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

                                    FORM 10-Q


(Mark One)

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

For the quarterly period ended      June 30, 1997

                                       OR

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

For the transition period from ________________ to ________________

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

For Quarter Ended June 30, 1997                   Commission File No. 33-42946

                             AFG Investment Trust D
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

Delaware                                                    04-3157232
----------------------------------------                   ---------------------
(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

98 North Washington Street, Boston, MA 02114
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)

     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 |_|

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

     Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court 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 |_| No |_|

<PAGE>

                             AFG Investment Trust D

                                    FORM 10-Q

                                      INDEX

                                                                            Page
                                                                            ----

PART I.     FINANCIAL INFORMATION:

   Item 1.  Financial Statements

      Statement of Financial Position
         at June 30, 1997 and December 31, 1996                              3

      Statement of Operations
         for the three and six months ended June 30, 1997 and 1996           4

      Statement of Cash Flows
         for the six months ended June 30, 1997 and 1996                     5

      Notes to the Financial Statements                                   6-10

   Item 2.  Management's Discussion and Analysis of Financial
            Condition and Results of Operations                          11-15

PART II. OTHER INFORMATION:

      Items 1 - 6                                                           16


                                       2
<PAGE>

                             AFG Investment Trust D

                         STATEMENT OF FINANCIAL POSITION
                       June 30, 1997 and December 31, 1996

                                   (Unaudited)

                                                        June 30,    December 31,
                                                          1997          1996
                                                      -----------   ------------
ASSETS

Cash and cash equivalents                             $10,311,010   $ 6,640,347
                                                      
Rents receivable                                        3,777,756     3,347,306
                                                      
Accounts receivable - affiliate                           377,226     3,845,655
                                                      
Equipment at cost, net of accumulated depreciation    
 of $34,384,660 and $29,093,445 at June 30, 1997      
 and December 31, 1996, respectively                   54,568,599    61,357,491
                                                      
Organization costs, net of accumulated amortization   
 of $3,750 and $3,250 at June 30, 1997                
 and December 31, 1996, respectively                        1,250         1,750
                                                      -----------   -----------
                                                      
      Total assets                                    $69,035,841   $75,192,549
                                                      ===========   ===========
                                                      
                                                      
LIABILITIES AND PARTICIPANTS' CAPITAL                 
                                                      
Notes payable                                         $27,191,657   $32,827,977
Accrued interest                                          698,586       727,187
Accrued liabilities                                        16,225        23,250
Accrued liabilities - affiliate                            98,413       214,247
Deferred rental income                                    154,822       200,836
Cash distributions payable to participants                314,216       314,216
                                                      -----------   -----------
                                                      
      Total liabilities                                28,473,919    34,307,713
                                                      -----------   -----------
                                                      
Participants' capital (deficit):                      
 Managing Trustee                                         (66,094)      (62,865)
 Special Beneficiary                                     (552,524)     (525,884)
 Beneficiary Interests (2,089,030 Interests;          
 initial purchase price of $25 each)                   41,180,541    41,473,585
                                                      -----------   -----------
                                                      
      Total participants' capital                      40,561,922    40,884,836
                                                      -----------   -----------
                                                      
      Total liabilities and participants' capital     $69,035,841   $75,192,549
                                                      ===========   ===========
                                                     
                   The accompanying notes are an integral part
                         of these financial statements.


                                       3
<PAGE>

                             AFG Investment Trust D

                             STATEMENT OF OPERATIONS
            for the three and six months ended June 30, 1997 and 1996

                                   (Unaudited)

<TABLE>
<CAPTION>
                                          Three Months                Six Months
                                         Ended June 30,              Ended June 30,
                                       1997         1996           1997          1996
                                   -----------   -----------   -----------   ------------
<S>                                <C>           <C>           <C>           <C>         
Income:

   Lease revenue                   $ 4,830,964   $ 5,528,992   $ 9,590,517   $ 11,129,692

   Interest income                     124,987        33,028       246,138         46,849

   Loss on sale of equipment           (85,952)       (1,442)      (90,898)       (92,007)
                                   -----------   -----------   -----------   ------------

        Total income                 4,869,999     5,560,578     9,745,757     11,084,534
                                   -----------   -----------   -----------   ------------

Expenses:

   Depreciation and amortization     3,070,399     3,539,297     6,212,518      7,081,212

   Interest expense                    651,951       870,658     1,306,943      1,763,330

   Equipment management fees
     - affiliate                       216,036       243,544       435,717        490,472

   Operating expenses - affiliate       87,585        96,648       228,187        260,243
                                   -----------   -----------   -----------   ------------

        Total expenses               4,025,971     4,750,147     8,183,365      9,595,257
                                   -----------   -----------   -----------   ------------

Net income                         $   844,028   $   810,431   $ 1,562,392   $  1,489,277
                                   ===========   ===========   ===========   ============

Net income
  per Beneficiary Interest         $      0.37   $      0.35   $      0.68   $       0.65
                                   ===========   ===========   ===========   ============

Cash distributions declared
  per Beneficiary Interest         $      0.41   $      0.31   $      0.82   $       0.63
                                   ===========   ===========   ===========   ============
</TABLE>

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


                                       4
<PAGE>

                             AFG Investment Trust D

                             STATEMENT OF CASH FLOWS
                 for the six months ended June 30, 1997 and 1996

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                          1997           1996
                                                      ------------   -----------

<S>                                                   <C>            <C>        
Cash flows from (used in) operating activities:
Net income                                            $  1,562,392   $ 1,489,277

Adjustments to reconcile net income to
 net cash from operating activities:
     Depreciation and amortization                       6,212,518     7,081,212
     Loss on sale of equipment                              90,898        92,007

Changes in assets and liabilities
 Decrease (increase) in:
     rents receivable                                     (430,450)        4,061
     accounts receivable - affiliate                     3,468,429      (270,241)
 Increase (decrease) in:
     accrued interest                                      (28,601)       73,579
     accrued liabilities                                    (7,025)       (7,498)
     accrued liabilities - affiliate                      (115,834)      (14,966)
     deferred rental income                                (46,014)     (175,541)
                                                      ------------   -----------

        Net cash from operating activities              10,706,313     8,271,890
                                                      ------------   -----------

Cash flows from (used in) investing activities:
  Purchase of equipment                                         --    (1,239,741)
  Proceeds from equipment sales                            485,976       268,503
                                                      ------------   -----------

        Net cash from (used in) investing activities       485,976      (971,238)
                                                      ------------   -----------

Cash flows from (used in) financing activities:
  Proceeds from notes payable                                   --     2,465,737
  Principal payments - notes payable                    (5,636,320)   (6,342,684)
  Distributions paid                                    (1,885,306)   (1,450,234)
                                                      ------------   -----------

        Net cash used in financing activities           (7,521,626)   (5,327,181)
                                                      ------------   -----------

Net increase in cash and cash equivalents                3,670,663     1,973,471

Cash and cash equivalents at beginning of period         6,640,347       669,998
                                                      ------------   -----------

Cash and cash equivalents at end of period            $ 10,311,010   $ 2,643,469
                                                      ============   ===========

Supplemental disclosure of cash flow information:
      Cash paid during the period for interest        $  1,335,544   $ 1,689,751
                                                      ============   ===========
</TABLE>

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


                                       5
<PAGE>

                             AFG Investment Trust D

                        Notes to the Financial Statements
                                  June 30, 1997

                                   (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

   The financial statements presented herein are prepared in conformity with
generally accepted accounting principles and the instructions for preparing Form
10-Q under Rule 10-01 of Regulation S-X of the Securities and Exchange
Commission and are unaudited. As such, these financial statements do not include
all information and footnote disclosures required under generally accepted
accounting principles for complete financial statements and, accordingly, the
accompanying financial statements should be read in conjunction with the
footnotes presented in the 1996 Annual Report. Except as disclosed herein, there
has been no material change to the information presented in the footnotes to the
1996 Annual Report.

   In the opinion of management, all adjustments (consisting of normal and
recurring adjustments) considered necessary to present fairly the financial
position at June 30, 1997 and December 31, 1996 and results of operations for
the three and six month periods ended June 30, 1997 and 1996 have been made and
are reflected.

NOTE 2 - CASH

   At June 30, 1997, the Trust had $10,205,000 invested in reverse repurchase
agreements secured by U. S. Treasury Bills or interests in U.S. Government
securities. Approximately $9,000,000 of the Trust's cash is expected to be used
to acquire reinvestment equipment during the remainder of 1997 and 1998.

NOTE 3 - REVENUE RECOGNITION

   Rents are payable to the Trust monthly, quarterly or semi-annually and no
significant amounts are calculated on factors other than the passage of time.
Rents from Reno Air, Inc. ("Reno Air"), as provided for in the lease agreement,
are adjusted monthly for changes in the London Inter-Bank Offered Rate
("LIBOR"). Future rents from Reno Air, included below, reflect the most recent
LIBOR effected rental payment. The leases are accounted for as operating leases
and are noncancellable. Rents received prior to their due dates are deferred.
Future minimum rents of $40,682,584 are due as follows:

   For the year ending June 30, 1998      $15,900,201
                                1999       10,965,117
                                2000        7,517,492
                                2001        3,288,172
                                2002        2,539,203
                          Thereafter          472,399
                                          -----------

                                Total     $40,682,584
                                          ===========


                                       6
<PAGE>

                             AFG Investment Trust D
                        Notes to the Financial Statements

                                   (Continued)

NOTE 4 - EQUIPMENT

   The following is a summary of equipment owned by the Trust at June 30, 1997.
In the opinion of Equis Financial Group ("EFG"), the acquisition cost of the
equipment did not exceed its fair market value.

                                             Remaining  
                                            Lease Term       Equipment
      Equipment Type                         (Months)         at Cost
-------------------------------             ----------       ---------
                                          
Aircraft                                        6-68      $ 22,779,945
Locomotives                                    23-37        17,205,933
Vessels                                           64        13,875,360
Computers & peripherals                         1-20         6,311,939
Construction & mining                           9-43         6,205,962
Materials handling                              6-58         6,124,032
Retail store fixtures                           1-31         4,930,049
Manufacturing                                  11-18         3,849,128
Miscellaneous                                   6-42         3,564,568
Communications                                  6-11         1,834,800
Tractors & heavy duty trucks                    1-19         1,043,013
Research & test                                 1-34           664,901
Furniture & fixtures                             6-8           271,945
Trailers/intermodal containers                 12-34           187,474
Photocopying                                      --            65,711
Motor vehicles                                    18            38,499
                                                           -----------
                                        
                                Total equipment cost        88,953,259

                            Accumulated depreciation       (34,384,660)
                                                           ----------- 

          Equipment, net of accumulated depreciation       $54,568,599
                                                           ===========

   At June 30, 1997, the Trust's equipment portfolio included equipment having a
proportionate original cost of $15,368,258, representing approximately 17% of
total equipment cost.

   The summary above includes equipment held for sale or re-lease which had an
original cost and net book value of approximately $464,000 and $182,000,
respectively. The Managing Trustee is actively seeking the sale or re-lease of
all equipment not on lease.

NOTE 5 - RELATED PARTY TRANSACTIONS

   All operating expenses incurred by the Trust are paid by EFG on behalf of the
Trust and EFG is reimbursed at its actual cost for such expenditures. Fees and
other costs incurred during the six month periods ended June 30, 1997 and 1996,
which were paid or accrued by the Trust to EFG or its Affiliates, are as
follows:


                                       7
<PAGE>

                             AFG Investment Trust D
                        Notes to the Financial Statements

                                   (Continued)

                                                    1997         1996
                                                 ---------     ---------

Equipment acquisition fees                              --     $  36,109
Equipment management fees                        $ 435,717       490,472
Administrative charges                              36,327        10,500
Reimbursable operating expenses
  due to third parties                             191,860       249,743
                                                 ---------     ---------

                     Total                       $ 663,904     $ 786,824
                                                 =========     =========

   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 Trust. At
June 30, 1997, the Trust was owed $377,226 by EFG for such funds and the
interest thereon. These funds were remitted to the Trust in July 1997.

NOTE 6 - NOTES PAYABLE

   Notes payable at June 30, 1997 consisted of installment notes of $27,191,657
payable to banks and institutional lenders. The notes bear interest rates
ranging between 5.1% and 13.75%, except for one note which bears a fluctuating
interest rate based on LIBOR plus a margin (5.69% at June 30, 1997). All of the
installment notes are non-recourse, and are collateralized by the equipment and
assignment of the related lease payments. Generally, the installment notes will
be fully amortized by noncancellable rents. However, the Trust has balloon
payment obligations of $282,421 and $1,476,981 at the expiration of the primary
lease terms related to the Reno Air Aircraft and certain rail equipment,
respectively. The carrying value of notes payable approximates fair value at
June 30, 1997.

   The annual maturities of the notes payable are as follows:

   For the year ending June 30, 1998     $10,340,627
                                1999       6,298,891
                                2000       4,577,476
                                2001       3,535,795
                                2002       1,815,022
                          Thereafter         623,846
                                         -----------

                               Total     $27,191,657
                                         ===========

NOTE 7 - LEGAL PROCEEDINGS

   On July 27, 1995, EFG, on behalf of the Trust and other EFG-sponsored
investment programs, filed an action in the Commonwealth of Massachusetts
Superior Court Department of the Trial Court in and for the County of Suffolk,
for damages and declaratory relief against a lessee of the Trust, National Steel
Corporation ("National Steel"), under a certain Master Lease Agreement ("MLA")
for the lease of certain equipment. EFG is seeking the reimbursement by National
Steel of certain sales and/or use taxes paid to the State of Illinois and other
remedies provided by the MLA. On August 30, 1995, National Steel filed a Notice
of Removal which removed the case to the United States District Court, District
of Massachusetts. On September 7, 1995, National Steel filed its Answer to EFG's
Complaint along with Affirmative Defenses and Counterclaims, seeking declaratory
relief and alleging breach of contract, implied covenant of good faith and fair
dealing and specific performance. EFG filed its Answer to these counterclaims on
September 29, 1995. Though the parties have been discussing settlement with
respect 


                                       8
<PAGE>

                             AFG Investment Trust D
                        Notes to the Financial Statements

                                   (Continued)

to this matter for some time, to date, the negotiations have been
unsuccessful. Notwithstanding these discussions, EFG recently filed an Amended
and Supplemental Complaint alleging a further default by National Steel under
the MLA and EFG recently filed a Summary Judgment on all claims and
counterclaims. The matter remains pending before the Court. The Trust has not
experienced any material losses as a result of this action.

   On June 24, 1997, four plaintiffs (the "Plaintiffs") owning limited partner
units or beneficiary interests in eight investment programs sponsored by EFG
filed a lawsuit, as a derivative action, on behalf of the Trust and 27 other
investment programs (collectively, the "Nominal Defendants") in the Superior
Court of the Commonwealth of Massachusetts for the County of Suffolk against EFG
and certain of EFG's affiliates, including the Managing Trustee of the Trust and
four other wholly-owned subsidiaries of EFG which are the general partner or
managing trustee of one or more of the investment programs, (collectively, the
"Managing Defendants"), and certain other entities and individuals that have
control of the Managing Defendants and the Nominal Defendants (the "Controlling
Defendants"). The Plaintiffs assert claims of breach of fiduciary duty, breach
of contract, unjust enrichment, and equitable relief and seek various remedies,
including compensatory and punitive damages to be determined at trial.

   The Managing Trustee and EFG are in the early stages of evaluating the nature
and extent of the claims asserted in this lawsuit and cannot predict its outcome
with any degree of certainty. However, based upon all of the facts presently
being considered by management, the Managing Trustee and EFG do not believe that
any likely outcome will have a material adverse effect on the Trust. The
Managing Trustee, EFG and their affiliates intend to vigorously defend against
the lawsuit.

NOTE 8 - ISSUANCE OF CLASS B INTERESTS AND OFFER TO REDEEM CLASS A INTERESTS

   On October 26, 1996, the Trust filed a Solicitation Statement with the United
States Securities and Exchange Commission (the "SEC") which subsequently was
sent to the Beneficiaries pursuant to Regulation 14A of Section 14 of the
Securities Exchange Act. The Solicitation Statement sought the consent of the
Beneficiaries to a proposed amendment (the "Amendment") to the Amended and
Restated Declaration of Trust (the "Trust Agreement") which would (i) amend the
provisions of the Trust Agreement governing the redemption of Beneficiary
Interests to permit the Trust to offer to redeem outstanding Beneficiary
Interests at such times, in such amounts, in such manner and at such prices as
the Managing Trustee might determine from time to time, in accordance with
applicable law; and (ii) add a provision to the Trust Agreement that would
permit the Trust to issue, at the discretion of the Managing Trustee and without
further consent or approval of the Beneficiaries, an additional class of
security with such designations, preferences and relative, participating,
optional or other special rights, powers and duties as the Managing Trustee
might affix. The funds obtained through the issuance of such a security would be
used by the Trust to (a) expand redemption opportunities for Beneficiaries
without using Trust funds which might otherwise be available for cash
distributions; and (b) make a special one-time cash distribution to the
Beneficiaries.

    Pursuant to the Trust Agreement, the adoption of the Amendment required the
consent of the Beneficiaries holding more than 50% in the aggregate of the
Beneficiary Interests held by all Beneficiaries. A majority of Beneficiary
Interests, representing 1,210,746 or 58% of all Beneficiary Interests, voted in
favor of the Amendment; 229,836 or 11% of all Beneficiary Interests voted
against the Amendment; and 39,233 or 2% of all Beneficiary Interests abstained.
Approximately 71% of all Beneficiary Interests participated in the vote.
Accordingly, the Trust Agreement was amended.

    On February 12, 1997, the Trust filed a Registration Statement on Form S-1
with the SEC, which became effective June 10, 1997. The Registration Statement
covered the issuance and sale of a new class of beneficiary interests in the
Trust (the "Class B Interests"). The characteristics of the Class B Interests,
associated risk factors and other matters of importance to the Beneficiaries and
purchasers of the Class B Interests were set forth in a 


                                       9
<PAGE>

                             AFG Investment Trust D
                        Notes to the Financial Statements

                                   (Continued)

Prospectus sent to the Beneficiaries. On July 17, 1997, the offering closed and
on July 18, 1997 the Trust issued 3,142,083 Class B Interests at $5.00 per
interest, thereby generating $15,710,415 in aggregate Class B capital
contributions. Class A Beneficiaries purchased 1,400 Class B Interests,
generating $7,000 of such aggregate capital contributions, and the Special
Beneficiary, EFG, purchased 3,140,683 Class B Interests, generating $15,703,415
of such aggregate capital contributions.

    Subsequently, EFG transferred its Class B Interests to a special-purpose
company, Equis II Corporation, a Delaware corporation. EFG also transferred its
ownership of AFG ASIT Corporation, the Managing Trustee of the Trust, to Equis
II Corporation. As a result, Equis II Corporation has voting control of the
Trust through its ownership of the majority of all of the Trust's outstanding
voting interests, as well as its ownership of AFG ASIT Corporation. Equis II
Corporation is controlled by EFG's President and Chief Executive Officer, Gary
D. Engle. Accordingly, control of the Managing Trustee did not change as a
result of the foregoing transactions.

    As described in the Prospectus for the offering of the Class B Interests,
the Managing Trustee intends to use a portion of the net cash proceeds realized
from the offering of the Class B Interests to pay a one-time special cash
distribution to the Class A Beneficiaries of the Trust. The Managing Trustee
expects to declare and pay this special cash distribution on or before August
31, 1997.

    On August 7, 1997, the Trust commenced an offer to purchase up to 45% of the
outstanding Class A Beneficiary Interests of the Trust by filing a Form 13E-4,
Issuer Tender Offer Statement, with the SEC and distributing to the Class A
Beneficiaries information (the "Tender Documents") concerning the offer. The
Trust will use a portion of the net proceeds realized from the offering of the
Class B Interests to purchase the Class A Beneficiary Interests tendered as a
result of the offer. The Tender Documents describe, among other things, the
terms of the offer and the purchase price per Class A Beneficiary Interest being
offered by the Trust.


                                       10
<PAGE>

                             AFG Investment Trust D

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations.

   Certain statements in this quarterly report 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 important 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, i) the
ability of the Trust to satisfy its equipment reinvestment requirements and ii)
the ability of EFG to collect all rents due under the attendant lease agreements
and to successfully remarket the Partnership's equipment upon the expiration of
such leases.

Three and six months ended June 30, 1997 compared to the three and six months
ended June 30, 1996:

Overview

   As an equipment leasing trust, AFG Investment Trust D ("the Trust") was
organized to acquire a diversified portfolio of capital equipment subject to
lease agreements with third parties. The Trust was designed to progress through
three principal phases: acquisitions, operations, and liquidation. During the
operations phase, a period of approximately six years, all equipment in the
Trust's portfolio will progress through various stages. Initially, all equipment
will generate rental revenues under primary term lease agreements. During the
life of the Trust, these agreements will expire on an intermittent basis and
equipment held pursuant to the related leases will be renewed, re-leased or
sold, depending on prevailing market conditions and the assessment of such
conditions by EFG to obtain the most advantageous economic benefit. Over time, a
greater portion of the Trust's original equipment portfolio will become
available for remarketing and cash generated from operations and from sales or
refinancings will begin to fluctuate. Ultimately, all equipment will be sold and
the Trust will be dissolved. The Trust's operations commenced in 1993.

Results of Operations

   For the three and six months ended June 30, 1997, the Trust recognized
lease revenue of $4,830,964 and $9,590,517, respectively, compared to $5,528,992
and $11,129,692 for the same periods in 1996. The decrease in lease revenue from
1996 to 1997 was primarily attributable to the Trust's sale of its interest in a
vessel to the lessee in December 1996. In the near-term, aggregate rental
revenues are expected to increase due to reinvestment of available proceeds in
other equipment, including proceeds resulting from the Trust's sale of its
interest in the vessel. Over time, the level of lease revenue will decline due
to the expiration of the Trust's primary lease term agreements.

   The Trust's equipment portfolio includes certain assets in which the Trust
holds a proportionate ownership interest. In such cases, the remaining interests
are owned by EFG or an affiliated equipment leasing program sponsored by EFG.
Proportionate equipment ownership enables the Trust to further diversify its
equipment portfolio by participating in the ownership of selected assets,
thereby reducing the general levels of risk which could result from a
concentration in any single equipment type, industry or lessee. The Trust 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.

   Interest income for the three and six months ended June 30, 1997 was
$124,987 and $246,138, respectively, compared to $33,028 and $46,849 for the
same periods in 1996. Interest income was generated from temporary investment of
available cash in short-term money market instruments. Interest income was
higher in the six months ended June 30, 1997 than in the same period in 1996 due
to interest earned on sale proceeds associated 


                                       11
<PAGE>

                             AFG Investment Trust D

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

with the vessel discussed above. The amount of future interest income is
expected to fluctuate in relation to prevailing interest rates and the
collection of lease revenue and equipment sales proceeds.

   For the three and six months ended June 30, 1997, the Trust sold equipment
having a net book value of $565,428 and $576,874, respectively, to existing
lessees and third parties. These sales resulted in a net loss for financial
statement purposes, of $85,952 and $90,898, respectively, compared to a net loss
of $1,442 and $92,007 on equipment having a net book value of $3,000 and
$360,510 for the same periods in 1996.

   It cannot be determined whether future sales of equipment will result in a
net gain or a net loss to the Trust, as such transactions will be dependent upon
the condition and type of equipment being sold and its 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 type of equipment is
dependent upon many factors, including EFG's ability to sell and re-lease
equipment. Changing market conditions, industry trends, technological advances,
and many other events can converge to enhance or detract from asset values at
any given time. EFG attempts to monitor these changes in order to identify
opportunities which may be advantageous to the Trust and which will maximize
total cash returns for each asset.

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

   Depreciation and amortization expense for the three and six months ended June
30, 1997 was $3,070,399 and $6,212,518, respectively, compared to $3,539,297 and
$7,081,212 for the same periods in 1996. For financial reporting purposes, to
the extent that an asset is held on primary lease term, the Trust depreciates
the difference between (i) the cost of the asset and (ii) the estimated residual
value of the asset on a straight-line basis over such term. For purposes of this
policy, estimated residual values represent estimates of equipment values at the
date of primary lease expiration. To the extent that an asset is held beyond its
primary lease term, the Trust continues to depreciate the remaining net book
value of the asset on a straight-line basis over the asset's remaining economic
life.

   Interest expense was $651,951 and $1,306,943 or 13.5% and 13.6% of lease
revenue for the three and six months ended June 30, 1997, respectively, compared
to $870,658 and $1,763,330 or 15.8% of lease revenue for each of the same
periods in 1996. Interest expense in the near-term is expected to increase due
to anticipated leveraging to be obtained to finance the acquisition of
reinvestment equipment, discussed above. Thereafter, interest expense will
decline in amount and as a percentage of lease revenue as the principal balance
of notes payable is reduced through the application of rent receipts to
outstanding indebtedness.

   Management fees were 4.5% of lease revenue for each of the three and six
months ended June 30, 1997 compared to 4.4% of lease revenue for each of the
same periods in 1996. 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 consist principally of administrative charges,
professional service costs, such as audit and legal fees, as well as printing,
distribution and remarketing expenses. Collectively, operating expenses


                                       12
<PAGE>

                             AFG Investment Trust D

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

represented 1.8% and 2.4% of lease revenue during the three and six months ended
June 30, 1997 compared to 1.7% and 2.3% of lease revenue during the same periods
in 1996. Operating expenses in 1997 include professional service costs incurred
in connection with the Solicitation and Registration Statements described in
Note 8 to the accompanying financial statements whereas operating expenses in
1996 included remarketing fees incurred related to the sale of certain
equipment. The amount of future operating expenses cannot be predicted with
certainty; however, such expenses are usually higher during the acquisition and
liquidation phases of a trust. Other fluctuations typically occur in relation to
the volume and timing of remarketing activities.

Liquidity and Capital Resources and Discussion of Cash Flows

   The Trust by its nature is a limited life entity which was established for
specific purposes described in the preceding "Overview". As an equipment leasing
program, the Trust's principal operating activities derive from asset rental
transactions. Accordingly, the Trust's principal source of cash from operations
is provided by 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. For the six months ended June 30, 1997,
operating activities generated net cash inflows of $7,108,240, after reductions
for equipment sale proceeds of approximately $1,618,000 received in connection
with the sale of the vessel and debt proceeds of $1,980,073 which relate to the
leveraging of certain rail equipment in the Trust's portfolio. These sale and
debt proceeds were due from EFG at December 31, 1996 and received by the Trust
in January 1997. For the six months ended June 30, 1996, the Trust generated net
cash inflows from operating activities of $8,271,890. In the near-term, net cash
inflows generated from operating activities are expected to increase due to the
acquisition of reinvestment equipment as described below. Thereafter, renewal,
re-lease and equipment sale activities will cause the Trust's primary-term lease
revenue and corresponding sources of operating cash to decline. Overall,
expenses associated with rental activities, such as management fees, and net
cash flow from operating activities will decline as the Trust experiences a
higher frequency of remarketing events.

   Ultimately, the Trust will dispose of all assets under lease. This will occur
principally through sale transactions whereby each asset will be sold to the
existing lessee or to a third party. Generally, this will occur upon expiration
of each asset's primary or renewal/re-lease term. In certain instances, casualty
or early termination events may result in the disposal of an asset. Such
circumstances are infrequent and usually result in the collection of stipulated
cash settlements pursuant to terms and conditions contained in the underlying
lease agreements.

   Cash expended for asset acquisitions and cash realized from asset disposal
transactions are reported under investing activities on the accompanying
Statement of Cash Flows. During the six months ended June 30, 1997, the Trust
realized equipment sale proceeds of $458,976, compared to $268,503 during the
same period in 1996 Future inflows of cash from asset 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 equipment
being sold, its condition and age, and future market conditions. The Trust
expended $1,239,741 to acquire equipment during the six months ended June 30,
1996, pursuant to the reinvestment provisions of the Trust's prospectus. The
reinvestment equipment was financed through a combination of leveraging and sale
proceeds.

   The Trust obtained long-term financing in connection with certain
equipment leases. The origination of such indebtedness and the subsequent
repayments of principal are reported as components of financing activities. Cash
inflows of $2,465,737 in 1996 resulted from leveraging a portion of the Trust's
equipment portfolio with third-party lenders. Each note payable is recourse only
to the specific equipment financed and to the minimum rental payments contracted
to be received during the debt amortization period (which period generally
coincides with the lease rental term). As rental payments are collected, a
portion or all of the rental payment is used to repay the associated
indebtedness. In the near-term, the amount of cash used to repay debt
obligations is expected to 


                                       13
<PAGE>

                             AFG Investment Trust D

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

increase as a result of anticipated leveraging to be obtained in connection with
the acquisition of reinvestment equipment. Thereafter, the amount will decline
as the principal balance of notes payable is reduced through the collection and
application of rents. However, the Trust has balloon payment obligations of
$282,421 and $1,476,981 at the expiration of the primary lease terms related to
the Trust's proportionate ownership interest in an MD-87 jet aircraft leased by
Reno Air, Inc. and certain rail equipment, respectively.

   Cash distributions to the Managing Trustee, the Special Beneficiary and the
Beneficiaries are declared and generally paid within fifteen days following the
end of each calendar month. The payment of such distributions is presented as a
component of financing activities. For the six months ended June 30, 1996, the
Trust declared total cash distributions of Distributable Cash From Operations
and Distributable Cash From Sales and Refinancings of $1,885,306. In accordance
with the Trust Agreement, the Beneficiaries were allocated 90.75% of these
distributions, or $1,710,915; the Special Beneficiary was allocated 8.25%, or
$155,538; and the Managing Trustee was allocated 1%, or $18,853.

   For financial reporting purposes, the Managing Trustee and the Special
Beneficiary each has accumulated a capital deficit at June 30, 1997. This is the
result of aggregate cash distributions to these Participants being in excess of
their aggregate capital contributions ($1,000 each) and their respective
allocations of financial statement net income or loss. Ultimately, the existence
of a capital deficit for the Managing Trustee or the Special Beneficiary for
financial reporting purposes is not indicative of any further capital
obligations to the Trust by either the Managing Trustee or the Special
Beneficiary. However, for income tax purposes, the Trust Agreement requires that
income be allocated first to those Participants having negative tax capital
account balances so as to eliminate any such balances. In accordance with the
Trust Agreement, upon the dissolution of the Trust, the Managing Trustee will be
required to contribute to the Trust an amount equal to any negative balance
which may exist in the Managing Trustee's tax capital account. No such
requirement exists with respect to the Special Beneficiary. At December 31,
1996, the Managing Trustee had a negative tax capital account balance.

   At June 30, 1997, the Trust had aggregate future minimum lease payments of
$40,682,584 from contractual lease agreements (see Note 3 to the financial
statements), of which $27,191,657 will be used to amortize the principal balance
of notes payable (see Note 6 to the financial statements). Additional cash
inflows will be realized from future remarketing activities, such as lease
renewals and equipment sales, as well as from lease revenues generated by
equipment acquisitions from the Trust's anticipated reinvestment activities.
Presently, the Trust expects to acquire approximately $36,000,000 of
reinvestment equipment using cash of approximately $9,000,000 and additional
indebtedness, which will be amortized from the associated rental streams.
However, the extent of the Trust's total future reinvestment activities may
exceed this projection as a result of future equipment sales, the timing and
extent of which cannot be predicted with certainty. This is because the timing
and extent of equipment sales is often 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 equipment. In the latter instances, the
equipment could be re-leased to another lessee or sold to a third party.
Accordingly, as the Trust matures and a greater level of its equipment assets
become available for remarketing, the cash flows of the Trust will become less
predictable. In addition, the Trust will have cash outflows to satisfy interest
on indebtedness and to pay management fees and operating expenses. Ultimately,
the Trust is expected to meet its future disbursement obligations and to
distribute any excess of cash inflows over cash outflows to the Participants in
accordance with the Trust Agreement. However, several factors, including
month-to-month lease extensions, lessee defaults, equipment casualty events, and
early lease terminations could alter the Trust's anticipated cash flows as
described herein and in the accompanying financial statements and result in
fluctuations to the Trust's periodic cash distribution payments.

   Cash distributions paid to the Participants consist of both a return of and a
return on capital. Cash distributions do not represent and are not indicative of
yield on investment. Actual yield on investment cannot be determined with any
certainty until conclusion of the Trust and will be dependent upon the
collection of all future 


                                       14
<PAGE>

                             AFG Investment Trust D

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

contracted rents, the generation of renewal and/or re-lease rents, and the
residual value realized for each asset at its disposal date. Future market
conditions, technological changes, the ability of EFG to manage and remarket the
assets, and many other events and circumstances, could enhance or detract from
individual asset yields and the collective performance of the Trust's equipment
portfolio.

   It is the intention of the Managing Trustee to maintain a cash distribution
level that is consistent with the operating cash flows of the Trust and to
optimize the long-term value of the Trust. A distribution level that is higher
than the Trust's operating cash flows could compromise the Trust's working
capital position, as well as its ability to refurbish or upgrade equipment in
response to lessee requirements or other market circumstances and, during its
reinvestment period, to purchase replacement equipment as original equipment is
remarketed. Accordingly, in order to better align monthly cash distributions
with the Trust's operating cash flows, the Managing Trustee reduced the level of
monthly cash distributions from an annualized rate of $2.52 per Beneficiary
Interest (the rate established and paid from the Trust's inception through
September 1995) to an annualized rate of $1.26 per Beneficiary Interest
commencing in October 1995. In October 1996, the Managing Trustee increased the
annualized distribution rate to $1.64 per Beneficiary Interest and expects that
the Trust will be able to sustain this distribution rate throughout 1997.
However, the nature of the Trust's principal cash flows gradually will shift
from rental receipts to equipment sale proceeds as the Trust matures. As this
occurs, the Trust's cash flows will become more volatile in that certain of the
Trust's equipment leases will be renewed and certain of its assets will be sold.
In some cases, the Trust may be required to expend funds to refurbish or
otherwise improve the equipment being remarketed in order to make it more
desirable to a potential lessee or purchaser. The Trust's Advisor, EFG, and the
Managing Trustee will attempt to monitor and manage these events to maximize the
residual value of the Trust's equipment and will consider these factors, in
addition to the collection of contractual rents, the retirement of scheduled
indebtedness and the Trust's future working capital and equipment requirements,
in establishing future cash distribution rates. Ultimately, the Participants
should expect that cash distribution rates will fluctuate over the long term as
a result of future remarketing activities.

    On February 12, 1997, the Trust filed a Registration Statement on Form S-1
with the SEC, which became effective June 10, 1997. The Registration Statement
covered the issuance and sale of a new class of beneficiary interests in the
Trust (the "Class B Interests"). The characteristics of the Class B Interests,
associated risk factors and other matters of importance to the Beneficiaries and
purchasers of the Class B Interests were set forth in a Prospectus sent to the
Beneficiaries. On July 17, 1997, the offering closed and on July 18, 1997 the
Trust issued 3,142,083 Class B Interests at $5.00 per interest, thereby
generating $15,710,415 in aggregate Class B capital contributions. Class A
Beneficiaries purchased 1,400 Class B Interests, generating $7,000 of such
aggregate capital contributions, and the Special Beneficiary, EFG, purchased
3,140,683 Class B Interests, generating $15,703,415 of such aggregate capital
contributions.

    As described in the Prospectus for the offering of the Class B Interests,
the Managing Trustee intends to use a portion of the net cash proceeds realized
from the offering of the Class B Interests to pay a one-time special cash
distribution to the Class A Beneficiaries of the Trust. The Managing Trustee
expects to declare and pay this special cash distribution on or before August
31, 1997.

   On August 7, 1997, the Trust commenced an offer to purchase up to 45% of the
outstanding Class A Beneficiary Interests of the Trust by filing a Form 13E-4,
Issuer Tender Offer Statement, with the SEC and distributing to the Class A
Beneficiaries information (the "Tender Documents") concerning the offer. The
Trust will use a portion of the net proceeds realized from the offering of the
Class B Interests to purchase the Class A Beneficiary Interests tendered as a
result of the offer. The Tender Documents describe, among other things, the
terms of the offer and the purchase price per Class A Beneficiary Interest being
offered by the Trust.


                                       15
<PAGE>

                             AFG Investment Trust D

                                    FORM 10-Q

                           PART II. OTHER INFORMATION

     Item 1.               Legal Proceedings
                           Response:

                           Refer to Note 7 to the financial statements herein.

     Item 2.               Changes in Securities
                           Response:

                           On July 18, 1997, the Trust issued 3,142,083 Class B
                           Interests at $5.00 per interest, generating
                           $15,710,415 in aggregate Class B capital
                           contributions. Class A Beneficiaries purchased 1,400
                           Class B Interests, generating $7,000 of such
                           aggregate capital contributions, and the Special
                           Beneficiary, EFG, purchased 3,140,683 Class B
                           Interests, generating $15,703,415 of such aggregate
                           capital contributions. Subsequently, EFG transferred
                           its Class B Interests to a special-purpose company,
                           Equis II Corporation. (See Note 8 to the accompanying
                           financial statements.)

                           The Trust Agreement grants limited voting rights to
                           the Class A Beneficiaries and Class B Beneficiaries.
                           However, each Class A Beneficiary and Class B
                           Beneficiary is entitled to cast one vote for each
                           Interest owned by him or her. Equis II Corporation
                           has voting control of the Trust through its ownerhsip
                           of its Class B Interests.

                           Future cash distributions with respect to the Class B
                           Interests will be subordinate to certain
                           distributions with respect to the Class A Interests.

     Item 3.               Defaults upon Senior Securities
                           Response:  None

     Item 4.               Submission of Matters to a Vote of Security Holders
                           Response:  None

     Item 5.               Other Information
                           Response:  None

     Item 6(a).            Exhibits
                           Response:  None

     Item 6(b).            Reports on Form 8-K
                           Response:  None


                                       16
<PAGE>

                                 SIGNATURE PAGE

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on behalf of the registrant and in the capacity and
on the date indicated.

                                 AFG Investment Trust D


                     By:   AFG ASIT Corporation, a Massachusetts
                           corporation and the Managing Trustee of
                           the Registrant.


                     By:   /s/  Michael J. Butterfield
                           -----------------------------------------
                           Michael J. Butterfield
                           Treasurer of AFG ASIT Corporation
                           (Duly Authorized Officer and
                           Principal Accounting Officer)

                     Date: August 14, 1997


                     By:   /s/  Gary M. Romano
                           -----------------------------------------
                           Gary M. Romano
                           Clerk of AFG ASIT Corporation
                           (Duly Authorized Officer and
                           Principal Financial Officer)

                     Date: August 14, 1997


                                       17