<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K
                  Annual Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

(Mark one)

[X] Annual report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1999 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 33-30312

                INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
             (Exact name of Registrant as specified in its charter)

     North Carolina                                     56-1669199
(State of Organization)                     (I.R.S. Employer Identification No.)

201 N. Tryon St., Charlotte, North Carolina                             28202
(Address of principal executive offices)                              (Zip Code)


        Registrant's telephone number, including area code (704) 379-9164

        Securities Registered Pursuant to Section 12(b) of the Act: NONE

        Securities Registered Pursuant to Section 12(g) of the Act: NONE

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, to the
best of registrant's knowledge in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date of filing. (See
definition of affiliate in Rule 405.)
Not applicable as all securities are non-voting.

Indicate the number of shares outstanding of each of the issuers' classes of
common stock as of the latest practicable date
               7,650 limited partnership units as of March 9, 2000

Documents Incorporated by Reference:  See Item 14

                    Page 1 of 13 sequentially numbered pages


<PAGE>   2

                                     PART I

ITEM 1 - BUSINESS

         Interstate Land Investors II (the "Registrant" or the "Partnership") is
a North Carolina limited partnership organized as of July 27, 1989 to acquire
for investment and dispose of three tracts of undeveloped land located in York
County, South Carolina (the "Property"). The Property consists of "Tract 1"
(which was subdivided as discussed below), an approximately 91.64 acre tract
fronting on Interstate 77 and Gold Hill Road; "Tract 2", an adjoining (but non
contiguous) approximately 76.74 acre tract with frontage entirely on Interstate
77; and "Tract 3", an approximately 20 acre tract located on U.S. Highway 21 and
contiguous to Tract 2. The General Partners of the Registrant were Performance
Investments, Inc., a North Carolina corporation ("PII"), William Garith Allen
("Allen") and ISC Realty Corporation, a North Carolina corporation ("ISCR").
Allen is the President, a director and a 50% shareholder of PII. ISCR is a North
Carolina corporation wholly owned by Wachovia Securities Inc. ("WSI"). Effective
January 1, 1992, ISCR and Allen assumed the role of co-managing general partner
and PII was converted to a Class A limited partner. In 1997, Allen executed an
assignment of his partnership interests and forfeited his right to subordinated
returns by transferring his interest and PII's interest to ISCR.

         The Registrant offered (the "Offering") a minimum of 5,406 units of
Class A Limited Partnership Interests and a maximum of 9,588 units of Class A
Limited Partnership Interests (the "Units") at $1,000 per Unit pursuant to a
Registration Statement effective September 29, 1989, filed under the Securities
Act of 1933, as amended (the "Act"). As of November 3, 1989, the Registrant had
received aggregate subscriptions for 5,406 Units and accordingly, on November 3,
1989, subscriptions for 5,406 Units were accepted and the Initial Closing
occurred under the Offering and 527 investors were admitted to the Partnership
as Limited Partners. Of the $5,402,640 in gross proceeds received in connection
with the Initial Closing (which amount equals subscription payments for 5,406
Units at $1,000 each less discounts on the purchase of certain Units as
described in the Registration Statement), $668,458 had been applied to sales
commissions and to organization and offering expenses. The balance of the gross
proceeds, $4,734,182, was used to purchase Tracts 2 and 3 and provide working
capital.

         Tract 2 was acquired by the Registrant pursuant to an Option Agreement
that was originally obtained by Performance Service and Finance, Inc. ("PSF")
from unaffiliated individuals. This Option Agreement was subsequently assigned
by PSF to PII and then assigned by PII to the Registrant. Tract 2 was acquired
from unrelated individuals for a purchase price of $2,855,223. In addition, the
Partnership reimbursed PII $116,000 for its carrying costs associated with the
Option Agreement and paid PII $181,363 in additional consideration as an
assignment fee. The total amount paid by the Registrant for Tract 2 was
$3,152,586, not including certain miscellaneous closing costs.

         The Registrant acquired Tract 3 pursuant to an Option Agreement that
was originally obtained by Gold Hill Investment Associates ("Gold Hill"). The
Option Agreement was subsequently assigned by Gold Hill to the Registrant. The
Registrant acquired Tract 3 from an unaffiliated unrelated entity for a purchase
price of $1,400,000. In addition, the Registrant reimbursed Gold Hill $10,750
for its carrying costs associated with the Option Agreement and an

                                       2

<PAGE>   3

additional $14,094 in additional consideration as an assignment fee. The total
amount paid by the Registrant for Tract 3 was $1,424,844, not including certain
miscellaneous closing costs.

         Gold Hill is a North Carolina partnership of which Gold Hill Limited
Partnership, an affiliate of Allen, is a partner. Tract 1 was purchased by Gold
Hill from an unrelated entity in December, 1986 for a purchase price of
$1,800,000. Gold Hill Limited Partnership had an option, until June 30, 1990, to
acquire the partnership interests of the remaining unrelated entities in Gold
Hill, and thus become the sole owner of Tract 1. The Registrant had secured an
option (see discussion below) to purchase Tract 1 from Gold Hill at a purchase
price of $3,622,500.

         During July, 1990, the Registrant requested and received approval from
the limited partners to extend the Partnership offering from July 31, 1990 until
December 31, 1990. During July and August 1990, the Registrant requested and
received limited partner approval to subdivide Tract 1 into four (4) separate
parcels and to allow the Registrant to acquire a portion of the property in the
event proceeds from investor subscriptions were not sufficient to acquire all of
Tract 1. In addition, the seller of Tract 1 had agreed to extend the option to
purchase Tract 1 from September 30, 1990 until December 31, 1990.

         Under the terms of the new Option, in the event the Registrant was
unable to sell the Maximum Offering Amount by December 31, 1990, but the
Registrant had sold a minimum of 7,620 units (the "Secondary Offering Amount")
then the Registrant could purchase Tracts 1A and 1D (and it must purchase Tracts
1A and 1D simultaneously). Additionally, if the Registrant had achieved the
Secondary Offering Amount, purchased Tracts 1A and 1D pursuant to the terms of
the new Option and had sold a minimum of 8,721 Units (the "Tertiary Offering
Amount") prior to December 31, 1990, then the Registrant could purchase Tract
1B. Finally, if the Registrant achieved the Tertiary Offering Amount, and
purchased Tracts 1A, 1B and 1D as herein above provided, and had sold a minimum
of 9,588 Units prior to December 31, 1990, then the Registrant could purchase
Tract 1C.

         The Registrant filed a post effective amendment to the original
prospectus in August, 1990, outlining to the SEC these modifications to the
offering and the amendment to the Partnership Agreement.

         On November 14, 1990, the Partnership received formal approval from the
SEC on the post-effective amendment filed in August, 1990. Therefore, ISCR took
additional subscriptions and was able to close on Parcels 1A and 1D on November
30, 1990. The total cost of the November 30, 1990 acquisition of Subtracts 1A
and 1D was $1,908,605 which included a purchase price of $1,906,517, plus
closing costs of $2,088. The Partnership has determined that no further Units
will be offered, sold and issued pursuant to the Prospectus. The Partnership
filed Post-effective Amendment No. 4 for the purpose of deregistering 1,938
Units of unsold Class A Limited Partnership interests.

         The Registrant's principal investment objectives are to: (1) preserve
and protect capital invested in the Registrant, (2) provide a relatively
low-risk real estate investment through debt-free ownership of the Property, (3)
provide long-term appreciation in the value of the Property, and (4) provide
protection for investors against inflation. The Registrant intends to accomplish
its objectives through holding the Property and subsequently disposing of it at
an appropriate time.

                                       3

<PAGE>   4

         The disposition of the Property by the Registrant may result in
substantial fees to the General Partner and its affiliates. Reference is made to
Item 13 herein for a description of certain transactions between the Registrant
and the General Partner and its affiliates.

         No mortgage indebtedness was incurred in connection with the
acquisition of the Property.

         The Registrant plans to hold the property for future appreciation. It
is not contemplated that the Registrant will undertake construction or
substantial improvements on the Property.

         Upon the sale of all or a portion purchased (i.e., Tracts 2, 3, 1A, and
1D) of the Property by the Registrant, the proceeds of the sale will be
distributed to the investors. The General Partner currently intends to dispose
of the Property purchased within ten to twelve years of the purchase. However,
the investors had a one-time right to direct the Registrant to dispose of the
Property upon the fifth anniversary of the Closing of the Offering (November
1994) for a price not less than $11,104,839, reduced by the net proceeds to the
Registrant from the sale of other parcels within the Property by the Registrant.
If the Registrant was unable to sell the Property by such date at such price,
Allen was obligated to either (i) purchase the Property at such price or (ii)
forfeit his entire subordinated Limited Partner interest and transfer the
remaining General Partner interest to the Limited Partners.

         The Registrant in seeking to secure purchasers for its Property will be
competing with many other real estate investment partnerships as well as
individuals, insurance companies, banks and other entities engaged in real
estate investment activities including, perhaps, certain affiliates of the
General Partner.

         The General Partner currently serves as general partner in over 10
public and private partnerships, which currently own various types of real
property. None of the prior partnerships sponsored by the General Partner or its
affiliates now contemplate the acquisition of any additional properties of the
type purchased by the Registrant. However, the General Partner or its affiliates
may sponsor additional public or private partnerships in the future. In
addition, the General Partner and its affiliates are and will continue to be
engaged in the business of real estate investment, development and management
apart from their involvement in the Registrant.

         Located immediately adjacent to the Property is an approximately 96.74
acre tract owned by Interstate Land Investors I Limited Partnership ("Interstate
I"), a North Carolina limited partnership having the same general partner as the
Registrant. Interstate I acquired the adjacent property on September 30, 1988,
for a purchase price of $4,200,000. Interstate I intends to hold the adjacent
property under the same terms and with the same investment objectives as the
Registrant intends to apply to the Property.

         The General Partner will devote only so much of its time to the
business of the Registrant as in their judgment and experience is reasonably
required. The General Partner is engaged in other activities that also require
its time and attention.

                                       4

<PAGE>   5

         As of December 31, 1999, the Registrant did not directly employ any
persons in a full-time position. Certain employees of the General Partner
performed services for the Registrant during the year.

ITEM 2 - PROPERTY

         The Property is located approximately 12 miles south of the Central
Business District of Charlotte, North Carolina along the I-77 corridor and
approximately 8 miles north of Rock Hill, South Carolina. While the Property is
located in northeastern York County, South Carolina, the Property is considered
a part of the Charlotte MSA. The Property consists of three separate tracts, all
of which are zoned for agricultural use, more particularly described as follows:

         Tract 1 (which was subdivided - See Item 1) is an approximately 91.64
acre tract located in the northeast quadrant of I-77 and Gold Hill Road in York
County, South Carolina. 16.1 acres of Tract 1 lies in a floodplain and the
remaining 76.03 acres are usable and free of rights-of-way. Tract 1 has
approximately 2,200 feet of frontage along Gold Hill Road and 3,600 feet of
frontage along I-77. Electricity and telephone are available to Tract 1.
Municipal water and sewer has been brought to the edge of the Property and would
be made available if the Property were developed. If a sale was to occur, Tract
1 zoning would revert to BD-2 and BD-3 under the York County Zoning Ordinance.
The BD-2 classification is designed to provide for the development of office and
institutional parks in areas free of general commercial activity. The BD-3
classification is designed to provide for retail establishments, such as
department stores and variety stores. Tract 1 was subdivided into four Tracts.
Tract 1A is approximately 17.0 acres; Tract 1B, approximately 24.33 acres; Tract
1C, approximately 19.08 acres; and Tract 1D, approximately 31.23 acres. Tracts
1A and 1D are owned by the Registrant.

         Tract 2 consists of approximately 76.74 acres. Tract 2 has 2,819 feet
of frontage on I-77 and is located north of Tract 1. Tract 2 is not contiguous
to Tract 1. Access to Tract 2 is through Tract 3 to U.S. Highway 21.
Additionally, Tract 2 adjoins a common boundary with the 95 acre tract of land
owned by Interstate I. Electricity and telephone are available to Tract 2. Water
is currently available to Tract 2 by extension through Tract 3. Water and sewer
will be provided by a private utility company with facilities located west of
Tract 2 on the west side of I-77. In addition, Tract 2 can be serviced by the
water and sewer facilities serving the Charlotte Knights baseball stadium. If a
sale was to occur, Tract 2 zoning would revert to UDD, urban development
district, by the York County Council. The purpose of this district is to permit
maximum flexibility in response to market demands in specific areas of the
County. Permitted uses range from residential to business development and
industrial.

         Tract 3 consists of approximately 20 acres of land fronting
approximately 400 feet on U.S. Highway 21 and being contiguous to Tract 2.
Additionally, a portion of the Property is contiguous to the tract owned by
Interstate I. Electricity, telephone, water and sewer are all available to Tract
3. If a sale was to occur, Tract 3 zoning would revert to UDD, urban development
district, by the York County, South Carolina, County Council.

         In December 1999, the Partnership entered into a contract with Crescent
Resources, the real estate arm of Duke Energy Corporation, to sell the
unimproved land for approximately $6,660,000. The potential purchaser deposited
earnest money with a title agency. Under the terms

                                       5

<PAGE>   6

of the contract, the potential purchaser had until March 31, 2000, to complete
their due diligence, making the earliest possible closing date April 20, 2000.
However, on March 17, 2000, Crescent Resources notified the Registrant of its
desire to cancel the contract. Crosland Commercial continues to list the
property for sale.

ITEM 3 - LEGAL PROCEEDINGS

         None.

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

         In December 1999, an official ballot was sent to the Limited Partners
requesting that they vote their "Approval" or "Disapproval" for the proposed
sale of the property. Results of this ballot indicated 56.2% in favor of the
proposed sale.

                                     PART II

ITEM 5 - MARKET FOR REGISTRANT'S SECURITIES AND RELATED
         SECURITY HOLDER MATTERS

         Transfer of the Units is subject to certain restrictions contained in
the Limited Partnership Agreement. There is no established market for the Units
and it is not anticipated that any will occur in the future. The Registrant is
aware of no significant resales of Units since the Initial Closing on November
3, 1989. As of March 9, 2000, 774 persons were record owners of 7,650 Units.

         The Registrant in each year allocates to the investors and the General
Partner any net profit prior to a sale of the Property. Such allocations to the
investors are credited against the preferred return due to them on their
invested capital. Net losses for each year are also allocated to the investors
and the General Partner in accordance with their respective capital accounts.
The Registrant does not intend to make any distributions of available cash prior
to the sale of all or a portion of the Property.

                                       6

<PAGE>   7

ITEM 6 - SELECTED FINANCIAL DATA (AUDITED)

SELECTED STATEMENT OF OPERATIONS DATA

<TABLE>
<CAPTION>
                       Year ended   Year ended   Year ended   Year ended   Year ended
                      December 31, December 31, December 31, December 31, December 31,
                          1999         1998         1997         1996         1995
                          ----         ----         ----         ----         ----

<S>                    <C>           <C>          <C>          <C>          <C>
Interest and Other     $   2,356     $  2,392     $  2,248     $  2,193     $  2,167
 Income
Property write-down       84,310            0            0            0            0
Expenses                  51,880       52,506       44,332       46,116       46,130
                       ---------     --------     --------     --------     --------
Net Loss                (133,834)     (50,114)     (42,084)     (43,923)     (43,963)
                       =========     ========     ========     ========     ========
Net Loss Allocated
 to Class A limited
 partners               (133,817)     (50,108)     (42,079)     (43,918)     (43,958)
                       =========     ========     ========     ========     ========
Net Loss Per
 Class A limited
 partnership unit      $  (17.49)    $  (6.55)    $  (5.50)    $  (5.68)    $  (5.69)
                       =========     ========     ========     ========     ========
</TABLE>

SELECTED BALANCE SHEET DATA

<TABLE>
<CAPTION>
                    December 31,  December 31,  December 31,  December 31,  December 31,
                        1999          1998          1997          1996          1995
                        ----          ----          ----          ----          ----

<S>                  <C>           <C>           <C>           <C>           <C>
Total Assets         $6,492,936    $6,572,386    $6,569,272    $6,567,152    $6,565,623
Total Liabilities       408,918       354,534       301,306       257,102       211,650
                     ----------    ----------    ----------    ----------    ----------
Partner's Capital    $6,084,018    $6,217,852    $6,267,966    $6,310,050    $6,353,973
                     ==========    ==========    ==========    ==========    ==========
</TABLE>


ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITIONS AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

         As of December 31, 1999, the Registrant had $3,443 cash and cash
equivalents on hand. Until the Registrant disposes of the Property, its only
sources of additional capital are loans. The Registrant's ability to maintain
cash adequate to meet its needs will be dependent upon the availability of
financing and successful operations of its real estate investment. The General
Partner anticipates that any future funds necessary for the operations of the
Partnership will be provided by ISCR. As of May 23, 1995, the General Partner,
ISCR, entered into a line of credit agreement in the amount of $150,000 with the
Partnership to provide additional funds as needed. In July of 1998, the line of
credit amount was increased to $175,000 and in August of 1999, the amount was
increased to $250,000. In accordance with the Partnership Agreement, ISCR is

                                       7

<PAGE>   8

entitled to accrue interest on any loans provided to the Partnership at the rate
of prime plus two percent. The balance of the note plus accrued interest at
December 31, 1999, is $230,722.

RESULTS OF OPERATIONS

COMPARISON OF THE YEAR ENDED DECEMBER 31, 1999 TO THE YEAR ENDED DECEMBER 31,
1998

         The Registrant's net loss increased to $133,834 for the year ended
December 31, 1999 compared with $50,114 for the year ended December 31, 1998.
The majority of this increase is attributable to the $84,310 property write-down
in 1999.

         Legal fees decreased by $1,891 to $2,072 in 1999 due to the settlement
of the lawsuit in 1998. Interest expense increased $2,594 to $18,144. This
higher expense was due to the increased borrowings under the note to ISCR during
1999. General and administrative expense decreased $3,550 to a total of $18,333.

COMPARISON OF THE YEAR ENDED DECEMBER 31, 1998, TO THE YEAR ENDED DECEMBER 31,
1997

         The Registrant's net loss increased to $50,114 for the year ended
December 31, 1998 from $42,084 for the year ended December 31, 1997.

         Legal fees in the amount of $3,962 were incurred from pursuing the
claims against W. G. Allen. Interest expense increased $2,134 to a total of
$15,550. This higher expense was due to the increased borrowings under the note
to ISCR during 1998. General and administrative expense increased $3,323 to a
total of $21,883. Additional costs were incurred in 1998 from separate studies
performed to evaluate the current market value and environmental conditions in
the area.

The Year 2000 Issue

         The Registrant determined that the potential consequences of year 2000
would not have a material effect on business, results of operations, or
financial condition. This conclusion was reached after researching computer
programs and third party vendors that are currently used to manage this limited
partnership. The Registrant is not solely reliant upon outside systems or
vendors for record keeping. Information is on file in our offices, which states
that existing computer software is Y2K compliant. The third party vendor
currently used was Y2K compliant by June 30, 1999. The computer hardware and
peripherals located in the Registrant's offices are also Y2K ready. If
necessary, the Registrant can revert to manual methods for bookkeeping, check
writing, preparation of financial statements and investor correspondence. Hard
copies of essential information are available and will continue to be available
well into the year 2000.


ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The response to this Item is submitted as a separate section of this
report.

                                       8

<PAGE>   9


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

         There were no disagreements concerning the December 31, 1999, financial
statements.


                                    PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The Registrant has no directors or executive officers. PII, the former
managing general partner, filed for relief from creditors under Chapter 11 of
the Bankruptcy Code during 1991. Effective January 1, 1992, the general partner
interest of PII was converted to that of a Class A Limited Partner retaining the
same interest in the Partnership's net profit, losses and distributions as it
had as a general partner subject to the same priority of the other Class A
Limited Partners. In 1997, Allen executed an assignment of his partnership
interests and forfeited his right to subordinated returns by transferring his
interest and PII's interest to ISCR.

      Information as to ISCR, the current Managing General Partner, is as
follows:

                                      Information About Directors
Name                                     and Executive Officers
----                                     ----------------------

J. Christopher Boone         Director and President of ISCR. He is 41 years old.

Robert B. McGuire            Treasurer of ISCR. He is 52 years old.

Michael D. Hearn             Director and Secretary of ISCR. He is 47 years old.

Lewis F. Semones, Jr.        Director of ISCR. He is 41 years old.

         J. Christopher Boone is a Managing Director of Wachovia Securities,
Inc. (WSI), an affiliate of ISCR and President of ISCR. Prior to joining the
Selling Agent in 1984, Mr. Boone was a tax specialist for Coopers & Lybrand. He
received a bachelor's degree in business administration with an emphasis in
accounting from the University of North Carolina at Chapel Hill.

         Robert B. McGuire is Treasurer of ISC Realty Corporation. In addition,
he is Senior Vice President and Treasurer of WSI. Mr. McGuire received a B.A. in
Business Administration from Furman University and a Masters in Business
Administration from Emory University.

         Michael D. Hearn has served as Secretary and General Counsel of WSI
since 1985. He is a Senior Managing Director of WSI. Mr. Hearn received a
Bachelor of Science degree in Business Administration and a Juris Doctor from
the University of North Carolina at Chapel Hill. He is Secretary of ISCR. In May
of 1992 he was elected a Director of ISCR.

                                       9

<PAGE>   10

         Lewis F. Semones, Jr. is Senior Managing Director and Chief Financial
Officer of WSI. He is also a director of WSI. Mr. Semones is a graduate of
Lenoir Rhyne College, a Certified Public Accountant and a graduate of the
Securities Industry Institute at The Wharton School of The University of
Pennsylvania. He was elected as a director of ISCR in September, 1997.

         Each officer and director holds office until his death, resignation,
retirement, removal, disqualification or his successor is elected and qualified.

         Effective April 1, 1999, ISC Realty Corporation's parent,
Interstate/Johnson Lane, Inc., merged into Wachovia Corporation. Personnel and
offices continue to operate as usual.


ITEM 11 - EXECUTIVE COMPENSATION

         No remuneration was paid or accrued for the account of any partner,
officer or director of the General Partner during the Partnership fiscal year
ended December 31, 1999.


ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

         As of March 22, 2000, Begley-Hall owned 6.87% of the limited
partnership interests.

         As of March 22, 2000, none of the individual directors and officers of
the General Partner had subscribed for Units.

                                                      Amount and
                                                       Nature of
                                                      Beneficial
Partner Type                 Name & Address            Ownership           Class
------------                 --------------            ---------           -----

Subordinated Limited        ISC Realty Corporation         $100             100%

General Partner             ISC Realty Corporation            0             100%

Class A Limited Partner     ISC Realty Corporation          100             <.1%

Class A Limited Partner     ISC Realty Corporation      150,000             2.0%


ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         During the year ended December 31, 1999, there were no related party
transactions in excess of $60,000.

         During the year ended December 31, 1999, ISCR earned $16,209 for
monitoring the operations of the Registrant on behalf of the investors and
performing certain administrative

                                       10

<PAGE>   11

functions. ISCR is entitled to receive an annual administrative fee equal to
0.25% of the cost of the Property. However, the payment of such administrative
fee is deferred until sale of the Property and return to the investors of their
invested capital plus the preferred return. The deferred portion of this fee may
accrue interest at an interest rate of prime plus 1%.

                                     PART IV

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

         (a)      Financial Statements and Schedules.

                  See Index to Financial Statements included in Appendix A to
                  this Form 10-K. Schedules are omitted because they are not
                  applicable, not required or because the requested information
                  is included in the Financial Statements or notes thereto.

         (b)      Reports on Form 8-K.
                  None.

         (c)      Exhibits.
                  EX-27 - Financial Data Schedule

                                       11

<PAGE>   12

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                      INTERSTATE LAND INVESTORS II
                                      A NORTH CAROLINA LIMITED PARTNERSHIP

                                      BY:  ISC REALTY CORPORATION
                                           GENERAL PARTNER



                                      BY:  /S/ J. CHRISTOPHER BOONE
                                           ------------------------
                                           J. CHRISTOPHER BOONE
                                           PRESIDENT

                                       12

<PAGE>   13

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated:

      Signature                          Title                        Date
      ---------                          -----                        ----


/S/ J. Christopher Boone                                          March 22, 2000
----------------------------                                      --------------
J. Christopher Boone                  Director and
                                      President of
                                      ISC Realty
                                      Corporation



/S/ Michael D. Hearn                                              March 22, 2000
----------------------------                                      --------------
Michael D. Hearn                      Director and
                                      Secretary of
                                      ISC Realty
                                      Corporation



/S/ Lewis F. Semones, Jr.                                         March 22, 2000
----------------------------                                      --------------
Lewis F. Semones, Jr.                 Director of
                                      ISC Realty
                                      Corporation

                                       13


<PAGE>   14




                          INTERSTATE LAND INVESTORS II,
                               LIMITED PARTNERSHIP

                              FINANCIAL STATEMENTS

                            FOR THE THREE YEARS ENDED
                        DECEMBER 31, 1999, 1998 AND 1997





























                           FAULKNER AND THOMPSON, P.A.

                          CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>   15


                          INTERSTATE LAND INVESTORS II,
                               LIMITED PARTNERSHIP

                              FINANCIAL STATEMENTS

                               FOR THE YEARS ENDED
                        DECEMBER 31, 1999, 1998 AND 1997


<PAGE>   16


                          INTERSTATE LAND INVESTORS II,
                               LIMITED PARTNERSHIP
                              FINANCIAL STATEMENTS

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                                TABLE OF CONTENTS



                                                                          PAGE

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS..........................1

BALANCE SHEETS..............................................................2

STATEMENTS OF OPERATIONS....................................................3

STATEMENT OF PARTNERS' CAPITAL..............................................4

STATEMENTS OF CASH FLOWS....................................................5

NOTES TO FINANCIAL STATEMENTS...............................................6


                                     - i -


<PAGE>   17


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



To the Partners of
Interstate Land Investors II Limited Partnership
Charlotte, North Carolina

               We have audited the balance sheets of Interstate Land Investors
II, Limited Partnership (a North Carolina limited partnership) as of December
31, 1999 and 1998 and the related statements of operations, partners' capital
and cash flows for each of the three years in the period ended December 31,
1999. 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 audit.

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

               As discussed in Note 2, the general partner has entered into a
contract to sell all unimproved land held for appreciation. This sale, if
consummated, will occur in the second or third quarter of the year 2000.
Subsequent to the sale, if consummated, the Partnership will liquidate. During
the fourth quarter of 1999, the Partnership recorded a non-cash charge related
to the write-down of its unimproved land to estimated realizable value.


               In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Interstate
Land Investors II, Limited Partnership (a North Carolina limited partnership) as
of December 31, 1999 and 1998 and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1999 in
conformity with generally accepted accounting principles.




Charlotte, North Carolina
January 19, 2000


<PAGE>   18

                          INTERSTATE LAND INVESTORS II,
                               LIMITED PARTNERSHIP
                                 BALANCE SHEETS
                                  DECEMBER 31,

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



                                                      1999              1998
                                                  -----------       -----------


                                     ASSETS


Unimproved land held for appreciation             $ 6,450,000       $ 6,534,310
Cash and cash equivalents                               3,443               849
Accounts receivable - related party                    17,427            17,427
Interest receivable - related party                    22,066            19,800
                                                  -----------       -----------

                                                  $ 6,492,936       $ 6,572,386
                                                  ===========       ===========



                        LIABILITIES AND PARTNERS' CAPITAL


LIABILITIES
     Line-of-credit payable - related party       $   175,000       $   170,655
     Advance from related party                        19,754                --
     Administrative fees payable - related party      158,442           142,233
     Interest payable - related party                  55,722            41,646
                                                  -----------       -----------
                                                      408,918           354,534
                                                  -----------       -----------

PARTNERS' CAPITAL
     Class A limited partners' interest
         (authorized, 9,588 units; issued
         and outstanding, 7,650 units)              6,084,088         6,217,905
     Subordinated limited partner's interest               85                88
     General partners' capital deficiency                (155)             (141)
                                                  -----------       -----------
                                                    6,084,018         6,217,852
                                                  -----------       -----------

                                                  $ 6,492,936       $ 6,572,386
                                                  ===========       ===========


                       See Notes to Financial Statements.


                                      - 2 -




<PAGE>   19

                          INTERSTATE LAND INVESTORS II,
                               LIMITED PARTNERSHIP
                            STATEMENTS OF OPERATIONS
                     FOR THE THREE YEARS ENDED DECEMBER 31,

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

<TABLE>
<CAPTION>
                                                                     1999          1998            1997
                                                                 ---------       --------       --------
<S>                                                              <C>             <C>            <C>
INCOME
    Interest                                                     $   2,356       $  2,392       $  2,248
                                                                 ---------       --------       --------

OPERATING EXPENSES
    Professional fees                                               15,214         14,886         12,176
    Property tax                                                       189            187            180
    Interest expense                                                18,144         15,550         13,416
    General and administrative                                      18,333         21,883         18,560
    Write down of land held for appreciation (note 1 and 2)         84,310             --             --
                                                                 ---------       --------       --------
                                                                   136,190         52,506         44,332
                                                                 ---------       --------       --------

           Net loss                                              $(133,834)      $(50,114)      $(42,084)
                                                                 =========       ========       ========

NET LOSS ALLOCATED TO
    Class A limited partners                                     $(133,817)      $(50,108)      $(42,079)
    Subordinated limited partner                                        (3)            (1)            (1)
    General partners                                                   (14)            (5)            (4)
                                                                 ---------       --------       --------

                                                                 $(133,834)      $(50,114)      $(42,084)
                                                                 =========       ========       ========

Weighted average Class A limited
    partnership units outstanding                                    7,650          7,650          7,650
                                                                 =========       ========       ========

Net loss per weighted average Class A
    limited partnership unit                                     $  (17.49)      $  (6.55)      $  (5.50)
                                                                 =========       ========       ========
</TABLE>


                       See Notes to Financial Statements.


                                     - 3 -

<PAGE>   20

                          INTERSTATE LAND INVESTORS II,
                               LIMITED PARTNERSHIP
                         STATEMENT OF PARTNERS' CAPITAL
           FOR THE THREE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                     SUBORDINATED
                                     CLASS A LIMITED PARTNERS     --------------------
                                     ------------------------     LIMITED     GENERAL
                                       UNITS         AMOUNT       PARTNER     PARTNERS        TOTAL
                                       -----         ------       -------     --------        -----

<S>                                  <C>          <C>             <C>         <C>          <C>
Partners' capital (deficiency) --
    January 1, 1997                    7,650      $ 6,310,092       $ 90       $(132)      $ 6,310,050

Net loss, year ended
    December 31, 1997                     --          (42,079)        (1)         (4)          (42,084)
                                       -----      -----------       ----       -----       -----------

Partners' capital (deficiency) --
    December 31, 1997                  7,650        6,268,013         89        (136)        6,267,966

Net loss, year ended
    December 31, 1998                     --          (50,108)        (1)         (5)          (50,114)
                                       -----      -----------       ----       -----       -----------

Partners' capital (deficiency) --
    December 31, 1998                  7,650        6,217,905         88        (141)        6,217,852

Net loss, year ended
    December 31, 1999                     --         (133,817)        (3)        (14)         (133,834)
                                       -----      -----------       ----       -----       -----------

Partners' capital (deficiency) --
    December 31, 1999                  7,650      $ 6,084,088       $ 85       $(155)      $ 6,084,018
                                       =====      ===========       ====       =====       ===========
</TABLE>


                       See Notes to Financial Statements.


                                     - 4 -





<PAGE>   21

                          INTERSTATE LAND INVESTORS II,
                               LIMITED PARTNERSHIP
                            STATEMENTS OF CASH FLOWS
                     FOR THE THREE YEARS ENDED DECEMBER 31,

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                   1999           1998            1997
                                                                ----------      --------       --------

<S>                                                             <C>             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net loss                                                    $(133,834)      $(50,114)      $(42,084
    Adjustments to reconcile net loss to net cash
        used for operating activities
           Write-down of land held for appreciation                84,310             --             --
           Increase in interest receivable - related party         (2,266)        (2,265)        (2,120)
           Increase in accrued liabilities - related party         30,285         24,904         29,624
                                                                ---------       --------       --------

                Net cash used for operating activities            (21,505)       (27,475)       (14,580)
                                                                ---------       --------       --------

CASH FLOWS FROM FINANCING ACTIVITIES
    Increase in line-of-credit - related party                     24,099         28,324         14,580
                                                                ---------       --------       --------

                Net increase in cash and cash
                  equivalents                                       2,594            849             --

CASH AND CASH EQUIVALENTS, BEGINNING
    OF YEAR                                                           849             --             --
                                                                ---------       --------       --------

CASH AND CASH EQUIVALENTS, END OF YEAR                          $   3,443       $    849       $     --
                                                                =========       ========       ========
</TABLE>


                       See Notes to Financial Statements.


                                     - 5 -

<PAGE>   22

                          INTERSTATE LAND INVESTORS II,
                               LIMITED PARTNERSHIP
                          NOTES TO FINANCIAL STATEMENTS

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

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       ORGANIZATION

         Interstate Land Investors II, Limited Partnership (the Partnership) is
         a North Carolina limited partnership formed, on July 26, 1989, to
         acquire for investment, hold for appreciation and ultimately dispose,
         without substantial improvements, undeveloped land in York County,
         South Carolina. The Partnership acquired 97 acres of such land in
         November 1989, and acquired an additional 48 acres in November 1990.
         The Partnership shall continue its existence without interruption
         subject to the terms and conditions set forth in the partnership
         agreement and the provisions of the Revised Uniform Limited Partnership
         Act of the State of North Carolina.

         Until January 1, 1992, the managing general partner was Performance
         Investments, Inc. (PII), which is 100% owned by Mr. William Garith
         Allen and a family member. Mr. Allen and ISC Realty Corporation (ISCR)
         are also general partners in the Partnership and effective January 1,
         1992, assumed the role of co-managing partners. In November 1991, PII
         consented to the conversion of its interest to that of a Class A
         limited partner, to become effective January 1, 1992. PII, however,
         retains the same interest in the Partnership's net profit, losses and
         distributions as it had as a general partner subject to the same
         priority of the other Class A limited partners. In December, 1993, upon
         the approval of 67% of the Class A limited partners' interest and upon
         meeting certain conditions in the partnership agreement, the partners
         exercised their one-time right to direct the general partners to sell
         the property at a price no less than $11,104,839, reduced by the
         proceeds from any previous sales. The property was to be sold by
         November, 1994, or at that time Mr. Allen would agree to either (i)
         purchase the property from the Partnership on such date at the purchase
         price or, (ii) elect not to purchase the property at the purchase price
         but instead forfeit his right to receive subordinated returns, withdraw
         as a general partner and transfer his general partnership interest to
         ISCR. In 1997 Mr. Allen executed an assignment of his partnership
         interests and forfeited his right to subordinated returns by the
         transfer of his interest and PII's interest to ISCR.

         The general partners are solely responsible for the day-to-day
         management and operation of the property. ISCR is responsible for
         certain administrative functions of the Partnership and beginning in
         November 1989, is entitled to an annual administrative fee equal to
         .25% of the cost of the property acquired. Payment of such
         administrative fee is deferred until the sale of the property and the
         return of the Class A limited partners' invested capital plus their
         preferred return, as defined. Any such deferred fee will accrue
         interest at the prime rate plus 1%. However, because of the uncertainty
         as to the ultimate collection of this interest, ISCR has elected not to
         accrue such interest in the Partnership's financial statements.

       CASH EQUIVALENTS

         For the purposes of the statements of cash flows, the Partnership
         considers all highly liquid investments having maturities of three
         months or less to be cash equivalents. At December 31, 1999 and 1998,
         the Partnership's cash consisted of monies deposited through Wachovia
         Securities, Inc. (a related company to ISCR) in a money market fund.

       UNIMPROVED LAND HELD FOR APPRECIATION

         The costs of acquiring land, including related closing and
         predevelopment costs, are capitalized and will be allocated to cost of
         sales as sales of the property occur. In the fourth quarter of 1999,
         the Partnership recorded a write-down of the carrying amount of their
         property of approximately $84,000 to reflect the general partner's
         estimate of the property's estimated realizable value.


                                     - 6 -

<PAGE>   23

                          INTERSTATE LAND INVESTORS II,
                               LIMITED PARTNERSHIP
                          NOTES TO FINANCIAL STATEMENTS

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

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED

       UNIMPROVED LAND HELD FOR APPRECIATION, CONTINUED

         During 1999, the Partnership entered into a contract to sell its
         primary asset, unimproved land.

       ORGANIZATIONAL AND SYNDICATION COSTS

         Various expenses and fees paid in connection with organizing the
         Partnership (including an organizational fee paid to ISCR amounting to
         $159,000 in 1990 and an additional $66,000 in 1991) have been
         capitalized and amortized using the straight-line method over a
         60-month period. These costs have been fully amortized in prior years.
         Other fees and expenses related to the sale of limited partnership
         interests in the Partnership have been classified as syndication costs
         and include sales commissions paid to Interstate/Johnson Lane
         Corporation, a related company to ISCR, of $377,644 in connection with
         the initial offering in 1989 and $116,305 in connection with the
         secondary offering in 1990.

       INCOME TAXES

         Items of income or loss of the Partnership are included in the income
         tax returns of the partners. Accordingly, the Partnership makes no
         provision for federal and state income taxes.

       NET LOSS PER CLASS A LIMITED PARTNERSHIP UNIT

         Net loss per weighted average Class A limited partnership unit is
         calculated based on the loss allocated to such partners without giving
         consideration to the conversion of PII's general partner interest (see
         Note 6).

       ESTIMATES

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosure of contingent assets and liabilities at the
         date of the financial statements and the reported amounts of revenues
         and expenses during the reporting period. Actual results could differ
         from those estimates.


NOTE 2 - UNIMPROVED LAND HELD FOR APPRECIATION

       PROVISION FOR WRITE-DOWN OF UNIMPROVED LAND

         The general partner periodically reviews the recorded value of its
         long-lived assets to determine if the future cash flows to be derived
         from these assets will be sufficient to recover the recorded asset
         values. During the fourth quarter of 1999, the Partnership recorded a
         non-cash charge of approximately $84,000, or approximately $11 per
         limited partnership unit, to write-down its unimproved land to its
         estimated realizable value.


                                     - 7 -

<PAGE>   24

                          INTERSTATE LAND INVESTORS II,
                               LIMITED PARTNERSHIP
                          NOTES TO FINANCIAL STATEMENTS

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

NOTE 2 - UNIMPROVED LAND HELD FOR APPRECIATION, CONTINUED

       POTENTIAL SALE

         During the fourth quarter of 1999, the Partnership entered into a
         contract to sell the Partnership's primary asset, unimproved land, for
         approximately $6,660,000. The potential purchaser has deposited earnest
         money with a title agency. Under the terms of the contract, the
         purchaser has until March 31, 2000 to complete their due diligence,
         which makes the earliest possible closing date April 20, 2000. After
         that date, the potential purchaser may either cancel the contract or
         extend the closing period for four additional thirty (30) day periods
         by paying additional earnest money for each thirty (30) day extension
         period.


NOTE 3 - ALLOCATIONS AND DISTRIBUTIONS OF NET PROFITS AND LOSSES

         Under the terms of the partnership agreement, net profit and
         distributions of available cash in each year prior to a sale of the
         property will be allocated 99% to the Class A limited partners and 1%
         to the general partners. Net losses shall be allocated among all
         partners in accordance with their respective capital accounts. Special
         allocations are provided for any gains or losses arising from the sale
         of the property and for the related cash distributions.


NOTE 4 - RELATED PARTIES AND RELATED PARTY TRANSACTIONS

         In connection with the initial acquisition of the property in 1989, the
         Partnership paid PII and Gold Hill Investment Associates (a partnership
         of Gold Hill Limited Partnership and an affiliate of Mr. Allen) a total
         of $322,207 for the assignment of options to acquire the two tracts of
         land which comprise the property and for reimbursement of Gold Hill
         Investment Associates' (Gold Hill) and PII's holding costs in the
         options (which totaled approximately $126,750). The total cost, along
         with legal and other acquisition expenses, is included in the land on
         the accompanying balance sheets.

         At December 31, 1999 and 1998, the Partnership had an account
         receivable from PII of $17,427 plus accrued interest receivable of
         $22,066 and $19,800, respectively, related to the reimbursement of
         certain costs incurred in connection with organizing the Partnership
         and with organization of the property. In connection with the consent
         entered into in November 1991 (see Note 1), the amount will be offset
         against any amounts due PII or Mr. Allen in connection with the sale of
         the property.

         In November 1990, the Partnership acquired approximately 48 acres of
         property from Gold Hill at a purchase price of $1,906,517. The partners
         of Gold Hill agreed to accept, as part of the purchase price, 533 units
         of Class A limited partner interests and granted a credit on the
         purchase price of $495,690, which represents the cost of 533 units at
         $1,000 per unit less selling commissions.

         In 1989, ISCR purchased 106 units of Class A limited partner interests
         at the full offering price ($1,000 a unit). In 1990, ISCR contributed
         two-thirds of its fee received for additional organizational costs to
         purchase 44 Class A limited partner interests at $1,000 per unit. These
         units are included in Class A limited partners' interest on the balance
         sheets. Also, the general partners, their affiliates and their
         employees purchased units of Class A limited partner interests at 3.5%
         discount. The total discounts amounted to $385 in 1990 and $3,360 in
         1989, representing 11 and 66 units, respectively.


                                     - 8 -

<PAGE>   25

                          INTERSTATE LAND INVESTORS II,
                               LIMITED PARTNERSHIP
                          NOTES TO FINANCIAL STATEMENTS

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

NOTE 4 - RELATED PARTIES AND RELATED PARTY TRANSACTIONS, CONTINUED

         The Partnership incurred expense of approximately $16,200 in 1999, 1998
         and 1997 for services rendered by ISCR in connection with certain
         administrative functions of the Partnership. Since payment of these
         fees is deferred as described in Note 1, they are included in accrued
         administrative fees in the accompanying balance sheets, and as general
         and administrative expenses in the accompanying statements of
         operations.

         See Note 1 for fees paid to ISCR and its affiliates in connection with
         organizing the Partnership and the subsequent sale of limited
         partnership interests.

         The Partnership has the same general partners of and owns land adjacent
         to Interstate Land Investors I Limited Partnership (Interstate I). The
         property owned by Interstate I is in direct competition with the
         Partnership's property. No financial statement transactions have
         occurred between these Partnerships.


NOTE 5 - LINE-OF-CREDIT FROM RELATED PARTY

         On May 23, 1995, the Partnership obtained a line-of-credit from ISCR to
         utilize as needed. Interest is charged on this line-of-credit at 2%
         above the announced prime lending rate of Bank of America, resulting in
         a rate of 10.25%, 9.75% and 10.5% at December 31, 1999, 1998 and 1997,
         respectively. ISCR has received a mortgage and assignment of rents and
         leases on the property as security. Interest shall accrue on this
         line-of-credit and shall be paid along with the outstanding principal
         balance on the earlier of:

         o        Sale or disposition of all or any portion or part of the
                  property securing the mortgage instrument,

         o        the date ISCR is removed as managing general partner of the
                  Partnership, or

         o        the date the Partnership terminates its legal existence.

         This agreement with ISCR requires that the Partnership comply with
         certain covenants, which are not financial in nature.

         During the years ended December 31, 1999, 1998 and 1997, interest
         expense of $4,069, $6,855 and $0 was paid to ISCR.


NOTE 6 - RECONCILIATION OF FINANCIAL STATEMENT NET LOSS TO TAXABLE LOSS

         A reconciliation of financial statement and taxable loss is as follows:

<TABLE>
<CAPTION>
                                               1999            1998          1997
                                            ---------       --------       --------
<S>                                         <C>             <C>            <C>
Financial statement net loss                $(133,834)      $(50,114)      $(42,084)
Less:  Temporary non-taxable
             income from related party         (2,266)        (2,266)        (2,120)
Plus:  Temporary non-deductible
           expenses to related party           30,385         24,904         29,623
Plus:  Write-down of land held for
           appreciation                        84,310             --             --
                                            ---------       --------       --------

    Taxable loss                            $ (21,505)      $(27,476)      $(14,581)
                                            =========       ========       ========
</TABLE>

                                     - 9 -

<PAGE>   26

                          INTERSTATE LAND INVESTORS II,
                               LIMITED PARTNERSHIP
                          NOTES TO FINANCIAL STATEMENTS

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

NOTE 7 - POTENTIAL LIQUIDATION OF PARTNERSHIP

         Should the sale of the unimproved land held for appreciation (see Note
         2) be consummated, the Partnership will be liquidated during the year
         ended December 31, 2000.



                                     - 10 -