capital (deficit):
    General Partner. . . . . . . . . . . . . . . . .    (2,574,324)   (2,619,254)
    Limited Partnership Interests (2,714,647 Units;
     initial purchase price of $25 each) . . . . . .    10,996,976    10,143,305
                                                      -------------  ------------
 Total partners' capital . . . . . . . . . . . . . .     8,422,652     7,524,051
                                                      -------------  ------------
 Total liabilities and partners' capital . . . . . .  $  9,972,750   $ 9,112,479
                                                      =============  ============
</TABLE>





















   The accompanying notes are an integral part of these financial statements.
<PAGE>
                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                             STATEMENT OF OPERATIONS
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


<TABLE>
<CAPTION>

<S>                                  <C>            <C>         <C>
 .                                            2000         1999         1998
                                     -------------  ----------  ------------
 .                                    Restated
 .                                     (See Note 1)
Income:
 Operating lease revenue. . . . . .  $    554,415   $1,841,170  $ 3,130,704
 Sales-type lease revenue . . . . .         2,491           --           --
 Interest income. . . . . . . . . .       202,930      267,788      158,844
 Interest income - loan receivable.       446,086           --           --
 Other income . . . . . . . . . . .       300,977           --           --
 Gain on sale of equipment. . . . .       884,573    3,109,500      127,265
                                     -------------  ----------  ------------
 Total income . . . . . . . . . . .     2,391,472    5,218,458    3,416,813
                                     -------------  ----------  ------------



Expenses:
 Depreciation . . . . . . . . . . .       297,611    1,054,343    2,451,737
 Interest expense . . . . . . . . .       103,919      120,701      200,679
 Equipment management fees -
          affiliate . . . . . . . .        29,913       92,059      156,535
 Operating expenses - affiliate . .     1,061,428    2,059,346    1,815,947
                                     -------------  ----------  ------------
   Total expenses . . . . . . . . .     1,492,871    3,326,449    4,624,898
                                     -------------  ----------  ------------

Net income (loss)                    $    898,601   $1,892,009  $(1,208,085)
                                     =============  ==========  ============


Net income (loss)
 per limited partnership unit        $       0.31   $     0.66  $     (0.42)
                                     =============  ==========  ============
</TABLE>



























   The accompanying notes are an integral part of these financial statements.
<PAGE>
                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


<TABLE>
<CAPTION>

<S>                                      <C>           <C>                <C>           <C>
 .                                        General
 .                                        Partner       Recognized Owners
 .                                        Amount        Units              Amount        Total
                                         ------------  -----------------  ------------ ------------

Balance at December 31, 1997. . . . . .  $(2,653,450)          2,714,647  $ 9,493,577   $ 6,840,127

    Net loss - 1998 . . . . . . . . . .      (60,404)                 --   (1,147,681)   (1,208,085)
                                         ------------  -----------------  ------------  ------------

Balance at December 31, 1998. . . . . .   (2,713,854)          2,714,647    8,345,896     5,632,042

    Net income - 1999 . . . . . . . . .       94,600                  --    1,797,409     1,892,009
                                         ------------  -----------------  ------------  ------------

Balance at December 31, 1999. . . . . .   (2,619,254)          2,714,647   10,143,305     7,524,051

     Net income - 2000 (restated) . . .       44,930                  --      853,671       898,601
                                         ------------  -----------------  ------------  ------------


Balance at December 31, 2000 (restated)  $(2,574,324)          2,714,647  $10,996,976   $ 8,422,652
                                         ============  =================  ============  ============
</TABLE>




































   The accompanying notes are an integral part of these financial statements.
<PAGE>
                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                             STATEMENT OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

<TABLE>
<CAPTION>

<S>                                                          <C>            <C>                <C>
 .                                                                    2000               1999             1998
                                                             -------------  -----------------  ---------------
 .                                                               Restated
 .                                                             (See Note 1)
Cash flows provided by (used in) operating activities:
Net income (loss)                                            $    898,601   $      1,892,009   $   (1,208,085)
Adjustments to reconcile net income (loss)
   to net cash (used in) provided by operating activities:
 Depreciation . . . . . . . . . . . . . . . . . . . . . . .       297,611          1,054,343        2,451,737
 Sales-type lease revenue . . . . . . . . . . . . . . . . .        (2,491)                --               --
 Gain on sale of equipment. . . . . . . . . . . . . . . . .      (884,573)        (3,109,500)        (127,265)
Changes in assets and liabilities:
 Decrease (increase) in:
   Rents receivable . . . . . . . . . . . . . . . . . . . .      (116,820)            39,933           25,187
   Accounts receivable - affiliate. . . . . . . . . . . . .       (31,976)            69,702          234,181
   Other assets . . . . . . . . . . . . . . . . . . . . . .         7,234             93,992         (125,734)
       Interest receivable - loan receivable. . . . . . . .      (446,086)                --               --
   Collections on net investment in sales-type lease. . . .        58,928                 --               --
 Increase (decrease) in:
   Accrued interest . . . . . . . . . . . . . . . . . . . .        (6,195)           (11,770)          (4,492)
   Accrued liabilities. . . . . . . . . . . . . . . . . . .       128,293              4,839          450,235
   Accrued liabilities - affiliate. . . . . . . . . . . . .       (61,386)            62,339          (26,270)
   Deferred rental income . . . . . . . . . . . . . . . . .       (24,136)             3,383         (119,070)
                                                             -------------  -----------------  ---------------
 Net cash (used in) provided by operating activities. . . .      (182,996)            99,270        1,550,424
                                                             -------------  -----------------  ---------------

Cash flows provided by (used in) investing activities:
 Proceeds from equipment sales. . . . . . . . . . . . . . .     1,005,645          3,109,500          553,699
 Issuance of loan receivable. . . . . . . . . . . . . . . .    (3,640,000)                --               --
                                                             -------------  -----------------  ---------------
   Net cash (used in) provided by investing activities. . .    (2,634,355)         3,109,500          553,699
                                                             -------------  -----------------  ---------------

Cash flows provided by (used in) financing activities:
 Proceeds from notes payable. . . . . . . . . . . . . . . .       201,247                 --               --
 Principal payments - notes payable . . . . . . . . . . . .      (276,153)          (914,890)        (780,855)
                                                             -------------  -----------------  ---------------
   Net cash used in financing activities. . . . . . . . . .       (74,906)          (914,890)        (780,855)
                                                             -------------  -----------------  ---------------

Net (decrease) increase in cash and cash equivalents           (2,892,257)         2,293,880        1,323,268
Cash and cash equivalents at beginning of year                  5,719,642          3,425,762        2,102,494
                                                             -------------  -----------------  ---------------
Cash and cash equivalents at end of year                     $  2,827,385   $      5,719,642   $    3,425,762
                                                             =============  =================  ===============


Supplemental disclosure of cash flow information:
 Cash paid during the year for interest                      $    110,114   $        132,471   $      205,171
                                                             =============  =================  ===============

Supplemental disclosure of non-cash financing activities:
 Equipment sold on sales-type lease                          $    296,767   $             --   $           --
                                                             =============  =================  ===============
</TABLE>















   The accompanying notes are an integral part of these financial statements.

<PAGE>

                                        46

                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP
                        NOTES TO THE FINANCIAL STATEMENTS

                                DECEMBER 31, 2000


NOTE  1  -  RESTATEMENT  OF  FINANCIAL  STATEMENTS
--------------------------------------------------

     After  AIRFUND  II  International  Limited  Partnership ("the Partnership")
filed  its  Annual Report on Form 10-K/A Amendment No. 1 to Form 10-K (the "2000
10-K")  for  the  year ended December 31, 2000 with the United States Securities
and  Exchange Commission ("SEC"), the Partnership determined that the accounting
treatment  for  the  loan  receivable  from  Echelon  Residential  Holdings  LLC
("Echelon  Residential  Holdings")  required  revision,  as  explained  below.

     On  March  8,  2000,  the  Partnership  and 10 affiliated partnerships (the
''Exchange  Partnerships'')  collectively  loaned  $32  million  to  Echelon
Residential  Holdings,  a  newly  formed  real  estate  company.

     The  Partnership's  loan  to  Echelon  Residential  Holdings is $3,640,000.
Echelon  Residential  Holdings,  through  a  wholly  owned  subsidiary  (Echelon
Residential  LLC),  used the loan proceeds to acquire various real estate assets
from Echelon International Corporation, a Florida-based real estate company. The
loan  has  a  term  of  30  months,  maturing on September 8, 2002 and an annual
interest  rate  of 14% for the first 24 months and 18% for the final six months.
Interest accrues and compounds monthly and is payable at maturity. In connection
with  the  transaction,  Echelon  Residential  Holdings  has  pledged a security
interest  in  all  of  its  right,  title  and interest in and to its membership
interests in Echelon Residential LLC to the Partnerships as collateral.
The loan receivable was previously accounted for and reported in accordance with
the  guidance  for  Acquisition, Development and Construction Arrangements ("ADC
arrangements")  in the Partnership's financial statements as of and for the year
December  31,  2000.  The  loan  was presented as an investment in a real estate
venture  and  was  presented net of the Partnership's share of losses in Echelon
Residential  Holdings.  The Partnership was allocated its proportionate share of
the  unconsolidated  real  estate  venture's  net  loss,  excluding the interest
expense  on the loan, based on the balance of its loan receivable in relation to
the  real  estate  venture's  total  equity and notes payable, including the ADC
arrangements.  For  the  period ended December 31, 2000, the Partnership's share
of  losses in Echelon Residential Holdings was $276,289 and was reflected on the
Statement  of  Operations as ''Partnership's share of unconsolidated real estate
venture's  loss''.
     Subsequent  to  the  issuance of the Partnership's financial statements for
the  year  ended  December  31,  2000,  the Partnership determined that the loan
receivable  and  related  interest  should  be accounted for consistent with its
legal  form  and  the  Partnership  should  recognize  the  interest  income, as
calculated  per  the  contractual terms of the loan agreement to the extent such
interest  income  was  evaluated as likely to be collected.  The loan receivable
and  related  interest  should  be  evaluated  for impairment under Statement of
Financial  Accounting  Standards No. 114 "Accounting by Creditors for Impairment
of  a  Loan".
     Accordingly,  the Partnership reversed the proportionate share of losses in
Echelon  Residential  Holdings  of  $276,289  previously recorded and recognized
interest  income  of  $446,086,  resulting in a decrease in the net loss for the
year ended December 31, 2000 of $722,375, or $0.25 per limited partnership unit.
As  a  result, the accompanying financial statements for the year ended December
31,  2000 have been restated from the amounts previously reported.  In addition,
during  the  second  quarter  of  2001  the  General  Partner  determined  that
recoverability  of  the  loan  receivable had been impaired and at June 30, 2001
recorded  an  impairment  of  $318,500, reflecting the General Partner's current
assessment  of  the  amount  of  loss  that  is  likely  to  be  incurred by the
Partnership.  In  addition  to  the  write-down  recorded  at June 30, 2001, the
Partnership  reserved  all  accrued  interest  of  $590,772 recorded on the loan
receivable  through  March 31, 2001 and has ceased accruing interest on its loan
receivable  from  Echelon  Residential  Holdings,  effective  April  1,  2001.

NOTE  2  -  ORGANIZATION  AND  PARTNERSHIP  MATTERS
---------------------------------------------------

     The  Partnership  was  organized  as  a  limited  partnership  under  the
Massachusetts  Uniform  Limited  Partnership Act (the "Uniform Act") on July 20,
1989  for  the  purpose  of  acquiring  and leasing to third parties a specified
portfolio of used commercial aircraft.  Partners' capital initially consisted of
contributions  of  $1,000  from  the  General  Partner  (AFG Aircraft Management
Corporation,  a  Massachusetts  corporation)  and  $100 from the Initial Limited
Partner  (AFG  Assignor  Corporation,  a  Massachusetts  corporation).  The
Partnership  issued  2,714,647  units,  representing  assignments  of  limited
partnership  interests  (the  "Units"),  to  4,192  investors.  Unitholders  and
Limited  Partners  (other  than  the  Initial  Limited Partner) are collectively
referred  to as Recognized Owners.  The General Partner is an affiliate of Equis
Financial  Group Limited Partnership (formerly known as American Finance Group),
a  Massachusetts  limited  partnership ("EFG").  The common stock of the General
Partner  is owned by EFG.  The General Partner is not required to make any other
capital  contributions  to  the  Partnership except as may be required under the
Uniform  Act  and  Section  6.1(b)  of  the  Amended  and Restated Agreement and
Certificate  of  Limited  Partnership  (the  "Restated  Agreement, as amended").

     EFG is a Massachusetts partnership formerly known as American Finance Group
("AFG").  AFG was established in 1988 as a Massachusetts general partnership and
succeeded American Finance Group, Inc., a Massachusetts corporation organized in
1980.  EFG  and  its  subsidiaries  (collectively, the "Company") are engaged in
various  aspects  of  the  equipment  leasing  business, including EFG's role as
Equipment  Manager  or  Advisor  to  the  Partnership  and  several  other
direct-participation equipment leasing programs sponsored or co-sponsored by EFG
(the  "Other Investment Programs").  The Company arranges to broker or originate
equipment  leases,  acts  as  remarketing  agent and asset manager, and provides
leasing  support  services,  such  as  billing,  collecting, and asset tracking.

     The  general  partner  of  EFG,  with  a  1% controlling interest, is Equis
Corporation,  a  Massachusetts corporation owned and controlled entirely by Gary
D.  Engle,  its  President,  Chief  Executive  Officer and sole Director.  Equis
Corporation  also  owns  a  controlling 1% general partner interest in EFG's 99%
limited  partner,  GDE  Acquisition  Limited  Partnership  ("GDE  LP").  Equis
Corporation  and  GDE  LP were established in December 1994 by Mr. Engle for the
sole  purpose  of  acquiring  the  business  of  AFG.

     In  January 1996, the Company sold certain assets of AFG relating primarily
to  the  business  of  originating  new  leases,  and the name "American Finance
Group,"  and  its  acronym,  to  a  third  party.  AFG changed its name to Equis
Financial  Group  Limited Partnership after the sale was concluded.  Pursuant to
terms  of  the sale agreements, EFG specifically reserved the rights to continue
using  the  name  American  Finance Group and its acronym in connection with the
Partnership  and  the  Other  Investment  Programs  and to continue managing all
assets  owned  by  the  Partnership  and  the  Other  Investment  Programs.

     In  1990,  EFG  assigned  its  Equipment  Management  Agreement  with  the
Partnership  to AF/AIP Programs Limited Partnership, and AF/AIP Programs Limited
Partnership  entered  into  an  identical  management  agreement  with  EFG.

     On  June  28, 1991, the Offering of Units of the Partnership was concluded.
The  Partnership  issued an aggregate of 2,714,647 Units in six Interim Closings
during  the  period May 17, 1990 through June 28, 1991.  The initial purchase of
the  aircraft  and  the  associated  lease commitments occurred on May 18, 1990.
Additional  purchases  of  aircraft  (or  proportionate  interests  in aircraft)
occurred subsequent to each Closing.  The six Interim Closings which occurred in
1990  and  1991  and  the  associated Units issued, purchase price and number of
investors  who became Recognized Owners of the Partnership are summarized below.
<TABLE>
<CAPTION>


 .                         .               .         Recognized
       Closing Date  Units Issued  Purchase Price     Owners
-------------------  ------------  ---------------  ----------
<S>                  <C>           <C>              <C>
May 17, 1990. . . .     1,725,100  $    43,127,500       2,600
August 2, 1990. . .       317,986        7,949,650         494
October 1, 1990 . .       159,510        3,987,750         251
December 27, 1990 .       246,845        6,171,125         398
February 15, 1991 .       112,796        2,819,900         173
June 28, 1991 . . .       152,410        3,810,250         276
                     ------------  ---------------  ----------

  Totals. . . . . .     2,714,647  $    67,866,175       4,192
                     ============  ===============  ==========
</TABLE>


     Pursuant  to  the  Restated  Agreement,  as  amended,  distributions  of
Distributable  Cash  From  Operations  and  Distributable  Cash  From  Sales  or
Refinancings  of  the Partnership shall be made as follows: Prior to Payout, (i)
Distributable  Cash  From  Operations  will be distributed 95% to the Recognized
Owners  and  5% to the General Partner and (ii) Distributable Cash From Sales or
Refinancings  shall  be  distributed  99% to the Recognized Owners and 1% to the
General Partner.  After Payout, (i) all Distributions will be distributed 99% to
the  General  Partner  and 1% to the Recognized Owners until the General Partner
has  received an amount equal to 5% of all Distributions made by the Partnership
and (ii) thereafter, all Distributions will be made 90% to the Recognized Owners
and  10%  to  the  General  Partner.

     Under  the terms of a Management Agreement between the Partnership and EFG,
management  services  are  provided  by EFG to the Partnership at fees which the
General  Partner  believes  to be competitive for similar services (see Note 7).

NOTE  3  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
----------------------------------------------------------

Cash
----

     The  Partnership  considers  liquid investment instruments purchased with a
maturity of three months or less to be cash equivalents.  From time to time, the
Partnership invests excess cash with large institutional banks in federal agency
discount  notes  and  in repurchase agreements with overnight maturities.  Under
the  terms  of  the agreements, title to the underlying securities passes to the
Partnership.  The  securities  underlying  the  agreements  are  book  entry
securities.  At  December  31,  2000, the Partnership had $2,710,280 invested in
federal  agency  discount  notes, repurchase agreements secured by U.S. Treasury
Bills  or  interests  in  U.S.  Government  securities,  or  other highly liquid
overnight  investments.

Revenue  Recognition
--------------------

     Effective  January  1,  2000,  the  Partnership  adopted  the provisions of
Securities  Exchange  Commission  Staff  Accounting  Bulletin  No. 101, "Revenue
Recognition  in  Financial  Statements"  ("SAB  No. 101").  SAB No. 101 provides
guidance  for  the  recognition,  presentation  and  disclosure  of  revenue  in
financial  statements.  The  adoption  of  SAB  No.  101  had  no  impact on the
Partnership's  financial  statements.

     Rents  are  payable  to the Partnership monthly, quarterly or semi-annually
and  no  significant amounts are calculated on factors other than the passage of
time.  The  leases are accounted for as operating leases and are noncancellable.
Rents received prior to their due dates are deferred.  In certain instances, the
Partnership  may  enter  renewal  or re-lease agreements which expire beyond the
Partnership's  anticipated  dissolution date.  This circumstance is not expected
to  prevent  the orderly wind-up of the Partnership's business activities as the
General  Partner  and EFG would seek to sell the then-remaining equipment assets
either  to  the lessee or to a third party, taking into consideration the amount
of  future  noncancellable  rental  payments associated with the attendant lease
agreements.  See  also  Note  10  regarding  the  Class  Action Lawsuit.  Future
minimum  rents  are  $1,472,431  are  due  as  follows:

<TABLE>
<CAPTION>

<S>                                 <C>    <C>
  For the year ending December 31,   2001  $  491,543
                                     2002     412,079
                                     2003     372,749
                                     2004     196,060
                                           ----------

 .                                   Total  $1,472,431
                                           ==========
</TABLE>



     Lease  payments  for  the  sales-type lease are due monthly and the related
revenue  is  recognized  by  a method which produces a constant periodic rate of
return  on  the  outstanding  investment  in  the  lease.  Future  minimum lease
payments  for  the  sales-type  lease  of  $255,407  are  due in the year ending
December  31,  2001.

     Revenue  from  major  individual lessees which accounted for 10% or more of
lease  revenue  during  the  years  ended December 31, 2000, 1999 and 1998 is as
follows:
<TABLE>
<CAPTION>

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

Finnair OY. . . . . . . . . . .  $346,949  $634,658  $639,923
Aerovias de Mexico S.A. de C.V.  $ 92,311  $     --  $     --
Transmeridian Airlines, Inc.. .  $ 70,000  $560,000  $876,667
Southwest Airlines, Inc.. . . .  $     --  $380,699  $377,568
American Trans Air, Inc.. . . .  $     --  $245,533  $762,000
Classic Airways Limited . . . .  $     --  $     --  $319,960
</TABLE>



Use  of  Estimates
------------------

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

Equipment  on  Lease
--------------------

     All  aircraft  were  acquired from EFG or one of its Affiliates.  Equipment
Cost  means  the  actual  cost  paid by the Partnership to acquire the aircraft,
including  acquisition  fees.  Equipment cost reflects the actual price paid for
the  aircraft  by  EFG or the Affiliate plus all actual costs incurred by EFG or
the  Affiliate while carrying the aircraft less the amount of all rents received
by  EFG  or  the  Affiliate  prior  to  selling  the  aircraft.

Depreciation
------------

     The  Partnership's  depreciation policy is intended to allocate the cost of
aircraft  over  the  period  during  which  they  produce economic benefit.  The
principal  period  of  economic  benefit  is  considered  to  correspond to each
aircraft's  primary  lease  term,  which term generally represents the period of
greatest  revenue  potential for each aircraft.  Accordingly, to the extent that
an  aircraft  is  held  on  primary  lease term, the Partnership depreciates the
difference  between (i) the cost of the aircraft and (ii) the estimated residual
value  of the aircraft on a straight-line basis over such term.  For purposes of
this policy, estimated residual values represent estimates of aircraft values at
the  date  of  primary lease expiration.  To the extent that an aircraft is held
beyond  its  primary  lease  term,  the  Partnership continues to depreciate the
remaining  net  book  value  of  the  aircraft on a straight-line basis over the
aircraft's remaining economic life.  Periodically, the General Partner evaluates
the  net  carrying  value of equipment to determine whether it exceeds estimated
net realizable value.  Adjustments to reduce the net carrying value of equipment
are  recorded  in  those  instances  where  estimated  net  realizable  value is
considered  to  be  less  than  net  carrying  value.

     The  ultimate  realization  of  residual  value for any type of aircraft is
dependent  upon  many  factors,  including  EFG's  ability  to sell and re-lease
aircraft.  Changing  market conditions, industry trends, technological advances,
and  many  other  events can converge to enhance or detract from asset values at
any  given  time.

Remarketing  and  Maintenance  Expenses
---------------------------------------

     The  Partnership  expenses  storage  and  remarketing costs associated with
aircraft  and  other  equipment  under  lease  as  incurred.

     Generally,  the  costs  of  scheduled  inspections  and repairs and routine
maintenance  for aircraft and other equipment under lease are the responsibility
of  the  lessee.  For  aircraft  under lease, scheduled airframe inspections and
repairs,  such as "D checks", are generally the responsibility of the lessee. In
certain  situations,  the  Partnership  may  be  responsible for reimbursing the
lessee  for  a  portion of such costs paid by the lessee prior to the redelivery
date  (i.e.,  the  expiration  of  the lease term) or may be entitled to receive
additional  payments from the lessee based on the terms and conditions set forth
in the lease arrangement which considers, among other things, the amount of time
remaining  until  the next scheduled maintenance event.  The Partnership records
the  amount  payable  or  receivable,  with  a corresponding charge or credit to
operations.

Allowance  for  Loan  Losses
----------------------------

          In  accordance  with  Statement  of Financial Accounting Standards No.
114,  "Accounting  by  Creditors for Impairment of a Loan" ("SFAS No. 114"), the
Partnership  periodically evaluates the collectibility of its loan's contractual
principal  and  interest  and  the  existence  of  loan  impairment  indicators,
including contemporaneous economic conditions, situations which could affect the
borrower's  ability  to  repay  its  obligation,  the  estimated  value  of  the
underlying  collateral,  and  other  relevant  factors.  Real  estate values are
discounted  using  a  present  value  methodology  over  the  period between the
financial reporting date and the estimated disposition date of each property.  A
loan is considered to be impaired when, based on current information and events,
it  is  probable  that the Partnership will be unable to collect all amounts due
according  to  the  contractual terms of the loan agreement, which includes both
principal  and  interest.  A  provision  for  loan losses is charged to earnings
based on the judgment of the Partnership's management of the amount necessary to
maintain  the  allowance  for loan losses at a level adequate to absorb probable
losses.

Net  Investment  in  Sales-Type  Lease
--------------------------------------
     For  leases  that  qualify as sales-type leases, the Partnership recognizes
profit  or  loss at lease inception to the extent the fair value of the property
leased  differs  from  the  carrying  value.  For  balance  sheet  purposes, the
aggregate  lease  payments  receivable  are recorded on the balance sheet net of
unearned  income  as  net  investment  in  sales-type lease.  Unearned income is
recognized  as  sales-type  lease revenue over the lease term using the interest
method.

Impairment  of  Long-Lived  Assets
----------------------------------
     The  carrying  value of long-lived assets, including equipment and the real
estate  loan,  will  be  reviewed  for  impairment whenever events or changes in
circumstances  indicate  that  the  recorded  value  cannot  be  recovered  from
undiscounted  future  cash  flows.
Accrued  Liabilities  -  Affiliate
----------------------------------

     Unpaid  operating  expenses  paid  by  EFG on behalf of the Partnership and
accrued  but  unpaid  administrative charges and management fees are reported as
Accrued  Liabilities  -  Affiliate  (see  Note  7).

Contingencies
-------------

     It  is  the  Partnership's  policy  to  recognize a liability for goods and
services  during  the  period  when  the goods or services are received.  To the
extent  that  the  Partnership  has  a contingent liability, meaning generally a
liability  the payment of which is subject to the outcome of a future event, the
Partnership  recognizes  a  liability  in accordance with Statement of Financial
Accounting  Standards No. 5 "Accounting for Contingencies" ("SFAS No. 5").  SFAS
No.  5  requires  the  recognition  of contingent liabilities when the amount of
liability  can  be  reasonably  estimated  and  the  liability  is  probable.

     The Partnership is a Nominal Defendant in a Class Action Lawsuit.  In 1998,
a settlement proposal to resolve that litigation was negotiated.  After a status
conference,  on  June  4,  2001  the court set a trial date of March 4, 2002 and
referred  the  case  to  mediation  and to a magistrate judge (See Note 10). The
Defendant's  and  Plaintiff's  Counsel  have  continued  to  negotiate  toward a
settlement  and  have  reached agreement as to its principal business terms.  As
part  of  the  settlement,  EFG has agreed to buy the loans made by the Exchange
Partnerships  to  Echelon  Residential  Holdings for an aggregate of $32 million
plus  interest  at  7.5%  per annum, if they are not repaid prior to or at their
scheduled  maturity  date.  Upon  completion of a stipulation of settlement, the
parties will submit the settlement to the court for approval.  The Partnership's
estimated  exposure  for  costs  anticipated  to  be  incurred  in  pursuing the
settlement  proposal  is  approximately $423,000 consisting principally of legal
fees  and  other  professional  service  costs.  These  costs are expected to be
incurred  regardless  of  whether the proposed settlement ultimately is effected
and,  therefore,  the Partnership expensed approximately $332,000 of these costs
in  1998  following  the  Court's  approval  of  the  settlement plan.  The cost
estimate is subject to change and is monitored by the General Partner based upon
the  progress  of  the litigation and other pertinent information.  As a result,
the Partnership accrued and expensed additional amounts of approximately $41,000
and  $50,000  for such costs during 2000 and 1999, respectively. See notes 9 and
11  for  additional  discussions.

     The  Investment Company Act of 1940 (the "1940 Act") places restrictions on
the  capital  structure  and  business  activities  of  companies  registered
thereunder.  The  Partnership  has  active  business operations in the financial
services  industry, including equipment leasing, the loan to Echelon Residential
Holdings  and  its  ownership of securities of Semele.  The Partnership does not
intend to engage in investment activities in a manner or to an extent that would
require the Partnership to register as an investment company under the 1940 Act.
However,  it  is  possible that the Partnership may unintentionally engage in an
activity  or  activities  that  may be construed to fall within the scope of the
1940  Act.  The  General Partner is engaged in discussions with the staff of the
Securities  and  Exchange  Commission  ("SEC")  regarding  whether  or  not  the
Partnership  may  be  an  inadvertent investment company as a consequence of the
above-referenced  loan. If the Partnership were determined to be an unregistered
investment company, its business would be adversely affected.The 1940 Act, among
other  things,  prohibits  an  unregistered  investment  company  from  offering
securities  for  sale  or  engaging  in any business in interstate commerce and,
consequently,  leases  and  contracts  entered  into  by  partnerships  that are
unregistered  investment  companies  may  be  voidable.  The General Partner has
consulted  counsel  and  believes  that  the  Partnership  is  not an investment
company.  The  General  Partner  has  determined  to  take action to resolve the
Partnership's  status  under the 1940 Act by means that may include disposing or
acquiring  certain  assets  that  it  might  not  otherwise  dispose or acquire.

Allocation  of  Profits  and  Losses
------------------------------------

     For  financial  statement purposes, net income or loss is allocated to each
Partner  according  to  their  respective  ownership  percentages  (95%  to  the
Recognized  Owners  and  5%  to  the  General  Partner).  See  Note 9 concerning
allocation  of  income  or  loss  for  income  tax  purposes.

Net  Income  (Loss)  Per  Unit
------------------------------

     Net  income  (loss) per unit is based on 2,714,647 Units outstanding during
each of the three years in the period ended December 31, 2000 and computed after
allocation  of  the  General  Partner's  5%  share  of  net  income  (loss).

Provision  for  Income  Taxes
-----------------------------

     No  provision  or benefit from income taxes is included in the accompanying
financial  statements.  The  Partners  are  responsible  for  reporting  their
proportionate  shares  of the Partnership's taxable income or loss and other tax
attributes  on  their  separate  tax  returns.

NOTE  4  -  EQUIPMENT
---------------------

     The  following  is  a  summary  of  equipment  owned  by the Partnership at
December 31, 2000.  Remaining Lease Term (Months), as used below, represents the
number  of months remaining from December 31, 2000 under contracted lease terms.
A  remaining  lease  term  equal  to  zero  reflects  equipment held for sale or
re-lease  in  the  opinion of EFG, the acquisition cost of the equipment did not
exceed  its  fair  market  value.
<TABLE>
<CAPTION>

<S>                                             <C>          <C>          <C>
 .                                               Remaining
 .                                               Lease Term   Equipment
 Equipment Type                                    (Months)  at Cost      Location
----------------------------------------------  -----------  -----------  ---------

Two Rolls Royce aircraft engines                          0  $ 6,000,000  Warehouse
One McDonnell Douglas MD-82 (Finnair)                     4    2,078,640  Foreign
One McDonnell Douglas MD-82
(Aerovias de Mexico S.A. de C.V)                         44    2,078,640  Foreign
One Boeing 737-2H4 (Air Slovakia)                        32      639,834  Foreign
                                                             -----------
   Total equipment cost. . . . . . . . . . . .            -   10,797,114
   Accumulated depreciation        .                      -    8,152,945
                                                             -----------
   Equipment, net of accumulated depreciation             -  $ 2,644,169
                                                             ===========
</TABLE>



     The  cost  of  each  of the Partnership's aircraft represents proportionate
ownership  interests.  The  remaining  interests  are  owned by other affiliated
partnerships  sponsored  by  EFG.  All  Partnerships  individually  report,  in
proportion  to  their respective ownership interests, their respective shares of
assets,  liabilities,  revenues,  and  expenses  associated  with  the aircraft.

     Certain of the Partnership's aircraft and the related lease payment streams
were  used  to secure the Partnership's term loans with third-party lenders. The
preceding summary includes leveraged equipment having an aggregate original cost
of  approximately $4,157,000 and a net book value of approximately $2,446,000 at
December  31,  2000.  (See  Note  8).

     The  Partnership  entered  into  a  three-year  release  agreement with Air
Slovakia  for its proportionate interest in a Boeing 737-2H4 aircraft, effective
September 2000.  Under the terms of this agreement, the Partnership will receive
rents  of  approximately  $350,000  over  the term of the lease. The Partnership
entered  into  a  four-year  re-lease agreement with Aerovias de Mexico, S.A. de
C.V.  for  its  proportionate  interest  in  a McDonnell Douglas MD-82 aircraft,
effective  September  2000.  Under  the terms of this agreement, the Partnership
will  receive  rents  of  approximately  $1,176,000  over the term of the lease.

     Generally,  the  costs  associated with maintaining, insuring and operating
the  Partnership's  aircraft  are incurred by the respective lessees pursuant to
terms  specified  in  their  individual  lease  agreements with the Partnership.
However, the Partnership has purchased supplemental insurance coverage to reduce
the economic risk arising from certain losses.  Specifically, the Partnership is
insured  under  supplemental  policies  for  "Aircraft Hull Total Loss Only" and
"Aircraft  Hull  Total  Loss  Only  War  and  Other  Perils."

     As  aircraft  are  sold  to  third  parties,  or otherwise disposed of, the
Partnership  recognizes  a  gain or loss equal to the difference between the net
book  value  of the aircraft at the time of sale or disposition and the proceeds
realized  upon  sale  or  disposition.  The  ultimate  realization  of estimated
residual  value  in  the  aircraft  is dependent upon, among other things, EFG's
ability  to  maximize  proceeds  from  selling  or  re-leasing  the aircraft. At
December  31, 2000, all of the Partnership's aircraft were subject to contracted
lease  agreements,  except  the  Rolls  Royce  aircraft  engines,  which  were
warehoused.  The  General  Partner  is  attempting  to  remarket  these engines.

NOTE  5  -  LOAN  RECEIVABLE
----------------------------
     On  March  8,  2000,  the  Partnership  and 10 affiliated partnerships (the
''Exchange  Partnerships'')  collectively  loaned  $32  million  to  Echelon
Residential  Holdings,  a  newly formed real estate company. Echelon Residential
Holdings is owned by several investors, including James A. Coyne, Executive Vice
President  of  EFG.  In addition, certain affiliates of the General Partner made
loans  to  Echelon Residential Holdings in their individual capacities.  Echelon
Residential  Holdings,  through its wholly-owned subsidiary (Echelon Residential
LLC),  used  the  loan  proceeds,  along  with  the loan proceeds from the other
Exchange  Partnerships,  to  acquire  various  real  estate  assets from Echelon
International  Corporation,  an  unrelated  Florida-based  real  estate company.
In  the  Class  Action Lawsuit, there is a risk that the court may object to the
General  Partner's  action  in  structuring  the  loan in this way since the EFG
officer may be deemed an affiliate and the loans in violation of the prohibition
against  loans  to  affiliates and the court's statement in its order permitting
New  Investments  that  all  other  provisions  of  the  Partnership  Agreements
governing the investment objectives and policies of the Partnership shall remain
in full force and effect.  The court may require the partnerships to restructure
or  divest  the  loan.
     The  Partnership's  participation  in  the  loan  is  $3,640,000.  Echelon
Residential  Holdings,  through  a  wholly-owned subsidiary (Echelon Residential
LLC),  used the loan proceeds to acquire various real estate assets from Echelon
International  Corporation,  a Florida-based real estate company. The loan has a
term of 30 months, maturing on September 8, 2002, and an annual interest rate of
14%  for  the first 24 months and 18% for the final six months. Interest accrues
and  compounds  monthly  and  is  payable  at  maturity.  During  the year ended
December  31,  2000,  the  Partnership  recognized  $446,086  of interest income
related  to  this loan.  In connection with the transaction, Echelon Residential
Holdings has pledged a security interest in all of its right, title and interest
in  and  to  its membership interests in Echelon Residential LLC to the Exchange
Partnerships  as  collateral.  Echelon  Residential  Holdings  has  no  material
business  interests  other  than those connected with the real estate properties
owned  by  Echelon  Residential  LLC.
     The summarized financial information for Echelon Residential Holdings as of
December  31, 2000 and for the period March 8, 2000 (commencement of operations)
through  December  31,  2000  is  as  follows:
<TABLE>
<CAPTION>

<S>                                      <C>
 Total assets  .. . . . . . . . . . . .  $68,580,891
 Total liabilities  . . . . . . . . . .  $70,183,162
 Minority interest  . . . . . . . . . .  $ 2,257,367
 Total deficit   .. . . . . . . . . . .  $(3,859,638)

 Total revenues  .. . . . . . . . . . .  $ 5,230,212
 Total expenses, minority interest
   and equity in loss of unconsolidated
   joint venture. . . . . . . . . . . .  $11,936,238
 Net loss  .. . . . . . . . . . . . . .  $(6,706,026)
</TABLE>



     See Note 12, Subsequent Events, for discussion of an impairment recorded by
the  Partnership  of  the loan receivable and related interest receivable during
the  second  quarter  of  2001.


NOTE  6  -  NET  INVESTMENT  IN  SALES-TYPE  LEASE
--------------------------------------------------

The  Partnership's  net  investment  in  a sales-type lease is the result of the
conditional  sale  of  the  Partnership's proportionate interest in a Boeing 737
aircraft  executed in October 2000. The title to the aircraft transfers to Royal
Aviation  Inc.,  at  the expiration of the lease term.  The sale of the aircraft
has  been  recorded  by the Partnership as a sales-type lease, with a lease term
expiring in January 2002.  For the year ended December 31, 2000, the Partnership
recorded  a  net gain on sale of equipment, for financial statement purposes, of
$91,471  for  the  Partnership's  proportional  interest  in  the  aircraft  and
recognized  sales-type  lease revenue of $2,491. The net book value of equipment
sold  on  sales-type  lease  totaled $296,767, which was a non-cash transaction.
The  components  of  the  net investment in the sales-type lease are as follows:
<TABLE>
<CAPTION>

<S>                                          <C>
Total minimum lease payments to be received  $255,407
Less:  Unearned income. . . . . . . . . . .    15,077
                                             --------
                         Total               $240,330
                                             ========
</TABLE>



NOTE  7  -  RELATED  PARTY  TRANSACTIONS
----------------------------------------

     All  operating  expenses  incurred  by  the  Partnership are paid by EFG on
behalf  of  the  Partnership  and  EFG is reimbursed at its actual cost for such
expenditures.  Fees  and  other costs incurred during each of the three years in
the  period  ended  December  31,  2000,  which  were  paid  or  accrued  by the
Partnership  to  EFG  or  its  Affiliates,  are  as  follows:
<TABLE>
<CAPTION>

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

Equipment management fees . . .  $   29,913  $   92,059  $  156,535
Administrative charges. . . . .      72,967      71,699      53,676
Reimbursable operating expenses
 due to third parties . . . . .     988,461   1,987,647   1,762,271
                                 ----------  ----------  ----------

 Total. . . . . . . . . . . . .  $1,091,341  $2,151,405  $1,972,482
                                 ==========  ==========  ==========
</TABLE>



     As provided under the terms of the Management Agreement, EFG is compensated
for  its  services  to  the  Partnership.  Such services include acquisition and
management  of  equipment.  For  acquisition services, EFG was compensated by an
amount  equal  to  3.07%  of  Equipment Base Price paid by the Partnership.  For
management  services,  EFG  is  compensated  by  an  amount equal to 5% of gross
operating  lease rental revenue and 2% of gross full payout lease rental revenue
received  by  the Partnership.  Both acquisition and management fees are subject
to  certain  limitations  defined  in  the  Management  Agreement.

     Administrative  charges  represent amounts owed to EFG, pursuant to Section
10.4  of  Restated  Agreement,  as  amended, for persons employed by EFG who are
engaged  in  providing  administrative services to the Partnership. Reimbursable
operating expenses due to third parties represent costs paid by EFG on behalf of
the  Partnership  which  are  reimbursed  to  EFG  at  actual  cost.

     All  aircraft  were  purchased  from  EFG  or  one  of its Affiliates.  The
Partnership's acquisition cost was determined by the method described in Note 3,
Equipment  on  Lease.

     All  rents and the proceeds from the sale of equipment are paid directly to
either  EFG  or  to  a  lender.  EFG  temporarily  deposits collected funds in a
separate interest-bearing escrow account prior to remittance to the Partnership.
At December 31, 2000, the Partnership was owed $33,452 by EFG for such funds and
the  interest  thereon.  These funds were remitted to the Partnership in January
2001.

     An  affiliate  of  the  General  Partner  owns  Units in the Partnership as
follows:
<TABLE>
<CAPTION>

<S>                                    <C>          <C>
                                       Number of    Percent of Total
Affiliate                              Units Owned  Outstanding Units

Old North Capital Limited Partnership       40,000               1.47%
-------------------------------------  -----------  ------------------
</TABLE>


     Old  North  Capital  Limited Partnership ("ONC") is a Massachusetts limited
partnership  formed in 1995. The general partner of ONC is controlled by Gary D.
Engle  and  the  limited  partnership interests of ONC are owned by Semele Group
Inc.  ("Semele").  Gary  D.  Engle  is  Chairman  and Chief Executive Officer of
Semele.

NOTE  8  -  NOTES  PAYABLE
--------------------------

     Notes  payable  at  December  31,  2000  consisted of two installment notes
payable  to  banks of $906,869.   One installment note bears an interest rate of
8.225%  and  the  other  bears  a  fluctuating  interest  rate  based  on  LIBOR
(approximately 6.7% at December 31, 2000) plus a margin. Both of the installment
notes are non-recourse and are collateralized by the equipment and assignment of
the  related  lease  payments.  The Partnership had a balloon payment obligation
due  at  the  expiration  of  the  lease  term related to the aircraft leased to
Finnair  OY.  This  indebtedness  was  due  to mature in 2001.  In addition, the
Partnership  had  a  balloon  payment  obligation  of $701,062, which matured in
August 2000. The Partnership paid interest-only on this debt through 2000 and in
February  2001,  the  Partnership  and  certain  affiliated  investment programs
refinanced this indebtedness and  repaid the outstanding indebtedness related to
the  Finnair  OY  aircraft.  See  Note  12,  "Subsequent  Event", regarding this
refinancing.

     Management  believes that the carrying amount of notes payable approximates
fair value at December 31, 2000 based on its experience and understanding of the
market  for  instruments  with  similar  terms.

     The  annual  maturities  of  the  installment notes payable at December 31,
2000, reflecting the maturity of the notes in consideration of the February 2001
refinancing  discussed  in  Note  12,  "Subsequent  Event",  are  as  follows:
<TABLE>
<CAPTION>

<S>                                 <C>    <C>
  For the year ending December 31,   2001  $109,728
                                     2002   143,640
                                     2003   143,640
                                     2004   511,861
                                           --------

 .                                   Total  $906,869
                                           ========
</TABLE>


NOTE  9  -  INCOME  TAXES
-------------------------

     The  Partnership  is  not a taxable entity for federal income tax purposes.
Accordingly,  no provision for income taxes has been recorded in the accounts of
the  Partnership.

     For  financial  statement purposes, the Partnership allocates net income or
loss  to  each  class  of  partner  according  to  their  respective  ownership
percentages  (95% to the Recognized Owners and 5% to the General Partner).  This
convention  differs  from  the income or loss allocation requirements for income
tax  and  Dissolution Event purposes as delineated in the Restated Agreement, as
amended.  For  income  tax  reporting  purposes,  the  Partnership allocates net
income  or  loss  in accordance with such agreement.  The Restated Agreement, as
amended,  requires that upon dissolution of the Partnership, the General Partner
will  be  required  to  contribute  to  the  Partnership  an amount equal to any
negative  balance  which may exist in the General Partner's tax capital account.
At  December  31,  2000,  the General Partner had a positive tax capital account
balance.

     The  following  is  a reconciliation between net income (loss) reported for
financial  statement  and  federal  income  tax reporting purposes for the years
ended  December  31,  2000,  1999  and  1998:
<TABLE>
<CAPTION>

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

Net income (loss) . . . . . . . . . . . . .  $  898,601   $1,892,009  $(1,208,085)
  Financial statement depreciation in
    excess of (less than) tax depreciation      (56,850)     673,872     (713,082)
  Deferred rental income. . . . . . . . . .     (24,136)       3,383     (119,070)
  Other . . . . . . . . . . . . . . . . . .     318,871       64,000      362,435
                                             -----------  ----------  ------------
Net income (loss) for federal income
    tax reporting purposes. . . . . . . . .  $1,136,486   $2,633,264  $(1,677,802)
                                             ===========  ==========  ============
</TABLE>


     The  principal  component of "Other" consists of the difference between the
--------------------------------------------------------------------------------
tax  gain or loss on aircraft disposals and the financial statement gain or loss
--------------------------------------------------------------------------------
on  aircraft  disposals.  It  also  includes  reversal  of  certain  maintenance
--------------------------------------------------------------------------------
reserves.
---------

     The  following  is  a reconciliation between partners' capital reported for
--------------------------------------------------------------------------------
financial  statement  and  federal  income  tax reporting purposes for the years
--------------------------------------------------------------------------------
ended  December  31,  2000  and  1999:
--------------------------------------

<TABLE>
<CAPTION>

<S>                                                           <C>          <C>
                                                                     2000         1999
                                                              -----------  ------------

Partners' capital. . . . . . . . . . . . . . . . . . . . . .  $ 7,700,277  $ 7,524,051

 Add back selling commissions and organization
 and offering costs. . . . . . . . . . . . . . . . . . . . .    7,085,240    7,085,240

 Cumulative difference between federal income tax
 and financial statement income (loss) . . . . . . . . . . .       23,142     (937,118)
                                                              -----------  ------------

Partners' capital for federal income tax reporting purposes.  $14,808,659  $13,672,173
                                                              ===========  ============
</TABLE>


     The  cumulative  difference  between  federal  income  tax  and  financial
-------------------------------------------------------------------------------
statement  income  (loss)  represents  a  timing  difference.
-------------------------------------------------------------

NOTE  10  -  LEGAL  PROCEEDINGS
-------------------------------

     In  January  1998,  certain plaintiffs (the "Plaintiffs") filed a class and
derivative  action, captioned Leonard Rosenblum, et al. v. Equis Financial Group
                              --------------------------------------------------
Limited  Partnership,  et  al.,  in  the  United  States  District Court for the
-----------------------------
Southern  District  of  Florida  (the  "Court") on behalf of a proposed class of
-------
investors  in  28  equipment  leasing  programs  sponsored by EFG, including the
----
Partnership  (collectively,  the "Nominal Defendants"), against EFG and a number
----
of  its  affiliates, including the General Partner, as defendants (collectively,
the  "Defendants").  Certain  of  the Plaintiffs, on or about June 24, 1997, had
filed an earlier derivative action, captioned Leonard Rosenblum, et al. v. Equis
-                                             ----------------------------------
Financial  Group  Limited  Partnership,  et  al.,  in  the Superior Court of the
-----------------------------------------------
Commonwealth  of  Massachusetts  on behalf of the Nominal Defendants against the
------
Defendants.  Both  actions  are  referred  to  herein collectively as the "Class
--
Action  Lawsuit".
--

     The  Plaintiffs  have  asserted,  among  other  things,  claims against the
Defendants  on behalf of the Nominal Defendants for violations of the Securities
Exchange  Act of 1934, common law fraud, breach of contract, breach of fiduciary
duty,  and violations of the partnership or trust agreements that govern each of
the  Nominal Defendants.  The Defendants have denied, and continue to deny, that
any  of  them  have  committed  or threatened to commit any violations of law or
breached  any  fiduciary  duties  to  the  Plaintiffs or the Nominal Defendants.

     On  July 16, 1998, counsel for the Defendants and the Plaintiffs executed a
Stipulation  of Settlement setting forth terms pursuant to which a settlement of
the  Class  Action  Lawsuit  was  intended to be achieved and which, among other
things, was at the time expected to reduce the burdens and expenses attendant to
continuing litigation.  The Stipulation of Settlement was preliminarily approved
by  the  Court on August 20, 1998 when the Court issued its "Order Preliminarily
Approving  Settlement,  Conditionally  Certifying Settlement Class and Providing
for Notice of, and Hearing on, the Proposed Settlement" (the "August 20 Order").

     On  March  12,  1999, counsel for the Plaintiffs and the Defendants entered
into  an amended stipulation of settlement (the "Amended Stipulation") which was
filed  with  the  Court  on  March  12,  1999.  The  Amended  Stipulation  was
preliminarily  approved  by  the  Court  by  its  "Modified  Order Preliminarily
Approving  Settlement,  Conditionally  Certifying Settlement Class and Providing
For  Notice  of,  and  Hearing On, the Proposed Settlement" dated March 22, 1999
(the  "March  22  Order").  The Amended Stipulation, among other things, divided
the  Class  Action  Lawsuit  into two separate sub-classes that could be settled
individually.  On  May  26,  1999,  the Court issued an Order and Final Judgment
approving  settlement  of  one  of  the  sub-classes.  Settlement  of the second
sub-class,  involving  the  Partnership  and  10  affiliated  partnerships
(collectively referred to as the "Exchange Partnerships"), remained pending due,
in  part, to the complexity of the proposed settlement pertaining to this class.

     In  February  2000,  counsel  for the Plaintiffs and the Defendants entered
into  a  second  amended  stipulation  of  settlement  (the  "Second  Amended
Stipulation")  which  modified  certain of the settlement terms contained in the
Amended  Stipulation.  The Second Amended Stipulation was preliminarily approved
by  the  Court by its "Second Modified Order Preliminarily Approving Settlement,
Conditionally  Certifying  Settlement  Class  and  Providing  For Notice of, and
Hearing  On,  the  Proposed  Settlement"  dated  March  6, 2000 (the "March 2000
Order").  Prior  to issuing a final order approving the settlement of the second
sub-class involving the Partnership, the Court will hold a fairness hearing that
will  be  open  to  all interested parties and permit any party to object to the
settlement.  The  investors of the Partnership and all other plaintiff sub-class
members  will  receive a Notice of Settlement and other information pertinent to
the  settlement  of  their  claims that will be mailed to them in advance of the
fairness  hearing.

     The settlement of the second sub-class was premised on the consolidation of
the  Exchange Partnerships' net assets (the "Consolidation"), subject to certain
conditions,  into  a  single  successor  company  ("Newco").  Under the proposed
Consolidation,  the  partners  of  the  Exchange Partnerships would receive both
common  stock  in  Newco  and  a  cash  distribution; and thereupon the Exchange
Partnerships  would  be  dissolved.  In  addition,  EFG would contribute certain
management  contracts, operations personnel, and business opportunities to Newco
and  cancel  its  current  management  contracts  with  all  of  the  Exchange
Partnerships.  Newco  would  operate  principally as a finance company and would
use its best efforts to list its shares on the NASDAQ National Market or another
national  exchange or market as soon after the Consolidation as Newco deems that
market  conditions  and  its  business  operations  are suitable for listing its
shares  and  Newco  has  satisfied  all  necessary  regulatory  and  listing
requirements.  The  potential benefits and risks of the Consolidation were to be
presented  in  a  Solicitation  Statement  that  would  be  mailed to all of the
partners  of  the  Exchange  Partnerships  as  soon as the associated regulatory
review process was completed and at least 60 days prior to the fairness hearing.
A  preliminary Solicitation Statement was filed with the Securities and Exchange
Commission  on  August  24,  1998.

     One  of  the  principal  objectives  of  the  Consolidation was to create a
company  that would have the potential to generate more value for the benefit of
existing  limited  partners  than  other  alternatives, including continuing the
Partnership's customary business operations until all of its assets are disposed
in  the  ordinary  course  of  business.  To  facilitate the realization of this
objective, the Amended Stipulation provided, among other things, that commencing
March 22, 1999, the Exchange Partnerships could collectively invest up to 40% of
the  total aggregate net asset values of all of the Exchange Partnerships in any
investment,  including  additional  equipment and other business activities that
the general partners of the Exchange Partnerships and EFG reasonably believed to
be  consistent  with the anticipated business interests and objectives of Newco,
subject  to  certain  limitations.  The  Second Amended Stipulation, among other
things, quantified the 40% limitation using a whole dollar amount of $32 million
in  the  aggregate.

     On March 8, 2000, the Exchange Partnerships collectively made a $32 million
loan  as permitted by the Second Amended Stipulation approved by the Court.  The
Partnership's portion of the aggregate loan is $3,640,000.  The loan consists of
a  term loan to Echelon Residential Holdings, a newly-formed real estate company
that  is owned by several independent investors and, in his individual capacity,
James A. Coyne, Executive Vice President of EFG. In addition, certain affiliates
of  the  General  Partner  made  loans  to Echelon Residential Holdings in their
individual  capacities.  Echelon  Residential  Holdings,  through a wholly owned
subsidiary  (Echelon  Residential  LLC),  used the loan proceeds, along with the
loan proceeds from similar loans by ten affiliated partnerships representing $32
million  in  the  aggregate,  to acquire various real estate assets from Echelon
International  Corporation, an unrelated Florida-based real estate company.  The
loan has a term of 30 months maturing on September 8, 2002 and bears interest at
the  annual rate of 14% for the first 24 months and 18% for the final six months
of  the  term.  Interest  accrues and compounds monthly but is not payable until
maturity.  Echelon  Residential Holdings has pledged its membership interests in
Echelon Residential LLC to the Exchange Partnerships as collateral for the loan.

     In  the  absence  of the Court's authorization to enter into new investment
activities,  the  Partnership's Restated Agreement, as amended, would not permit
such  activities  without  the approval of limited partners owning a majority of
the  Partnership's  outstanding Units.  Consistent with the Amended Stipulation,
the  Second  Amended Stipulation provides terms for unwinding any new investment
transactions  in  the  event  that  the  Consolidation  is  not  effected or the
Partnership  objects  to  its  participation  in  the  Consolidation.

     The  Second Amended Stipulation, as well as the Amended Stipulation and the
original  Stipulation  of  Settlement, prescribe certain conditions necessary to
effect  a  final  settlement,  including  providing the partners of the Exchange
Partnerships  with  the  opportunity  to  object  to  the participation of their
partnership  in  the  Consolidation.  Assuming  the  proposed  settlement  were
effected  according  to  its  terms,  the  Partnership's share of legal fees and
expenses related to the Class Action Lawsuit and the Consolidation was estimated
to  be  approximately  $423,000, of which approximately $332,000 was accrued and
expensed  by  the  Partnership  in  1998 and additional amounts of approximately
$41,000  and  $50,000  was  accrued and expensed in 2000 and 1999, respectively.

     While the Court's August 20 Order enjoined certain class members, including
all  of  the partners of the Partnership, from transferring, selling, assigning,
giving, pledging, hypothecating, or otherwise disposing of any Units pending the
Court's  final  determination  of whether the settlement should be approved, the
March  22 Order permitted the partners to transfer Units to family members or as
a result of the divorce, disability or death of the partner.  No other transfers
are  permitted pending the Court's final determination of whether the settlement
should  be  approved.  The  provision  of the August 20 Order which enjoined the
General  Partners  of  the  Exchange  Partnerships  from,  among  other  things,
recording  any  transfers  not  in  accordance  with  the  Court's order remains
effective.

     On  March 12, 2001, after a status conference and hearing, the Court issued
an  order  that  required the parties, no later than May 15, 2001, to advise the
Court  on  (a)  whether  the  SEC  has  completed its review of the solicitation
statement  and  related  materials  submitted  to the SEC in connection with the
proposed  settlement,  and  (b)  whether parties request the Court to schedule a
hearing  for  final  approval  of the proposed settlement or are withdrawing the
proposed  settlement  from judicial consideration and resuming the litigation of
the  Plaintiffs'  claims.  The Court also directed the parties to use their best
efforts  to  assist the SEC so that its regulatory review may be completed on or
before  May 15, 2001.  The Court continued the Final Approval Settlement Hearing
until  a  date  to be scheduled in July 2001 after receipt from the parties of a
request to schedule a hearing.  Subsequently, after the parties had responded to
the  court's  order and had participated in a status conference on May 31, 2001,
the court issued an order on June 4, 2001 setting a trial date of March 4, 2002,
referring  the  case to mediation and referring discovery to a magistrate judge.
The  Defendant's  and  Plaintiff's  Counsel have continued to negotiate toward a
settlement  and  have  reached agreement as to its principal business terms.  As
part  of  the  settlement,  EFG has agreed to buy the loans made by the Exchange
Partnerships  to  Echelon  Residential  Holdings for an aggregate of $32 million
plus  interest  at  7.5%  per annum, if they are not repaid prior to or at their
scheduled  maturity  date.  Upon  completion of a stipulation of settlement, the
parties  will  submit  the  settlement  to the court for approval.  See Note 12,
Subsequent  Events,  for  an  update  of  the  status  of  proceedings.

     In  addition to the foregoing, the Partnership is a party to other lawsuits
that  have  arisen  out  of  the  conduct of its business, principally involving
disputes  or  disagreements  with  lessees  over  lease  terms and conditions as
described  below:

First  action  involving  Transmeridian  Airlines
-------------------------------------------------

     On  October  11,  1996,  Prime  Air  Inc. d/b/a Transmeridian Airlines (the
"Plaintiff")  filed  an  action  in  the  61st Judicial District Court of Harris
County,  Texas  (the  "Court")  entitled  Prime  Air,  Inc.  d/b/a Transmeridian
                                          --------------------------------------
Airlines  v.  Investors  Asset Holding Corp. ("IAHC"), as Trustee for Airfund II
       -------------------------------------------------------------------------
International  Limited  Partnership,  PLM  International  ("PLM"),  and  NavCom
  -----------------------------------------------------------------------------
Aviation,  Inc. (collectively, the "Defendants").  In that action, the Plaintiff
  ------------
claimed  damages  of more than $3 million for alleged breach of contract, fraud,
civil  conspiracy,  tortious  interference  of  business  relations,  negligent
misrepresentation, negligence and gross negligence, and punitive damages against
the  Defendants in connection with Transmeridian's lease of a Boeing 727-251 ADV
jet  aircraft from the Partnership.  On November 7, 1996, PLM removed the action
to United States District Court for the Southern District of Texas.  On February
14,  1997,  the  Defendants  answered  the  Plaintiff's  Complaint  denying  the
allegations  made  therein  and  asserting  various  defenses.

     On  July  31,  1998,  the Court granted IAHC's motion to strike Plaintiff's
fraud  and  negligent  misrepresentation  claims  due  to  failure to plead with
particularity.  Extensive  discovery  was conducted on the merits of Plaintiff's
claims.  The  Plaintiff,  at  one  point,  provided  an  expert  report  seeking
approximately  $30  million  in damages.  The Plaintiff later provided a revised
expert  report  claiming  actual  damages  of  approximately  $8.5  million  and
Plaintiff  continued  to  seek  punitive  damages  and  both  pre-judgment  and
post-judgment  interest.  On  March 18, 1999, the Court entered summary judgment
in  favor  of  IAHC and PLM on all remaining claims.  The Plaintiff subsequently
filed a motion to alter or amend the judgment, or in the alternative, to certify
the  Court's  Order  for  Interlocutory  Appeal.  On  April  30, 1999, the Court
declined  to  alter or amend its judgment and entered final judgment in favor of
IAHC  and  PLM  on  all  remaining claims.  The Plaintiff appealed to the United
States  Court  of  Appeals  for  the  5th  Circuit.  The Court of Appeals denied
Transmeridian's appeal, affirmed the District Court's judgement in IAHC's favor,
and  subsequently  denied  Transmeridian's request for rehearing.  Transmeridian
has  not  sought  further  review  of the District Court's judgment.  There have
been,  however,  subsequent  proceedings in the District Court on IAHC's request
for  the  assessment  of  costs  in  the  amount  of  approximately  $35,000.

     In  connection  with  this  litigation,  the  Partnership  has  incurred
substantial  legal  fees,  exceeding  $1 million.  An action seeking recovery of
these  costs  was  filed  on  behalf  of  the Partnership in November 1999.  See
"Indemnity  action against Transmeridian Airlines and Apple Vacations" described
below.

Second  action  involving  Transmeridian  Airlines
--------------------------------------------------

     On  November  9,  1998,  Investors  Asset Holding Corp., as Trustee for the
Partnership  (the  "Plaintiff"),  filed  an  action  in  Superior  Court  of the
Commonwealth  of  Massachusetts  in Suffolk County against Prime Air, Inc. d/b/a
Transmeridian  Airlines  ("Transmeridian"),  Atkinson & Mullen Travel, Inc., and
Apple  Vacations,  West,  Inc.,  both  d/b/a  Apple Vacations, asserting various
causes  of  action  for declaratory judgment and breach of contract.  The action
subsequently  was  removed  to  United States District Court for the District of
Massachusetts.  The  Plaintiff  filed  an Amended Complaint asserting claims for
breaches  of  contract  and  covenant  of  good  faith  and fair dealing against
Transmeridian  and  breach  of  guaranty  against  Apple  Vacations.

     In  October  1998,  an  aircraft  leased  by  Transmeridian (being the same
aircraft  in  the  above-referenced  "First  action  involving  Transmeridian
Airlines")  was  damaged  in  an  on-ground  accident  at the Caracas, Venezuela
airport.  The cost to repair the aircraft was estimated to be at least $350,000.
In  addition,  the  Partnership had to lease two substitute engines at a cost of
$82,000  per  month.  During  the  year ended December 31, 1999, the Partnership
incurred  total  engine  lease  costs of $984,000.  This was partially offset by
lease  rents paid by Transmeridian of $560,000 during the same period.  However,
as  of  September  11,  1999, Transmeridian ceased paying rent on this aircraft.
The  Plaintiff  alleges  that Transmeridian, among other things, has impeded the
Partnership's  ability  to  terminate the two engine lease contracts between the
Partnership  and  a  third  party.  The  Plaintiff  intends  to pursue insurance
coverage  and  also to enforce written guarantees issued by Apple Vacations that
absolutely  and  unconditionally guarantee Transmeridian's performance under the
lease and is seeking recovery of all costs, lost revenue and monetary damages in
connection  with  this  matter.  On  September  22,  2000,  Transmeridian file a
petition  for  bankruptcy reorganization under Chapter 11 of the Bankruptcy Code
in  the  Bankruptcy  Court  for the Northern District of Georgia in Atlanta (the
"Bankruptcy  Court").  This  filling automatically stayed all pending litigation
against  Transmeridian,  including this action.  The bankruptcy filings indicate
Transmeridian  has at least $24 million in debt.  In January 2001, Transmeridian
filed  a  reorganization plan and disclosure statement indicating that little if
any  money  will  be  available for distribution to unsecured creditors like the
Plaintiff.  Moreover,  Transmeridian's bankruptcy counsel has indicated recently
that  he intends to file an adversary proceeding in the bankruptcy court seeking
the  turn  over to Transmeridian the proceeds of certain insurance policies  (in
the  amount  of  approximately  $800,000)  that insured the Plaintiffs' aircraft
against  damage. Plaintiffs contend that all or most of these insurance proceeds
should  be  paid  to  them  and intend to contest vigorously any effort to cause
these  insurance  proceeds to be paid to Transmeridian.  Plaintiffs' counsel has
recently  initiated  discussions  with  Transmeridian's  counsel  concerning
settlement  of  the  claims  against  Transmeridian  and  the  dispute  over the
insurance  proceeds.  No  assurances  can  be  given  that  a settlement will be
reached.

     On  March  2,  2001,  Plaintiffs'  counsel filed a motion in the Bankruptcy
Court  asking  the  Court  to  lift  the  automatic  stay  of this Massachusetts
proceeding  so  that it may proceed to final judgment.  The Bankruptcy Court has
scheduled  a  hearing  on  this  motion  for  April  10,  2001.  Transmeridian's
bankruptcy counsel has indicated that he is considering asking the court to move
this  Massachusetts  action  to  Georgia  and consolidate it with the bankruptcy
proceeding.  The  General  Partner  cannot predict the outcome of its motion for
relief  from  stay  or  Transmeridian's  efforts  to  transfer  venue  of  the
Massachusetts action.  Notwithstanding the Transmeridian bankruptcy, the General
Partner  plans to vigorously pursue enforcement of the written guarantees issued
by  Apple  Vacations;  however,  it  is  too  early  to  predict the Plaintiff's
likelihood  of  success.

Indemnity  action  against  Transmeridian  Airlines  and  Apple  Vacations
--------------------------------------------------------------------------

     On  November  12,  1999, Investors Asset Holding Corp. ("IAHC"), as trustee
for the Partnership, filed an action against Transmeridian Airlines (f/k/a Prime
Air,  Inc.)  and  Atkinson  &  Mullen Travel, Inc. (d/b/a Apple Vacations) under
Civil Action No.  H-99-3804 in the United States District Court for the Southern
District  of  Texas,  Houston  Division, seeking recovery of attorneys' fees and
related costs incurred in defending the action described above under the heading
"First  action  involving  Transmeridian  Airlines."  The  present  suit  seeks
recovery  of  expenses  pursuant  to the indemnification provisions of the lease
agreement  under  which  Transmeridian  leased  the  Boeing  727-251  aircraft.
Currently,  the  amount  being sought is over $1 million.  On September 1, 2000,
IHAC  filed  with  the  Court  a  motion  for  partial summary judgment, seeking
judgment  on  liability  (i.e. that Transmeridian and Apple Vacations are liable
under  the lease agreements and guarantees).  IHAC also filed a motion for leave
to join in this litigation an affiliate of Apple's, Apple Vacations, West, inc.,
which  also  gave  written  guarantees  of Transmeridian's performance under the
lease  agreements.  On  September  22,  2000,  however,  Transmeridian  filed  a
petition  for  bankruptcy reorganization under Chapter 11 of the Bankruptcy Code
in  the  Bankruptcy  Court  for the Northern District of Georgia in Atlanta (the
"Bankruptcy  Court").  See  "Second  action  involving  Transmeridian  Airlines"
above.  On  January  10,  2001,  the  Bankruptcy Court granted IHAC's motion for
relief from the automatic stay so that this litigation may be pursued through to
final  judgment.  Transmeridian's  counsel in this action then filed a motion to
withdraw  its  appearance  on  behalf of Transmeridian.  The U.S. District Court
allowed that motion on March 6, 2001, and gave Transmeridian 60 days in which to
secure replacement counsel.  Within 20 days of the entry of replacement counsel,
Transmeridian  is  required  to file its opposition to IHAC's motion for partial
summary  judgment.  The  U.S.  District Court also allowed IHAC's motion to join
Apple  Vacations,  West,  Inc.  as  a  defendant  in  this  action.

     The  Plaintiffs'  counsel  has  recently  initiated  discussions  with
Transmeridian's  counsel  concerning  settlement  of  the  claims  against
Transmeridian.  No  assurances  can  be given that a settlement will be reached.
The  General  Partner  cannot  predict  the  outcome  of  this  suit.

Action  involving  Northwest  Airlines,  Inc.
---------------------------------------------

     On  September  22,  1995,  Investors Asset Holding Corp. and First Security
Bank,  N.A.,  trustees  of  the  Partnership  and  certain affiliated investment
programs  (collectively,  the  "Plaintiffs"),  filed  an action in United States
District  Court  for  the  District  of  Massachusetts  against  a lessee of the
Partnership, Northwest Airlines, Inc. ("Northwest").  The Complaint alleges that
Northwest did not fulfill its maintenance and return obligations under its Lease
Agreements  with  the  Plaintiffs  and  seeks  declaratory  judgment  concerning
Northwest's  obligations and monetary damages.  Northwest filed an Answer to the
Plaintiffs'  Complaint  and a motion to transfer the venue of this proceeding to
Minnesota.  The  Court  denied  Northwest's  motion.  On June 29, 1998, a United
States  Magistrate  Judge recommended entry of partial summary judgment in favor
of  the  Plaintiffs.  Northwest  appealed this decision.  On April 15, 1999, the
United States District Court Judge adopted the Magistrate Judge's recommendation
and  entered partial summary judgment in favor of the Plaintiffs on their claims
for  declaratory  judgment.  The  parties  then  undertook  a  second  phase  of
discovery,  focused  on  damages.  This  second phase of damages is scheduled to
conclude  in  April  2001  with  the  completion  of depositions of the parties'
experts.  In  February  2001, the District Court also denied summary judgment on
certain  of  the  Plaintiffs'  other  claims,  including  their  tort claims for
conversion.  If  no  settlement is reached, the Plaintiffs will proceed to trial
for  an  assessment of damages.  No firm trial date has been established at this
time;  however,  if a trial should become necessary, it is not expected to occur
before  June  2001.  The  General  Partner  believes that the Plaintiff's claims
ultimately  will  prevail and that the Partnership's financial position will not
be  adversely  affected  by  the  outcome  of  this  action.

NOTE  11  -  QUARTERLY  RESULTS  OF  OPERATIONS  (Unaudited)
------------------------------------------------------------

     The  following  is a summary of the quarterly results of operations for the
years  ended  December  31,  2000  and  1999:

                                  Three Months Ended
<TABLE>
<CAPTION>


                                                March 31,    June 30,    September 30,    December 31,     Total
                                               -----------  ----------  ---------------  --------------  ----------
<S>                                            <C>          <C>         <C>              <C>             <C>
                                                     2000
                                               -----------
(As Restated)

Total operating and sales-type lease revenue.  $  109,420   $  148,602  $      106,446   $     192,438   $  556,906
Net (loss) income . . . . . . . . . . . . . .      33,059    1,072,002        (205,791)           (669)     898,601
Net income (loss) per
  limited partnership unit. . . . . . . . . .        0.01         0.37           (0.07)          (0.00)        0.31

                                                     2000
                                               -----------
(As Previously Reported)

Total operating and sales-type lease revenue.  $  109,420   $  148,602  $      106,446   $     192,438   $  556,906
Net (loss) income . . . . . . . . . . . . . .      (4,476)     920,669        (402,587)       (337,380)     176,226
Net income (loss) per
  limited partnership unit. . . . . . . . . .          --         0.32           (0.14)          (0.12)        0.06

                                                     1999
                                               -----------
Total lease revenue                            $  708,129      482,218         393,846         256,977   $1,841,170
Net (loss) income . . . . . . . . . . . . . .    (111,725)  $2,915,743  $     (142,229)  $    (769,780)   1,892,009
Net (loss) income per
  limited partnership unit. . . . . . . . . .       (0.04)        1.02           (0.05)          (0.27)        0.66
</TABLE>



     The  Partnership's  net  income  in the three months ended June 30, 2000 is
primarily  the  result  of  the  sale  of  a  Boeing 727-251 ADV aircraft, which
resulted  in  a  net  gain,  for  financial  statement  purposes,  of  $750,000.

     The  Partnership's  net  income  in the three months ended June 30, 1999 is
primarily  the  result  of  the  sale  of  a  Boeing 727-251 ADV aircraft, which
resulted  in  a  net  gain,  for  financial  statement  purposes, of $3,109,500.

NOTE  12  -  SUBSEQUENT  EVENTS
-------------------------------

Debt  Refinancing
-----------------

     In  February  2001,  the  Partnership  and  certain  affiliated  investment
programs  (collectively  "the Programs") refinanced the outstanding indebtedness
and accrued interest related to an aircraft on lease to Aerovias de Mexico, S.A.
de  C.V.  In  addition  to refinancing the Programs' total existing indebtedness
and  accrued  interest  of  $4,758,845,  the  Programs  received additional debt
proceeds of $3,400,177.  The Partnership's aggregate share of the refinanced and
new  indebtedness  was  $1,211,860 including $706,831 used to repay the existing
indebtedness  on the refinanced aircraft.  The Partnership used a portion of its
share of the additional proceeds of $505,028 to repay the outstanding balance of
the  indebtedness  and  accrued  interest  related  to  the aircraft on lease to
Finnair  OY  of  $130,852  and  certain  aircraft reconfiguration costs that the
Partnership  had  accrued  at  December  31, 2000.  The new indebtedness bears a
fixed interest rate of 7.65%, principal is amortized monthly and the Partnership
has a balloon payment obligation at the expiration of the lease term of $404,138
in  September  2004.

Legal  Proceedings
------------------

     On  May 11, 2001, the general partners of the Partnerships that are nominal
defendants in the Class Action Lawsuit received a letter dated May 10, 2001 from
the  Associate  Director  and  Chief  Counsel  of  the  Division  of  Investment
Management  of  the  SEC  informing  the  general partners that the staff of the
Division  believes  that  American  Income  Partners  V-A  Limited  Partnership,
American  Income  Partners V-B Limited Partnership, American Income Partners V-C
Limited  Partnership, American Income Partners V-D Limited Partnership, American
Income  Fund I-A, American Income Fund I-B, American Income Fund I-E and AIRFUND
II  International  Limited  Partnership  (the  "Designated  Partnerships")  are
investment  companies as defined in Section 3(a)(1)(C) of the 1940 Act.  The SEC
staff noted that Section 7 of the 1940 Act makes it unlawful for an unregistered
investment company, among other things, to offer, sell, purchase, or acquire any
security or engage in any business in interstate commerce.  Accordingly, Section
7 would prohibit any partnership that is an unregistered investment company from
engaging  in  any  business in interstate commerce, except transactions that are
merely  incidental  to  its  dissolution.  The  SEC staff asked that the general
partners  advise  them  within  the next 30 days as to what steps the Designated
Partnerships  will  take  to  address  their status under the 1940 Act.  The SEC
staff  asserts  that  the  notes  evidencing  the  loans  to Echelon Residential
Holdings  are  investment  securities  and  the  ownership  of the notes by said
partnerships  cause  them  to  be  investment companies and that, in the case of
American  Income  Partners  V-A Limited Partnership and V-B Limited Partnership,
they  may  have  become  investment  companies  when  they  received  the Semele
securities  as  part  of  the compensation for the sale of a vessel to Semele in
1997.  The  general  partners have consulted with counsel who specializes in the
1940  Act  and,  based  on  counsel's advice, do not believe that the Designated
Partnerships  are  investment  companies.

     The letter also stated that the Division is considering whether to commence
enforcement  action with respect to this matter.  Noting that the parties to the
Class  Action  Lawsuit  were  scheduled  to  appear before the court in the near
future  to  consider a proposed settlement, and that the SEC staff believed that
its views, as expressed in the letter, would be relevant to the specific matters
that will be considered by the court at the hearing, the SEC staff submitted the
letter  to  the  court  for  its  consideration.

     On  May  15,  2001,  Defendants'  Counsel  filed with the court Defendants'
Status Report pursuant to the court's March 12, 2001 Order.  Defendants reported
that,  notwithstanding  the  parties' best efforts, the staff of the SEC has not
completed  its  review  of  the  solicitation  statement  in connection with the
proposed  settlement  of  the Class Action Lawsuit.  Nonetheless, the Defendants
stated their belief that the parties should continue to pursue the court's final
approval  of  the  proposed settlement. In this regard, the Defendants also have
maintained, on the advice of special 1940 Act counsel that, even if the 1940 Act
applies  to  the  Designated  Partnerships, the 1940 Act does not prohibit going
forward  with  the proposed settlement, as that transaction is merely incidental
to  a  dissolution  of  the  Partnerships  and  therefore  is not subject to the
prohibitions  of  Section  7  of  the  1940  Act.

     The  Defendants  also  referred  to  the SEC staff's letter of May 10, 2001
asserting  that  certain  of  the  partnerships  are investment companies and to
special  1940  Act  counsel's  submissions  to  the  SEC staff setting forth the
reasons  why  the 1940 Act does not apply to the Designated Partnerships, noting
that  counsel  had  informed  the staff of the Division of Investment Management
that,  based  upon  counsel's understanding of the surrounding circumstances and
after  an  in-depth  analysis  of the applicable law, if asked, counsel would be
willing  to  issue  an  opinion  of the firm that none of the partnerships is an
investment  company under the 1940 Act.  The Defendants stated their belief that
the proposed settlement is still viable and in the best interests of the parties
and  that  final  approval  should be pursued.  The Defendants advised the court
that  they believe that if the court were to address the issue of whether or not
the  1940  Act  applies  to  the partnerships and the proposed consolidation, it
could  remove  the  major  obstacle to the settlement being finally consummated.
The  Defendants also requested that the court schedule a hearing to address on a
preliminary basis the objection to the proposed settlement raised in the staff's
May  10,  2001  letter.

     Plaintiffs' Counsel also submitted a Plaintiffs' Status Report to the court
on  May  15,  2001  in  which  they  reported  that  the SEC review has not been
concluded  and  that  they  notified the Defendants that they would not agree to
continue  to  stay  the  further  prosecution  of the litigation in favor of the
settlement  and  that  they  intend to seek court approval to immediately resume
active  prosecution of the claims of the Plaintiffs.  Plaintiffs' Counsel stated
in  the Report that the "[p]laintiffs continue to believe that the settlement is
in  the  best  interests of the Operating Partnership Sub-class.  However, since
the  SEC  has  yet  to  complete  its review of the proxy, the Plaintiffs do not
believe  that  the  litigation  should continue to be stayed so that the SEC may
continue  its  regulatory  review for an indefinite period of time."  Plaintiffs
requested  a  pre-trial  conference to schedule filing of Plaintiffs' motion for
class certification on or before May 29, 2001 and resumption of merits discovery
and  discovery related to the class certification motion.  Subsequently, after a
status  conference  on  May  31, 2001, the court issued an order on June 4, 2001
setting  a  trial  date  of  March  4,  2002, referred the case to mediation and
referred  discovery  to  a  magistrate  judge.  The  Defendant's and Plaintiff's
Counsel  have  continued  to  negotiate  toward  a  settlement  and have reached
agreement  as  to  its principal business terms.  As part of the settlement, EFG
has  agreed  to  buy  the  loans  made  by  the Exchange Partnerships to Echelon
Residential  Holdings  for an aggregate of $32 million plus interest at 7.5% per
annum,  if  they  are  not  repaid prior to or at their scheduled maturity date.
Upon  completion  of  a  stipulation  of settlement, the parties will submit the
settlement  to  the  court  for  approval.

     There  can be no assurance that a settlement of the sub-class involving the
Exchange  Partnerships  will  receive  final  Court  approval  and  be effected.
However,  in  the  absence  of  a  final  settlement  approved by the Court, the
Defendants  intend to defend vigorously against the claims asserted in the Class
Action Lawsuit.  Neither the General Partner nor its affiliates can predict with
any  degree of certainty the cost of continuing litigation to the Partnership or
the  ultimate  outcome.

Impairment  of  Loan  Receivable
--------------------------------

     The General Partner has determined that recoverability of the Partnership's
loan  receivable  from Echelon Residential Holdings, including accrued interest,
became impaired during the second quarter of 2001.  As a result, the Partnership
recorded  an  impairment  of  $318,500  at June 30, 2001, reflecting the General
Partner's  assessment of the amount of loss that is likely to be incurred by the
Partnership.  In  addition  to  the  write-down  recorded  at June 30, 2001, the
Partnership reserved all accrued interest recorded on the loan through March 31,
2001,  or  $590,772,  and  has  ceased the accrual of future interest, effective
April  1,  2001.  The  write-down was precipitated principally by a slowing U.S.
economy  and  its effects on the real estate development industry.  The economic
outlook  for  the  properties  that  existed  when  the  loan  was  funded  has
deteriorated  and  inhibited  the  ability  of  Echelon  Residential  Holdings'
management  to secure low-cost sources of development capital, including but not
limited  to joint-venture or equity partners.  In response to these developments
and  lower  risk  tolerances  in  the  credit markets, the management of Echelon
Residential  Holdings  decided  in the second quarter of 2001 to concentrate its
prospective  development  activities  within the southeastern United States and,
therefore,  to  dispose  of  development  sites located elsewhere.  In May 2001,
Echelon  Residential  Holdings  closed  its  Texas-based development office; and
since  the beginning of 2001, the company has sold three of nine properties (two
in  July  2001  and  one  in October 2001).  As of November 2001, one additional
property  is  under  contract  to be sold, subject to due diligence that remains
pending. As a result of these developments, the General Partner does not believe
that  Echelon  Residential  Holdings  will  realize the profit levels originally
believed  to  be  achievable  from either selling these properties as a group or
developing  all  of  them  as  multi-family  residential  communities.


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

     None.

<PAGE>
PART  III

Item  10.  Directors  and  Executive  Officers  of  the  Partnership.
---------------------------------------------------------------------

     (a-b)  Identification  of  Directors  and  Executive  Officers

     The  Partnership  has  no Directors or Officers.  As indicated in Item 1 of
this  report, AFG Aircraft Management Corporation is the sole General Partner of
the  Partnership.  Under the Restated Agreement, as amended, the General Partner
is  solely  responsible  for  the operation of the Partnership's properties. The
Recognized  Owners  have  no  right  to  participate  in  the  control  of  the
Partnership's  general  operations,  but  they do have certain voting rights, as
described  in  Item  12 herein.  The names, titles and ages of the Directors and
Executive  Officers  of the General Partner as of March 15, 2001 are as follows:

DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  GENERAL  PARTNER  (See  Item  13)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                 Name                    Title                   Age    Term
----------------------  ---------------------------------------  ---  ---------
<S>                     <C>                                      <C>  <C>
Geoffrey A. MacDonald   Chairman of EFG and President              .  Until a
 .                       and a Director of the General Partner     52  successor
 .                                                             .    .  is duly
Gary D. Engle           President and Chief Executive              .  elected
 .                       Officer of EFG and a                       .  and
 .                       Director of the General Partner           52  qualified

Michael J. Butterfield  Executive Vice President and Chief
 .                       Operating Officer of EFG and
 .                       Treasurer of the General Partner          41

Gail D. Ofgant          Senior Vice President, Lease Operations
 .                       of EFG and Senior Vice President of
 .                       the General Partner                       35
</TABLE>



     (c)  Identification  of  Certain  Significant  Persons

     None.

     (d)  Family  Relationship

     No  family  relationship  exists  among  any  of  the  foregoing  Partners,
Directors  or  Executive  Officers.

(e)  Business  Experience

     Mr.  MacDonald,  age  52,  is Chairman of EFG and has been President of the
General  Partner  since  1988  and a Director of the General Partner since 1988.
Mr.  McDonald  was  a  co-founder  of EFG's predecessor, American Finance Group,
which  was  established  in  1980.  Mr.  MacDonald  is  a member of the Board of
Managers  of  Echelon Development Holdings LLC and President of American Finance
Group  Securities Corporation.  Prior to co-founding American Finance Group, Mr.
MacDonald  held  various  positions  in  the  equipment leasing industry and the
ethical  pharmaceutical  industry with Eli Lilly & Company.  Mr. MacDonald holds
an  M.B.A.  from  Boston  College  and  a  B.A.  degree  from  the University of
Massachusetts  (Amherst).

     Mr.  Engle,  age  52, is President and Chief Executive Officer of EFG, sole
shareholder  and  Director of its general partner, Equis Corporation, and a Vice
President  and  Director  of  several  of EFG's subsidiaries and affiliates. Mr.
Engle  has been a Director of the General Partner since 1991 and is President of
AFG  Realty Corporation.  Mr. Engle is also Chairman and Chief Executive Officer
of Semele Group Inc. ("Semele") and a member of the Board of Managers of Echelon
Development  Holdings  LLC.  Mr. Engle controls the general partners of Atlantic
Acquisition  Limited  Partnership  ("AALP")  and  Old  North  Capital  Limited
Partnership ("ONC"). Mr. Engle joined EFG in 1990 as an Executive Vice President
and  acquired  control  of EFG and its subsidiaries in December 1994.  Mr. Engle
co-founded  Cobb  Partners Development, Inc., a real estate and mortgage banking
company,  where  he  was  a principal from 1987 to 1989.  From 1980 to 1987, Mr.
Engle  was  Senior  Vice  President and Chief Financial Officer of Arvida Disney
Company,  a  large-scale community development organization owned by Walt Disney
Company.  Prior  to  1980, Mr. Engle served in various management consulting and
institutional brokerage capacities.  Mr. Engle has an M.B.A. degree from Harvard
University  and  a  B.S.  degree from the University of Massachusetts (Amherst).

     Mr.  Butterfield,  age  41, is Executive Vice President and Chief Operating
Officer  of  EFG  and has served as  Vice President and Treasurer of the General
Partner since 1996.  Mr. Butterfield also serves as Vice President and Treasurer
of  subsidiaries  and affiliates of EFG. Mr. Butterfield is also Chief Financial
Officer  of  Semele  and  Vice  President,  Finance  and  Clerk of Equis/Echelon
Management Corporation, the manager of Echelon Residential LLC.  Mr. Butterfield
joined  EFG  in June 1992 and became a Vice President in 1996 and Executive Vice
President  and  Chief  Operating  Officer  in  2000.  Prior  to joining EFG, Mr.
Butterfield  was  an  audit  manager  with Ernst & Young LLP, which he joined in
1987.  Mr.  Butterfield  was  also  employed  in  public accounting and industry
positions in New Zealand and London (UK) prior to coming to the United States in
1987.  Mr.  Butterfield  attained  his  Associate  Chartered Accountant (A.C.A.)
professional  qualification  in  New  Zealand  and  has  completed  his  C.P.A.
requirements in the United States.  Mr. Butterfield holds a Bachelor of Commerce
degree  from  the  University  of  Otago,  Dunedin,  New  Zealand.

     Ms.  Ofgant,  age 35, is Senior Vice President, Lease Operations of EFG and
has  served  as  Senior  Vice  President of the General Partner since 1998.  Ms.
Ofgant  also  serves  as Senior Vice President for certain  of EFG's affiliates.
Ms.  Ofgant  is  Senior  Vice  President  and  Assistant  Clerk of Equis/Echelon
Management  Corporation,  the  manager  of  Echelon Residential LLC.  Ms. Ofgant
joined  EFG  in  July  1989  and  held various positions with the company before
becoming  Senior  Vice  President  in  1998.  From  1987 to 1989, Ms. Ofgant was
employed  by  Security  Pacific National Trust Company.  Ms. Ofgant holds a B.S.
degree  from  Providence  College.

     (f)  Involvement  in  Certain  Legal  Proceedings

     None.

     (g)  Promoters  and  Control  Persons

     Not  applicable.

Item  11.  Executive  Compensation.
-----------------------------------

     (a)  Cash  Compensation

     Currently,  the  Partnership has no employees.  However, under the terms of
the  Restated  Agreement,  as  amended,  the Partnership is obligated to pay all
costs  of  personnel  employed  full  or part-time by the Partnership, including
officers  or  employees  of  the General Partner or its Affiliates.  There is no
plan  at  the  present  time  to  make  any partners or employees of the General
Partner or its Affiliates employees of the Partnership.  The Partnership has not
paid and does not propose to pay any options, warrants or rights to the officers
or  employees  of  the  General  Partner  or  its  Affiliates.

     (b)  Compensation  Pursuant  to  Plans

     None.

     (c)  Other  compensation

     Although  the  Partnership  has  no  employees, as discussed in Item 11(a),
pursuant  to  Section  10.4(c)  of  the  Restated  Agreement,  as  amended,  the
Partnership  incurs  a  monthly  charge  for  personnel costs of the Manager for
persons  engaged  in  providing  administrative  services to the Partnership.  A
description  of the remuneration paid by the Partnership to the Manager for such
services  is  included  in  Item  13  herein,  and  in  Note  7 to the financial
statements  included  in  Item  8,  herein.

     (d)     Stock  Options  and  Stock  Appreciation  Rights.

     Not  applicable.

     (e)     Long-Term  Incentive  Plan  Awards  Table.

     Not  applicable.

     (f)     Defined  Benefit  or  Actuarial  Plan  Disclosure.

     Not  applicable.

     (g)  Compensation  of  Directors

     None.

     (h)  Termination  of  Employment  and  Change  of  Control  Arrangement

     There  exists  no remuneration plan or arrangement with the General Partner
or its Affiliates which results or may result from their resignation, retirement
or  any  other  termination.

Item  12.  Security  Ownership  of  Certain  Beneficial  Owners  and Management.
--------------------------------------------------------------------------------

     By virtue of its organization as a limited partnership, the Partnership has
outstanding  no  securities  possessing  traditional voting rights.  However, as
provided  for  in Section 11.2(a) of the Restated Agreement, as amended (subject
to  Sections 11.2(b) and 11.3), a majority interest of the Recognized Owners has
voting  rights  with  respect  to:

1.     Amendment  of  the  Restated  Agreement;

2.     Termination  of  the  Partnership;

3.     Removal  of  the  General  Partner;  and

4.     Approval  or disapproval of the sale of all, or substantially all, of the
assets  of the Partnership (except in the orderly liquidation of the Partnership
upon  its  termination  and  dissolution).

     No person or group is known by the General Partner to own beneficially more
than  5%  of the Partnership's 2,714,647 outstanding Units as of March 15, 2001.

     The  ownership  and  organization  of  EFG  is  described in Item 1 of this
report.

Item  13.  Certain  Relationships  and  Related  Transactions.
--------------------------------------------------------------

     The  General  Partner  of  the  Partnership  is  AFG  Aircraft  Management
Corporation,  an  affiliate  of  EFG.

     (a)  Transactions  with  Management  and  Others

     All  operating  expenses  incurred  by  the  Partnership are paid by EFG on
behalf  of  the  Partnership  and  EFG is reimbursed at its actual cost for such
expenditures.  Fees and other costs incurred during the years ended December 31,
2000, 1999 and 1998, which were paid or accrued by the Partnership to EFG or its
Affiliates,  are  as  follows:

<TABLE>
<CAPTION>

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

Equipment management fees                        $   29,913  $   92,059  $  156,535
Administrative charges                               72,967      71,699      53,676
Reimbursable operating expenses
 due to third parties                               988,461   1,987,647   1,762,271
                                                 ----------  ----------  ----------

                                          Total  $1,091,341  $2,151,405  $1,972,482
                                                 ==========  ==========  ==========
</TABLE>



     As provided under the terms of the Management Agreement, EFG is compensated
for  its  services  to  the  Partnership.  Such services include acquisition and
management  of  equipment.  For  acquisition services, EFG was compensated by an
amount  equal  to  3.07%  of  Equipment Base Price paid by the Partnership.  For
management  services,  EFG  is  compensated  by  an  amount equal to 5% of gross
operating  lease  rental  revenues  and  2%  of  gross  full payout lease rental
revenues  received by the Partnership.  Both acquisition and management fees are
subject  to  certain  limitations  defined  in  the  Management  Agreement.

     Administrative  charges  represent amounts owed to EFG, pursuant to Section
10.4(c)  of  the Restated Agreement, as amended, for persons employed by EFG who
are  engaged  in  providing  administrative  services  to  the  Partnership.
Reimbursable operating expenses due to third parties represent costs paid by EFG
on  behalf  of  the  Partnership  which  are  reimbursed  to EFG at actual cost.

     All  aircraft  were  purchased  from  EFG  or  one  of its Affiliates.  The
Partnership's  acquisition cost was determined by the method described in Note 3
to  the  financial  statements  included  in  Item  8,  herein.

     All  rents  and proceeds from the sale of aircraft are paid directly to EFG
or  to  a  lender.  EFG  temporarily  deposits  collected  funds  in  a separate
interest-bearing  escrow  account  prior  to  remittance to the Partnership.  At
December  31,  2000,  the Partnership was owed $33,452 by EFG for such funds and
the  interest  thereon.  These funds were remitted to the Partnership in January
2001.

     In  1990,  EFG  assigned  its  equipment  Management  Agreement  with  the
Partnership  to AF/AIP Programs Limited Partnership, and AF/AIP Programs Limited
Partnership  entered  into  an  identical management agreement with EFG.  AF/AIP
Programs  Limited  Partnership  also  entered  into  a nonexclusive confirmatory
agreement  with  EFG's  former  majority  owned  subsidiary, AIRFUND Corporation
("AFC"),  for  the  provision  of  aircraft  remarketing  services.

     An  affiliate  of  the  General  Partner  owns  Units in the Partnership as
follows:
<TABLE>
<CAPTION>

<S>                                    <C>          <C>
                                       Number of    Percent of Total
Affiliate                              Units Owned  Outstanding Units

Old North Capital Limited Partnership       40,000               1.47%
-------------------------------------  -----------  ------------------
</TABLE>


     Old  North  Capital  Limited Partnership ("ONC") is a Massachusetts limited
partnership  formed in 1995. The general partner of ONC is controlled by Gary D.
Engle  and the limited partnership interests of ONC are owned by Semele. Gary D.
Engle  is  Chairman  and  CEO  of  Semele.

     The  discussions  of the loan to Echelon Residential Holdings in Items 1(b)
and  1(c)  above  are  incorporated  herein  by  reference.

     (b)  Certain  Business  Relationships

     None.

     (c)  Indebtedness  of  Management  to  the  Partnership

     None.

     (d)  Transactions  with  Promoters

     Not  applicable.

<PAGE>


PART  IV

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

     (a)  Documents  filed  as  part  of  this  report:


     (2)     Financial  Statement  Schedules:

          None  required.

     (3)     Exhibits:

          Except  as  set forth below, all Exhibits to Form 10-K/A, as set forth
in  Item  601  of  Regulation  S-K,  are  not  applicable.

          A  list of exhibits filed or incorporated by reference is as follows:

           Exhibit
          Number
      ----------

               2.1     Plaintiffs'  and Defendants' Joint Motion to Modify Order
Preliminarily  Approving  Settlement,  Conditionally Certifying Settlement Class
and  Providing  for Notice of, and Hearing on, the Proposed Settlement was filed
in the Registrant's Annual Report on Form 10-K/A for the year ended December 31,
1998  as  Exhibit  2.1  and  is  incorporated  herein  by  reference.

               2.2     Plaintiffs'  and  Defendants' Joint Memorandum in Support
of  Joint  Motion  to  Modify  Order  Preliminarily  Approving  Settlement,
Conditionally  Certifying  Settlement  Class  and  Providing  for Notice of, and
Hearing  on, the Proposed Settlement was filed in the Registrant's Annual Report
on  Form  10-K/A  for  the  year  ended  December 31, 1998 as Exhibit 2.2 and is
incorporated  herein  by  reference.

               2.3     Order  Preliminarily  Approving Settlement, Conditionally
Certifying  Settlement  Class  and  Providing for Notice of, and Hearing on, the
Proposed  Settlement  (August  20,  1998)  was  filed in the Registrant's Annual
Report on Form 10-K/A for the year ended December 31, 1998 as Exhibit 2.3 and is
incorporated  herein  by  reference.

               2.4     Modified  Order  Preliminarily  Approving  Settlement,
Conditionally  Certifying  Settlement  Class  and  Providing  for Notice of, and
Hearing  on,  the  Proposed  Settlement  (March  22,  1999)  was  filed  in  the
Registrant's  Annual  Report on Form 10-K/A for the year ended December 31, 1998
as  Exhibit  2.4  and  is  incorporated  herein  by  reference.

       2.5          Plaintiffs'  and  Defendants' Joint Memorandum in Support of
Joint  Motion  to  Further  Modify  Order  Preliminarily  Approving  Settlement,
Conditionally  Certifying  Settlement  Class  and  Providing  for Notice of, and
Hearing  on, the Proposed Settlement was filed in the Registrant's Annual Report
on  Form  10-K  for  the  year  ended  December  31,  1999 as Exhibit 2.5 and is
incorporated  herein  by  reference.

     2.6          Second  Modified  Order  Preliminarily  Approving  Settlement,
Conditionally  Certifying  Settlement  Class  and  Providing  for Notice of, and
Hearing  on,  the  Proposed  Settlement  (March  5,  2000)  was  filed  in  the
Registrant's  Annual Report on Form 10-K for the year ended December 31, 1999 as
Exhibit  2.6  and  is  incorporated  herein  by  reference.

     2.7          Proposed  Order  Granting  Joint  Motion  to  Continue  Final
Approval  Settlement  Hearing  (March  13,  2001)  was filed in the Registrant's
Annual  Report  on  Form  10-K  for  the  year  ended  December  31, 2000 and is
incorporated  herein  by  reference.

          2.8          Order  Setting  Trial  Date  and  Discovery  Deadlines,
Referring  Case to Mediation and Referring Discovery to United States Magistrate
Judge  (June  4,  2001).


           Exhibit
           Number
           ------

     4          Amended  and  Restated  Agreement  and  Certificate  of  Limited
Partnership  included  as  Exhibit  A  to  the Prospectus, which was included in
Registration  Statement on Form S-1 (No. 33-25334) and is incorporated herein by
reference.

          10.1     Promissory  Note  in the principal amount of $3,640,000 dated
March  8,  2000  between  the  Registrant,  as  lender,  and Echelon Residential
Holdings  LLC,  as borrower, was filed in the Registrant's Annual Report on Form
10-K  for  the  year ended December 31, 1999 as Exhibit 10.1 and is incorporated
herein  by  reference.

          10.2     Pledge  Agreement  dated  March  8,  2000  between  Echelon
Residential  Holdings  LLC  (Pledgor)  and  American Income Partners V-A Limited
Partnership,  as  Agent  for  itself  and  the  Registrant,  was  filed  in  the
Registrant's  Annual Report on Form 10-K for the year ended December 31, 1999 as
Exhibit  10.2  and  is  incorporated  herein  by  reference.

          99(a)     Lease  agreement  with American Trans Air, Inc. was filed in
the Registrant's Annual Report on Form 10-K for the year ended December 31, 1996
as  Exhibit  99  (f)  and  is  incorporated  herein  by  reference.

          99(b)     Lease  agreement  with Southwest Airlines, Inc. was filed in
the Registrant's Annual Report on Form 10-K for the year ended December 31, 1997
as  Exhibit  99  (f)  and  is  incorporated  herein  by  reference.

          99(c)     Lease  agreement  with Southwest Airlines, Inc. was filed in
the Registrant's Annual Report on Form 10-K for the year ended December 31, 1997
as  Exhibit  99  (g)  and  is  incorporated  herein  by  reference.

          99(d)     Lease  agreement  with Southwest Airlines, Inc. was filed in
the Registrant's Annual Report on Form 10-K for the year ended December 31, 1997
as  Exhibit  99  (h)  and  is  incorporated  herein  by  reference.

          99(e)     Lease  agreement  with  Finnair  OY  was  filed  in  the
Registrant's  Annual Report on Form 10-K for the year ended December 31, 1997 as
Exhibit  99  (i)  and  is  incorporated  herein  by  reference.

          99(f)     Lease  agreement  with  Finnair  OY  was  filed  in  the
Registrant's  Annual Report on Form 10-K for the year ended December 31, 1997 as
Exhibit  99  (j)  and  is  incorporated  herein  by  reference.

          99(g)     Lease  agreement with Transmeridian Airlines, Inc. was filed
in  the  Registrant's Annual Report on Form 10-K for the year ended December 31,
1997  as  Exhibit  99  (k)  and  is  incorporated  herein  by  reference.

          99(h)     Lease  agreement  with  Classic Airways Limited was filed in
the Registrant's Annual Report on Form 10-K for the year ended December 31, 1998
as  Exhibit  99  (k)  and  is  incorporated  herein  by  reference.

          99(i)     Lease  agreement  with  Aerovias  de Mexico S.A. de C.V. was
filed in the Registrant's Annual Report on Form 10-K for the year ended December
31,  2000  and  is  incorporated  herein  by  reference.


     Exhibit
       Number
       ------

          99(j)     Aircraft Conditional Sale Agreement with Royal Aviation Inc.
was  filed  in  the  Registrant's  Annual Report on Form 10-K for the year ended
December  31,  2000  and  is  incorporated  herein  by  reference.

          99(k)     Lease  agreement with Air Slovakia BWJ, Ltd was filed in the
Registrant's Annual Report on Form 10-K for the year ended December 31, 2000 and
is  incorporated  herein  by  reference.

(b)       Reports  on  Form  8-K

               None.

(c)     Other  Exhibits

None.

(c)          Financial  Statement  Schedules:

          Consolidated Financial Statements for Echelon Residential Holdings LLC
as  of  December  31,  2000  and
     for  the Period March 8, 2000 (Date of Inception) through December 31, 2000
and  Independent  Auditors'
     Report.


<PAGE>

                                   SIGNATURES

     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.


                  AIRFUND II International Limited Partnership


     By:  AFG  Aircraft  Management  Corporation,
     a  Massachusetts  corporation  and  the
     General  Partner  of  the  Registrant.






<TABLE>
<CAPTION>

<S>                                           <C>
By: /s/   Geoffrey A. MacDonald               By: /s/   Gary D. Engle
--------------------------------------------  --------------------------------
Geoffrey A. MacDonald                         Gary D. Engle
Chairman of EFG and                           President and Chief Executive
President and a Director of the               Officer of EFG and a
General Partner                               Director of the General Partner
 .                                             (Principal Executive Officer)





Date: November 13, 2001                       Date: November 13, 2001
--------------------------------------------  --------------------------------




By: /s/   Michael J. Butterfield
--------------------------------------------
Michael J. Butterfield
Executive Vice President and Chief
Operating Officer of EFG and Treasurer
of the General Partner
(Principal Financial and Accounting Officer)



Date: November 13, 2001
--------------------------------------------
</TABLE>





<PAGE>



SCHEDULE  14(D)


ECHELON  RESIDENTIAL  HOLDINGS  LLC
Consolidated  Financial  Statements
as  of  December  31,  2000
and  for  the  Period  March  8,  2000  (Date  of  Inception)
through  December  31,  2000
and  Independent  Auditors'  Report


<PAGE>
INDEPENDENT  AUDITORS'  REPORT

To  the  Members  of
 Echelon  Residential  Holdings  LLC:

We  have  audited  the  accompanying  consolidated  balance  sheet  of  Echelon
Residential  Holdings  LLC, a Delaware limited liability company ("the Company")
as  of  December  31, 2000 and the related consolidated statement of operations,
members'  equity  (deficiency) and cash flows for the period March 8, 2000 (date
of  inception)  through  December  31, 2000.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on  these  financial  statements  based  on  our  audit.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  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  audit  provides  a
reasonable  basis  for  our  opinion.

In  our  opinion,  such consolidated financial statements present fairly, in all
material  respects,  the  financial  position  of the Company as of December 31,
2000,  and the results of its operations and its cash flows for the period March
8,  2000  (date  of  inception)  through  December  31,  2000 in conformity with
accounting  principles  generally  accepted  in  the  United  States of America.


Tampa,  Florida
March  23,  2001

<PAGE>


ECHELON  RESIDENTIAL  HOLDINGS  LLC

CONSOLIDATED  BALANCE  SHEET
DECEMBER  31,  2000


<TABLE>
<CAPTION>

<S>                                                                <C>
ASSETS

REAL ESTATE - Net (Notes 1 and 2)                                  $61,092,202

CASH AND CASH EQUIVALENTS (Note 1)                                   3,789,198

RESTRICTED CASH (Note 1)                                                 8,703

RESTRICTED INVESTMENTS (Note 2)                                      2,155,160

ACCOUNTS RECEIVABLE - Affiliates (Note 7)                              115,521

PREPAID EXPENSES AND OTHER LONG-TERM ASSETS                             69,417

CORPORATE EQUIPMENT - Net of accumulated depreciation of $57,733       286,784

INVESTMENT IN UNCONSOLIDATED JOINT VENTURE (Note 3)                  1,063,906
                                                                   ------------

TOTAL ASSETS                                                       $68,580,891
                                                                   ============


LIABILITIES AND MEMBERS' EQUITY

LIABILITIES:
  Accounts payable                                                 $    10,984
  Contractor payable                                                 1,752,830
  Accounts payable - Affiliates (Note 7)                               114,180
  Accrued expenses                                                     797,832
  Retainage payable                                                  1,125,865
  Security deposits                                                      8,625
  Interest payable                                                   4,385,805
  Construction loans (Note 4)                                       26,837,740
  Other long-term liabilities                                          109,411
  Notes payable (Note 5)                                            35,039,890
                                                                   ------------

           Total liabilities                                        70,183,162

COMMITMENTS AND CONTINGENCIES (Notes 4 and  9)

MINORITY INTEREST (Note 6)                                           2,257,367

MEMBERS' EQUITY (DEFICIENCY) (Note 1)                               (3,859,638)
                                                                   ------------

TOTAL LIABILITIES AND MEMBERS' EQUITY                              $68,580,891
                                                                   ============

See notes to consolidated financial statements.
</TABLE>




<PAGE>


ECHELON  RESIDENTIAL  HOLDINGS  LLC

CONSOLIDATED  STATEMENT  OF  OPERATIONS
PERIOD  MARCH  8,  2000  (DATE  OF  INCEPTION)  THROUGH  DECEMBER  31,  2000
<TABLE>
<CAPTION>

<S>                                                    <C>

SALES AND REVENUES:
  Real estate operations:
    Rental revenues                                    $   230,834
    Management fees                                        695,162
    Developer fees                                         985,141
  Sale of development property                           3,104,532
  Investment income                                        191,543
  Other Income                                              23,000
                                                       ------------

           Total sales and revenues                      5,230,212
                                                       ------------

EXPENSES:
  Rental and other operations                              558,561
  Cost of development property sold                      3,317,880
  Write-down of land held for development or sale          635,437
  Depreciation expense                                     148,861
  Interest expense on long-term debt - net of amounts
           capitalized of $606,990                       4,460,345
  General and administrative expenses                    2,937,514
                                                       ------------

           Total expenses                               12,058,598
                                                       ------------

EQUITY IN LOSS OF UNCONSOLIDATED JOINT VENTURE            (148,023)

MINORITY INTEREST                                          270,383
                                                       ------------

NET LOSS                                               $(6,706,026)
                                                       ============


See notes to consolidated financial statements.
</TABLE>




<PAGE>
------



ECHELON  RESIDENTIAL  HOLDINGS  LLC
-----------------------------------

CONSOLIDATED  STATEMENTS  OF  MEMBERS'  EQUITY  (DEFICIENCY)
------------------------------------------------------------
PERIOD  MARCH  8,  2000  (DATE  OF  INCEPTION)  THROUGH  DECEMBER  31,  2000
----------------------------------------------------------------------------
<TABLE>
<CAPTION>

<S>                                              <C>           <C>              <C>

                                                 INITIAL       PARTICIPATING
                                                 MEMBERS       MEMBERS          TOTAL

BALANCE AT MARCH 8, 2000                         $   195,226   $            -   $   195,226

  Members' capital contributions                           -        2,651,162     2,651,162

  Net loss                                        (5,600,020)      (1,106,006)   (6,706,026)
                                                 ------------  ---------------  ------------

BALANCE AT DECEMBER 31, 2000                     $(5,404,794)  $    1,545,156   $(3,859,638)
                                                 ============  ===============  ============


See notes to consolidated financial statements.
</TABLE>




<PAGE>
------


ECHELON  RESIDENTIAL  HOLDINGS  LLC
-----------------------------------

CONSOLIDATED  STATEMENT  OF  CASH  FLOWS
----------------------------------------
PERIOD  MARCH  8,  2000  (DATE  OF  INCEPTION)  THROUGH  DECEMBER  31,  2000
----------------------------------------------------------------------------
<TABLE>
<CAPTION>

<S>                                                               <C>

CASH FLOW PROVIDED BY (USED IN) OPERATING ACTIVITIES:
  Net loss                                                        $ (6,706,026)
  Adjustment to reconcile net loss to cash provided by
     (used in) operating activities:
      Depreciation                                                     148,861
      Loss on sale of development property                             213,348
      Minority interest                                               (270,383)
      Equity in loss of unconsolidated joint venture                   148,023
      Write-down of land held for development or sale                  635,437
      Changes in working capital:
        Accounts payable, accrued expenses and other liabilities    (4,343,190)
        Interest payable                                             4,385,805
        Other working capital changes                                  311,588
                                                                  -------------

          Net cash used in operating activities                     (5,476,537)
                                                                  -------------

CASH FLOW PROVIDED BY (USED IN) INVESTING ACTIVITIES:
  Increase in restricted cash and restricted investments            (2,163,863)
  Net proceeds from sale of development property                     3,104,532
  Payments related to construction in progress                     (29,601,108)
                                                                  -------------

           Net cash used in investing activities                   (28,660,439)
                                                                  -------------

CASH FLOW PROVIDED BY (USED IN) FINANCING ACTIVITIES:
  Issuance of notes payable                                          6,244,000
  Repayment of notes payable                                        (5,474,000)
  Proceeds from construction loans                                  26,585,765
  Members' capital contributions                                     2,651,162
                                                                  -------------

           Net cash provided by financing activities                30,006,927
                                                                  -------------

NET DECREASE IN CASH AND CASH EQUIVALENTS                           (4,130,049)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                       7,919,247
                                                                  -------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                          $  3,789,198
                                                                  =============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the period for:
    Interest                                                      $    681,530
                                                                  =============


See notes to consolidated financial statements.
</TABLE>




<PAGE>
------
ECHELON  RESIDENTIAL  HOLDINGS  LLC
-----------------------------------
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
----------------------------------------------
PERIOD  MARCH  8,  2000  (DATE  OF  INCEPTION)  THROUGH  DECEMBER  31,  2000

1.     SUMMARY  OF  BUSINESS  AND  SIGNIFICANT  ACCOUNTING  POLICIES
BACKGROUND  -  On March 7, 2000, EIN Acquisition Corporation ("EIN Acquisition")
closed  on  a Tender Offer ("Tender Offer") for all of the outstanding shares of
Echelon  International  Corporation  ("Echelon")  for a cash price of $34.00 per
share.  Immediately  after the close of the Tender Offer, EIN Acquisition merged
into  Echelon  (the  "Merger"),  with  Echelon  being  the  surviving  entity.

In conjunction with the Tender Offer, Echelon had entered into various contracts
to  sell or convey various real estate assets and investments in two real estate
joint  ventures  to  third  parties.  Subsequent to the Merger on March 8, 2000,
Echelon  closed  on  existing contracts to sell or convey its real estate assets
and  investments in two real estate joint ventures.  Specific real estate assets
and  investments  in  two  real  estate  joint  ventures  were  sold  to Echelon
Residential  LLC  ("Echelon  Residential"),  a  wholly  owned  limited liability
subsidiary  of  Echelon Residential Holdings LLC ("Echelon Residential Holdings"
or  the  "Company").  Echelon  Residential will own, manage, and develop or sell
these  purchased  multi-family  residential  properties.

The  acquisition  of  the  assets by Echelon Residential was accounted for as an
asset  purchase under Accounting Principles Board Opinion No. 16 ("APB No. 16").
In  accordance with APB No. 16, Echelon Residential allocated the total purchase
price to the assets acquired and liabilities assumed based on the estimated fair
market  values  at  the  date  of  acquisition.  Since the purchase price of the
business  was  less  than  the fair market value of the net assets acquired, the
credit  excess  was  allocated on a pro-rata basis to the real estate, corporate
equipment  and  the  investment in an unconsolidated joint venture. There are no
contingencies  or  other  matters that could materially affect the allocation of
the purchase cost.  The results of operations of the acquired real estate assets
and  investments  in  two  real  estate  joint  ventures  are  included  in  the
consolidated  results of Echelon Residential Holdings from the acquisition date.
The  Company's  summarized  consolidated  balance  sheet,  reflecting  the above
acquisition  of  assets,  as  of  March  8,  2000  is  as  follows:
<TABLE>
<CAPTION>

<S>                                           <C>
Assets:
  Real estate                                 $34,164,672
  Cash and cash equivalents                     7,919,247
  Investment in unconsolidated joint venture    1,211,929
  Other assets                                    832,417
                                              -----------

Total assets                                  $44,128,265
                                              ===========

Liabilities and Members' Equity:
  Accounts payable and other liabilities      $ 6,883,424
  Construction loans                              251,975
  Notes payable                                34,269,890
                                              -----------

Total liabilities                              41,405,289
Minority interest                               2,527,750
Members' equity                                   195,226
                                              -----------

Total liabilities and members' equity         $44,128,265
                                              ===========
</TABLE>



<PAGE>

The  Company's  fiscal  year  end  is  December  31.

DESCRIPTION  OF  BUSINESS  - Echelon Residential Holdings was formed on February
29,  2000,  under the laws of the state of Delaware and operates in one industry
segment:  owning,  leasing, developing, and managing real estate.  There were no
activities  of Echelon Residential Holdings from February 29, 2000 through March
8,  2000.  The Company is governed by its Amended and Restated Limited Liability
Company  Agreement  ("the  Agreement")  dated  June 23, 2000.  At March 8, 2000,
members'  equity  included capital contributions from the initial members of the
Company,  James  A. Coyne and Charles E. Cobb, Jr. ("Initial Members"), who made
collective  capital  contributions  of  $195,226.  On  June  23,  2000,  the
participating  members,  Darryl  A. LeClair and Susan G. Johnson ("Participating
Members")  made  capital  contributions  totaling  $2,651,162.  The  collective
Participating  Members'  capital  contributions are comprised of Participating A
Capital of $2,591,093, Participating B Capital of $45,052 and additional capital
contributions  of  $15,017.

Subsequent  to  the  initial  capital  contributions  above,  the  Agreement was
executed and includes a provision whereby the members have no further obligation
to  contribute  additional  amounts  of  capital to the Company.  If the Company
requires additional funds, the Board of Managers is to notify the members.  Each
member  has  the  right to contribute a pro rata share of such additional funds,
based  on  the  relative equity contributions made by each member.  In addition,
the  liability  of  the  members of the Company is limited to the members' total
capital  contributions.

In  accordance  with  the Agreement, the Participating Members earn a cumulative
compounding  annual  return  on  their unreturned capital (as defined), at a per
annum  rate equal to 14% for Participating A capital and 15% for Participating B
capital,  commencing  on  June  23, 2000.  Preferred returns will be paid to the
Participating  Members in accordance with the terms of the Agreement.  Payout of
preferred  returns (if any) is contingent upon the cumulative performance of the
Company.  See  Note  9  -  Commitments  and  Contingencies.

Per  the  Agreement,  the  Company  is  to  distribute  its  cash  flow (if any)
periodically, but not less frequently than quarterly.  The losses and profits of
the  Company  are  generally  allocated  to  the  members  as  follows:

a)     losses  are generally allocable 77.9% to members other than Participating
Members  and  22.1%  to  Participating  Members,  and

b)     profits are generally allocated the same way except for a priority income
allocation  to  the  Participating  Members to cover priority cash distributions
made  on  their  Participating  Capital.

PRINCIPLES OF CONSOLIDATION - The accompanying consolidated financial statements
include  the  accounts  of  Echelon  Residential  Holdings,  its  wholly  owned
subsidiary  and  a  60% interest in a joint venture.  All  intercompany balances
have  been  eliminated.  Investments  for  which  the  Company  has a 20% to 50%
ownership  interest  are  accounted  for  using  the  equity  method.
The  Company  has  recorded  a  minority  interest in the Company's consolidated
financial  statements  to  reflect  the  ownership  of  its partner in the joint
venture.

ESTIMATES  -  The  preparation  of  financial  statements  in  conformity  with
accounting  principles  generally  accepted  in  the  United  States  of America
requires  management to make estimates and assumptions that affect the amount of
assets  and  liabilities  and disclosure of contingent assets and liabilities at
the  date  of  the financial statements and the amounts of revenues and expenses
during  the  reported  period.  Actual

<PAGE>
results  could  differ  from those estimates.  Significant estimates include the
recoverability  of  real  estate  held  for  sale.

CASH  AND  CASH  EQUIVALENTS  -  Cash and cash equivalents include cash on hand,
demand  deposits,  and  short-term investments with original maturities of three
months  or  less.

RESTRICTED  CASH  - Restricted cash represents security deposits at multi-family
residential  communities  held  in  separate  noninterest-bearing  depository
accounts.

RESTRICTED  INVESTMENTS  -  Restricted  investments  represents  certificates of
deposit  with  maturities greater than three months.  These investments are held
by  financial  institutions  that  require  such  deposits in support of standby
letters  of  credit.

REAL  ESTATE  -  Real  estate additions are recorded at cost.  Interest and real
estate  taxes  incurred  during  construction  periods  are  capitalized  and
depreciated  on the same basis as the related assets.  Costs directly related to
the acquisition, development or improvement of real estate, and certain indirect
development  costs  have also been capitalized.  Depreciation is calculated on a
straight-line  basis  over  the  estimated  lives  of  the  assets  as  follows:
<TABLE>
<CAPTION>

<S>                                 <C>
                                    ESTIMATED
                                    USEFUL LIVES

Buildings                               35 years
Furniture, fixtures, and equipment    3-10 years
</TABLE>



IMPAIRMENT  OF  LONG-LIVED  ASSETS  -  The  carrying value of long-lived assets,
including  property  and  equipment,  will  be  reviewed for impairment whenever
events  or  changes  in circumstances indicate that the recorded value cannot be
recovered  from  undiscounted  future  cash  flows.

REVENUE  RECOGNITION - The Company recognizes revenue on the sale of real estate
properties  when  title  has passed to the buyer and all contingencies have been
removed.  Rental  revenues,  management  fees, and developer fees are recognized
when  earned.

INCOME  TAXES - Under the provisions of the Internal Revenue Code and applicable
state  laws, the Company is not directly subject to income taxes; the results of
its  operations  are  included  in  the  tax  returns  of  its  members.

NEW  ACCOUNTING  PRONOUNCEMENTS  -  SFAS  No.  133,  Accounting  for  Derivative
Instruments  and Hedging Activities, is effective for all fiscal years beginning
after  June  15,  2000.  SFAS  No.  133,  as amended, establishes accounting and
reporting  standards  for  derivative instruments and hedging activities.  Under
SFAS  No.  133,  certain contracts that were not formerly considered derivatives
may  now  meet the definition of a derivative.  The Company adopted SFAS No. 133
effective  January  1,  2001.  There  was  no  impact on the Company's financial
position, results of operations or liquidity resulting from the adoption of SFAS
No.  133.

Effective  March 8, 2000 (date of inception), the Company adopted the provisions
of  Securities  and  Exchange  Commission Staff Accounting Bulletin 101, Revenue
Recognition  in  Financial  Statements  ("SAB  No.  101").  SAB No. 101 provides
guidance  for  the  recognition,  presentation,  and  disclosure  of  revenue in
financial  statements.  The  adoption  of  SAB  No.  101  had  no  impact on the
Company's  financial  statements.

<PAGE>
RECLASSIFICATIONS  -  Certain  amounts  previously reported in the March 8, 2000
consolidated balance sheet have been reclassified to conform to the December 31,
2000  presentation.

2.     REAL  ESTATE  -  NET
As  of  December  31,  2000,  real  estate  consists  of  the  following:
<TABLE>
<CAPTION>

<S>                                                      <C>
Land and land improvements held for development or sale  $15,676,581
                                                         ------------

Real estate under development:
  Land and land improvements                               8,302,770
  Construction in progress                                14,694,874
                                                         ------------

                                                          22,997,644
                                                         ------------

Income producing real estate:
  Land and land improvements                               2,303,890
  Buildings and improvements                              19,720,463
  Equipment and other                                        484,752
  Accumulated depreciation                                   (91,128)
                                                         ------------

                                                          22,417,977
                                                         ------------

                                                         $61,092,202
                                                         ============
</TABLE>



For  the period March 8, 2000 (date of inception) through December 31, 2000, the
Company  recorded  a write-down of land held for development or sale of $635,437
in  the consolidated statement of operations.  Land held for development or sale
was  determined  to have been impaired because the estimated cash flows are less
than the carrying value of the two parcels of land.  The estimated fair value of
these  two  parcels  of  land  was  based  on letters of intent from third-party
purchasers, dated October 2000 and December 2000, to purchase the two parcels of
land.

As  of  December  31,  2000,  the  Company's land and land improvements held for
development  or  sale  includes five parcels of improved and unimproved land for
the development of multi-family residential communities.  The land is located in
urban areas in Memphis, Tennessee; Dallas, Texas; Denver, Colorado; and Colorado
Springs,  Colorado.

As  of  December  31, 2000, real estate under development includes the following
three  multi-family  residential  communities:
<TABLE>
<CAPTION>

<S>                      <C>          <C>       <C>      <C>           <C>
                                   .         .        .  CONSTRUCTION  ACTUAL/ESTIMATED
                                   .  RENTABLE  LAND     COMMENCEMENT  DATE FIRST UNITS
PROJECT NAME             LOCATION     UNITS     ACREAGE  DATE          AVAILABLE
-----------------------  -----------  --------  -------  ------------  ----------------

ECHELON AT THE BALLPARK  Memphis, TN       385        5  Q1 2000       Q1 2001
ECHELON AT LAKESIDE      Plano, TX         181       12  Q3 1999       Q3 2000
ECHELON AT UPTOWN        Orlando, FL       244        3  Q2 2001       Q2 2002
</TABLE>



<PAGE>
As  discussed  in  Note 6, Investment in Consolidated Joint Venture Partnership,
ECHELON  AT  LAKESIDE commenced operations during the period March 8, 2000 (date
of  inception)  through  December  1,  2000 and portions of the project remained
under  construction  as  of  December  31,  2000.

As  of  December 31, 2000, real estate includes $606,990 of interest capitalized
during  the  period March 8, 2000 (date of inception) through December 31, 2000.


3.     INVESTMENT  IN  UNCONSOLIDATED  JOINT  VENTURE
In  July  1999,  Fannie  Mae's American Communities Fund agreed to invest with a
wholly  owned  subsidiary  of  Echelon  in  the development of ECHELON AT CHENEY
PLACE,  a  303-unit  multi-family  residential  community  currently  under
construction  in downtown Orlando, Florida.  Echelon's 20% interest in the joint
venture  was  purchased  by  Echelon  Residential,  in conjunction with the real
estate  assets  purchased  as  discussed  in  Note  1,  Summary  of Business and
Significant Accounting Policies.  The Company accounts for its investment in the
joint  venture  under  the  equity method.  Concurrent with the execution of the
joint  venture  agreement with Fannie Mae's American Communities Fund, the joint
venture executed an agreement with Wachovia Bank, N.A. for a $21,500,000 loan to
fund  the  construction  of  ECHELON AT CHENEY PLACE.  The loan is guaranteed by
Echelon  Residential.

Construction of ECHELON AT CHENEY PLACE began in late July 1999 and construction
continued  on portions of the project through December 31, 2000.  For the period
March  8,  2000  (date  of  inception)  through  December  31, 2000, the Company
recorded  its  share  of  losses  for  ECHELON AT CHENEY PLACE, from the initial
operations  of  the  project, as a reduction of the investment in unconsolidated
joint  venture.  As  of  December  31,  2000,  total  capital  expenditures  and
construction  loan  draws  for  the  project  were  $24,834,193 and $18,408,921,
respectively.  Through December 31, 2000, the Company's capital contributions to
the  joint  venture  totaled  $1,386,000.  The  total of net losses and purchase
price  adjustment allocated to the investment in unconsolidated joint venture is
$322,094.

4.     CONSTRUCTION  LOANS
As  of  December  31,  2000, the Company's construction loans outstanding are as
follows:
<TABLE>
<CAPTION>

<S>                                   <C>
Bank of America                       $17,614,845
First Union National Bank of Florida    9,222,895
                                      -----------

 .                                     $26,837,740
                                      ===========
</TABLE>



The Company has a $20,000,000 construction loan with Bank of America to fund the
construction  of  ECHELON  AT  LAKESIDE.  The  loan  is  guaranteed  by  Echelon
Residential.  The  interest rate is LIBOR plus 1.85% (8.4875% as of December 31,
2000),  and  the  loan  matures in September 2002.  As of December 31, 2000, the
Company  has  made  $17,614,845 of construction draws on this loan.  See further
discussion  of  the  development  of  ECHELON  AT  LAKESIDE  included in Note 6,
Investment  in  Consolidated Joint Venture Partnership.  Accrued interest on the
Bank  of  America  construction  loan  is  $125,685  as  of  December  31, 2000.
The  Company  has a $26,075,000 construction loan with First Union National Bank
of  Florida  to  fund  the  construction  of ECHELON AT THE BALLPARK, a 385-unit
multi-family  residential  community  currently  under  construction in downtown
Memphis,  Tennessee.  The  loan  is  guaranteed  by  Echelon  Residential.  The
interest rate is LIBOR plus 1.65% (8.2125% as of December 31, 2000) with monthly
interest  payments  required through the term of the loan, which expires on June
2002.  As  of  December  31,  2000,  the  Company has made construction draws of
$9,222,895.  Accrued interest on the First Union National Bank construction loan
is  $8,258  as  of  December  31,  2000.

<PAGE>
The  Company's  significant  financial  covenants  include minimum net worth and
liquidity  requirements.  As of December 31, 2000, the Company was in compliance
with  all  financial  covenants  contained  in  its  debt  agreements.

In  the  opinion of management, the carrying value of the Company's construction
loans  approximate  their fair value based on management's estimates for similar
issues,  giving  consideration  to  quality,  interest rates, maturity and other
significant  characteristics.  Although  management  is not aware of any factors
that  would  significantly  affect  the estimated fair value of the construction
loans,  the amounts have not been comprehensively revalued for purposes of these
consolidated  financial statements since December 31, 2000 and current estimates
of  fair  value  may  differ  significantly.
See  Note  10,  Subsequent Event, for discussion of a construction loan executed
for  the  construction  of  ECHELON  AT  UPTOWN,  in  February  2001.

5.     NOTES  PAYABLE

As  of  December  31,  2000,  notes  payable  outstanding  are  as  follows:
<TABLE>
<CAPTION>

<S>                                                             <C>
American Income Partners V-A Limited Partnership                $ 2,160,000
American Income Partners V-B Limited Partnership                  5,700,000
American Income Partners V-C Limited Partnership                  2,390,000
American Income Partners V-D Limited Partnership                  2,730,000
American Income Fund I-A, a Massachusetts  Limited Partnership    1,650,000
American Income Fund I-B, a Massachusetts Limited Partnership     1,310,000
American Income Fund I-C, a Massachusetts Limited Partnership     2,780,000
American Income Fund I-D, a Massachusetts Limited Partnership     3,050,000
American Income Fund I-E, a Massachusetts Limited Partnership     4,790,000
AIRFUND International Limited Partnership                         1,800,000
AIRFUND II International Limited Partnership                      3,640,000
                                                                -----------

Subtotal                                                         32,000,000
Series A Note                                                     1,684,211
Series B Notes                                                      585,679
Note payable - Echelon Development Holdings LLC                     770,000
                                                                -----------

                                                                $35,039,890
                                                                ===========
</TABLE>



On  March  8,  2000,  the  Company executed $32,000,000 in notes payable with 11
partnerships.  The  Company  contributed  the proceeds from the notes payable to
Echelon  Residential  to  acquire  various  real  estate assets from Echelon, as
discussed  in  Note  1, Summary of Business and Significant Accounting Policies.
These  partnerships are managed by their general partners who have engaged Equis
Financial  Group  ("EFG")  as  the partnerships' manager.  Mr. James A. Coyne is
Executive  Vice  President of EFG and is an equity investor in the Company.  Mr.
Coyne,  in  his  individual capacity, is the only equity investor in the Company
related  to  EFG.  These  notes  payable  have  a term of 30 months, maturing on
September  8,  2002,  and an annual interest rate of 14% for the first 24 months
and 18% for the final sixmonths. No principal payments are required prior to the
scheduled  maturity.  Interest  accrues  and compounds monthly and is payable at
maturity. Accrued interest on these notes is $3,907,798 as of December 31, 2000.
The  Company  has assigned and pledged a security interest in all of its rights,
title, and interest in its membership interests in Echelon Residential to the 11
partnerships  as  collateral.

On  March  8,  2000,  the  Company  executed  a Series A Note with Cobb Partners
Limited.  The  Series  A  Note has a term of 30 months, maturing on September 8,
2002, and an annual interest rate of 14% for the first 24 months and 18% for the
final  six  months.  No  principal  payments are required prior to the scheduled
maturity.  Accrued  interest on the Series A Note is $205,674 as of December 31,
2000.  Interest  accrues  and compounds monthly and is payable at maturity.  The
Company also executed Series B Notes with several individuals, who are employees
or investors of EFG.  The Series B Notes have an annual interest rate of 15% and
mature  on  June  30,  2004.  No  principal  payments  are required prior to the
scheduled  maturity.  Interest  accrues  and compounds monthly and is payable at
maturity.  The  Series B Notes are subordinated to the $32,000,000 notes payable
and  the Series A Note.  Accrued interest on the Series B Notes is $76,920 as of
December  31,  2000.

On  December  29,  2000, the Company executed a $770,000 note payable to Echelon
Development Holdings LLC ("Echelon Development Holdings").  The note payable has
a  term of 24 months, maturing on December 29, 2002, and an annual interest rate
of 10%.  Interest accrues and compounds daily and is payable on December 31st of
each  year  the  note payable is outstanding.  The Company repaid the note, plus
interest  of  $6,751,  on  January  30,  2001.
In  the opinion of management, the carrying value of the Company's notes payable
approximates  the fair value based on management's estimates for similar issues,
giving  consideration to quality, interest rates, maturity and other significant
characteristics.

6.     INVESTMENT  IN  CONSOLIDATED  JOINT  VENTURE  PARTNERSHIP
In  September  1999,  Echelon entered into a joint venture agreement with Turner
Heritage  Investments,  Ltd.  ("Turner")  for  the  development  of  ECHELON  AT
LAKESIDE,  a  181-unit  multi-family  residential  community  currently  under
construction  in  Plano, Texas, which is near Dallas.  Echelon's 60% interest in
the  joint venture was purchased by Echelon Residential, in conjunction with the
transaction  discussed in Note 1, Summary of Business and Significant Accounting
Policies.  Construction  of  ECHELON  AT  LAKESIDE  began  in  October  1999 and
continued  on portions of the project through December 31, 2000.  As of December
31,  2000,  total  capital  expenditures  for  the  project  were  $23,927,413.

Through  December  31,  2000,  the  Company  has  made  capital contributions of
$2,592,000  and  Turner  has  contributed land valued at $2,592,000 to the joint
venture.  The  Company's  interest  represents  a  controlling  interest,  and
accordingly, for financial reporting purposes, the assets, liabilities, retained
deficit,  and  current period results of operations of the joint venture for the
period March 8, 2000 (date of inception) through December 31, 2000, are included
in  the  Company's  consolidated  financial  statements and Turner's partnership
interest  in  the  joint  venture has been recorded as a minority interest.  See
further discussion of debt financing for ECHELON AT LAKESIDE included in Note 4,
Construction  Loans.

7.     RELATED  PARTY  TRANSACTIONS
In  conjunction  with  the  purchase  of Echelon's interest in the joint venture
formed  for  the  development  of  ECHELON AT LAKESIDE, Echelon Residential also
assumed  the development agreement, an asset management agreement and a property
management  and  leasing  agreement  with  Lakeside Baywater Enterprises Limited
Partnership,  the joint venture partnership.  In accordance with the development
agreement,  Echelon Residential has been engaged as the developer for ECHELON AT
LAKESIDE  and  receives  a  development  fee,  payable  in  arrears,  in monthly
installments  of  $44,371.  In  accordance  with the asset management agreement,
Echelon  Residential  receives  a  monthly  asset  management  fee,  computed in
arrears, equal to 1% of the ECHELON AT LAKESIDE monthly gross income.  Under the
terms of the property management and leasing agreement, Echelon Residential also
receives  a  monthly  management  fee,  computed  in arrears, equal to 4% of the
ECHELON  AT  LAKESIDE  monthly  gross  income.

<PAGE>
For  the  period  March  8,  2000 (date of inception) through December 31, 2000,
Echelon  Residential  recognized  $388,212 in development, asset management, and
property  management  revenues  from  ECHELON  AT  LAKESIDE.

In  conjunction  with  the  purchase  of Echelon's interest in the joint venture
formed  for the development of ECHELON AT CHENEY PLACE, Echelon Residential also
assumed  agreements  which  include the payment of a development fee, a property
management  and  leasing  agreement  and an incentive management fee with Cheney
Place  LLC, the joint venture partnership.  In accordance with these agreements,
Echelon  Residential  has  been  engaged  as the developer for ECHELON AT CHENEY
PLACE  and  receives  a  monthly  development  fee  equal  to  5%  of  the  hard
construction  costs  incurred during the month.  Echelon Residential is also the
property  manager  and leasing agent for the property and will receive a monthly
management  fee,  computed  in arrears, equal to $7,500 per month for two months
prior  to  the  opening  of the clubhouse.  For the next nine months thereafter,
Echelon  Residential  will receive the greater of a) 3% of the effective monthly
gross  income  or  b)  3%  of  the  effective monthly gross income that would be
collected  if 75% of ECHELON AT CHENEY PLACE were occupied at rents equaling the
average  pro  forma  base  rent.  Thereafter, the monthly management fee will be
calculated  as  3%  of  the  effective monthly gross income of ECHELON AT CHENEY
PLACE.  The incentive management fee is equal to 2% of ECHELON AT CHENEY PLACE'S
effective  gross  income,  as  defined.  For  the  period March 8, 2000 (date of
inception) through December 31, 2000, Echelon Residential recognized $392,695 in
development,  property  management  and  incentive  management fee revenues from
ECHELON  AT  CHENEY  PLACE.

Echelon  Property  Management  LLC,  a  wholly  owned  subsidiary  of  Echelon
Residential, has contracted to manage several operating multi-family residential
communities currently leased by Echelon Commercial LLC ("Echelon Commercial"), a
wholly  owned  limited  liability  subsidiary  of  Echelon Development Holdings.
Several  of the equity investors in Echelon Residential Holdings are also equity
investors  in  Echelon Development Holdings.  For the period March 8, 2000 (date
of inception) through December 31, 2000, Echelon Residential recognized $587,908
in  property  management revenues from the management of multi-family properties
leased  by  Echelon  Commercial.

As of December 31, 2000, the Company had accounts receivable balances of $51,880
due  from  Echelon  Commercial LLC, $19,455 due from ECHELON AT CHENEY PLACE and
$44,186  from  other  related  parties.  These amounts were repaid by the end of
February  2001.

8.     RETIREMENT  PLAN
Echelon  Residential is the sponsor of the Echelon 401(k) Savings Plan ("Savings
Plan")  under  Section 401(k) of the Internal Revenue Service Code (the "Code"),
to  which  participants  may  contribute  a  percentage  of  their discretionary
contributions  to  the  Savings  Plan.  The  Company  did  not contribute to the
Savings  Plan  during  the  period  March  8,  2000  (date of inception) through
December  31,  2000.  As  of January 1, 2001, the Company initiated an option in
the  Savings Plan to include a mandatory matching contribution from the Company.

9.     COMMITMENTS  AND  CONTINGENCIES
As  of  December  31,  2000, two multi-family residential communities were under
construction  and  had  remaining  commitments  of $12,985,656 with construction
contractors.

On  December  29,  2000,  the Company executed a $5,000,000 revolving promissory
note with Echelon Development Holdings. The revolving promissory note has a term
of 24 months, maturing on December 29, 2002, and an annual interest rate of 10%.
Interest  accrues  and  compounds  daily and is payable on December 31st of each
year  the  note  is outstanding.  As of December 31, 2000, there were no amounts
outstanding  on  the  revolving  promissory  note.

As discussed in Note 1, Summary of Business and Significant Accounting Policies,
the  Company  maintains preferred return accounts for the Participating Members.
As of December 31, 2000, the preferred return balances for Participating A and B
Capital  were  $198,597  and  $3,709,  respectively.

<PAGE>
These  amounts  have  not  been paid and therefore, have not been reflected as a
reduction of Participating A and B Capital in the December 31, 2000 consolidated
financial  statements.

The  joint  venture  formed for the development of ECHELON AT LAKESIDE maintains
preferred  return  accounts for the limited partners, Echelon LP, a wholly owned
limited liability subsidiary of Echelon Residential, and Turner.  The payment of
any  preferred returns to Echelon LP would be eliminated upon consolidation.  As
of  December  31,  2000,  the  preferred return balance for Turner was $312,069.
This  amount  has  not  been  paid  and,  therefore, has not been reflected as a
reduction  of  member's  equity  in the December 31, 2000 consolidated financial
statements.

10.     SUBSEQUENT  EVENT
In  February 2001, the Company closed on a $18,600,000 loan from SouthTrust Bank
for  the  construction  financing  of ECHELON AT UPTOWN, a 244-unit multi-family
residential  community  to  be  developed  in  downtown  Orlando,  Florida.  The
interest  rate  is LIBOR plus 1.75% with monthly interest payments required over
the  36-month  initial  term  of  the  loan.  The  loan is guaranteed by Echelon
Residential  and  construction  is expected to commence in the second quarter of
2001.

11.     QUARTERLY  RESULTS  OF  OPERATIONS  (UNAUDITED)
The following is a summary of the quarterly results of operations for the period
March  8,  2000  (date  of  inception)  through  December  31,  2000:
<TABLE>
<CAPTION>

<S>             <C>          <C>                   <C>             <C>            <C>
                PERIOD       THREE MONTHS ENDED
                MARCH 8 -                      .               .              .
                             --------------------
                MARCH 31     JUNE 30               SEPTEMBER 30    DECEMBER 31    TOTAL

Total revenues  $  147,078   $           758,673   $     659,867   $  3,664,594   $ 5,230,212
Net loss        $ (328,623)  $        (1,359,326)  $  (1,855,757)  $ (3,162,320)  $(6,706,026)
</TABLE>



12.  MANAGEMENT'S  BUSINESS  PLAN  (UNAUDITED)
As  of  the  fourth  quarter of 2001, the Company's management is pursuing three
principal business strategies to maximize the value of the Company's real estate
assets,  including  the  continued  development  of  the  Company's  real estate
portfolio,  retaining  other  joint  venture  equity  partners  for  real estate
projects  and  selling  of  certain  real  estate  assets.

In  addition,  as  part of a litigation settlement unrelated to the Company that
must  be  approved  by  the  court, EFG has agreed in principle to buy the notes
payable  from  the 11 partnerships for an aggregate of $32,000,000 plus interest
at  7.5% per annum, if they are not repaid prior to or at the scheduled maturity
date.  If  the litigation settlement is approved, the interest rate on the notes
payable  would  be retroactively adjusted to 7.5% simple interest as of March 8,
2000.  EFG  has  also  agreed  in  principle  to forbear any foreclosure action
against the Company and will evaluate the characterization of the notes payable,
which  may include converting the notes payable to long-term debt or equity. See
Note  5,  Notes  Payable.


                                     ******