<PAGE>

                                 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, 1998
                               -------------


                                       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, 1998                 Commission File No. 0-25648

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


--------------------------------------------------------------------------------
 (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, 1998 and December 31, 1997                           3
         Statement of Operations
              for the three and six months ended June 30, 1998 and 1997        4

         Statement of Cash Flows
              for the six months ended June 30, 1998 and 1997                  5

         Notes to the Financial Statements                                  6-14


     Item 2.  Management's Discussion and Analysis of Financial
              Condition and Results of Operations                          15-20


PART II. OTHER INFORMATION:

        Items 1 - 6                                                           21



                                       2
<PAGE>

                             AFG Investment Trust D

                        STATEMENT OF FINANCIAL POSITION
                      June 30, 1998 and December 31, 1997

                                  (Unaudited)


<TABLE>
<CAPTION>

                                                         June 30,      December 31,
                                                          1998            1997
                                                      ------------     ------------

<S>                                                   <C>             <C>         
ASSETS

Cash and cash equivalents                             $  4,611,471    $  4,218,502

Restricted cash                                         10,703,105      10,712,105

Cash held in escrow                                      3,054,919       3,017,318

Rents receivable                                         2,773,829       2,133,873

Accounts receivable - affiliate                            587,255         508,209

Equipment at cost, net of accumulated depreciation
  of $44,170,949 and $38,811,298 at June 30, 1998
  and and December 31, 1997, respectively               66,635,955      72,711,968

Organization costs, net of accumulated amortization
  of $4,750 and $4,250 at June 30, 1998
  and December 31, 1997, respectively                          250             750
                                                      ------------    ------------
Total assets                                          $ 88,366,784    $ 93,302,725
                                                      ------------    ------------
                                                      ------------    ------------
LIABILITIES AND PARTICIPANTS' CAPITAL

Notes payable                                         $ 39,301,181    $ 43,102,250
Accrued interest                                           761,940         492,620
Accrued liabilities                                        136,989          11,550
Accrued liabilities - affiliate                             11,610         113,323
Deferred rental income                                     155,066          39,331
Cash distributions payable to participants                 480,026         480,436
                                                      ------------    ------------
Total liabilities                                       40,846,812      44,239,510
                                                      ------------    ------------
Participants' capital (deficit):                      
Managing Trustee                                             6,132         (45,553)
Special Beneficiary                                         50,587        (379,308)
Class A Beneficiary Interests (1,934,755 Interests;
 initial purchase  price of $25 each)                   35,255,925      36,477,495
Class B Beneficiary Interests (3,142,083 Interests;
 initial purchase price of $5 each)                     13,822,650      14,616,903
Treasury Interests (154,274 Interests at Cost)          (1,615,322)     (1,606,322)
                                                      ------------    ------------
Total participants' capital                             47,519,972      49,063,215
                                                      ------------    ------------
Total liabilities and participants' capital           $ 88,366,784    $ 93,302,725
                                                      ------------    ------------
                                                      ------------    ------------

</TABLE>

                  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, 1998 and 1997

                                  (Unaudited)


<TABLE>
<CAPTION>
                                               Three Months                  Six Months
                                               Ended June 30,               Ended June 30,
                                           1998            1997          1998           1997
                                        ------------ -------------    ----------- --------------

<S>                                     <C>            <C>            <C>            <C>        
Income:

  Lease revenue                         $ 4,601,808    $ 4,830,964    $ 9,579,590    $ 9,590,517

  Interest income                           222,143        124,987        440,123        246,138

  Loss on sale of equipment                 (78,113)       (85,952)      (119,503)       (90,898)
                                        -----------    -----------    -----------    ----------- 
    Total income                          4,745,838      4,869,999      9,900,210      9,745,757
                                        -----------    -----------    -----------    ----------- 

Expenses:

  Depreciation and amortization           2,681,811      3,070,399      5,969,318      6,212,518

  Interest expense                          897,884        651,951      1,830,304      1,306,943

  Equipment management fees - affiliate     217,248        216,036        451,800        435,717

  Operating expenses - affiliate            206,812         87,585        300,811        228,187
                                        -----------    -----------    -----------    ----------- 

    Total expenses                        4,003,755      4,025,971      8,552,233      8,183,365
                                        -----------    -----------    -----------    ----------- 

Net income                              $   742,083    $   844,028    $ 1,347,977    $ 1,562,392
                                        -----------    -----------    -----------    ----------- 
                                        -----------    -----------    -----------    ----------- 
Net income
 per Class A Beneficiary Interest       $      0.19    $      0.37    $      0.19    $      0.68
                                        -----------    -----------    -----------    ----------- 
                                        -----------    -----------    -----------    ----------- 

 per Class B Beneficiary Interest       $      0.08    $        --    $      0.08    $        --
                                        -----------    -----------    -----------    ----------- 
                                        -----------    -----------    -----------    ----------- 

Cash distributions declared
 per Class A Beneficiary Interest       $      0.41    $      0.41    $      0.82    $      0.82
                                        -----------    -----------    -----------    ----------- 
                                        -----------    -----------    -----------    ----------- 

 per Class B Beneficiary Interest       $      0.16    $        --    $      0.33    $        --
                                        -----------    -----------    -----------    ----------- 
                                        -----------    -----------    -----------    ----------- 

</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, 1998 and 1997

                                  (Unaudited)
<TABLE>
<CAPTION>


                                                       1998             1997
                                                    ------------    ------------

<S>                                                 <C>             <C>
Cash flows from (used in) operating activities:
Net income                                          $  1,347,977    $  1,562,392

Adjustments to reconcile net income to
  net cash from operating activities:
     Depreciation and amortization                     5,969,318       6,212,518
     Loss on sale of equipment                           119,503          90,898

Changes in assets and liabilities
  Decrease (increase) in:
    cash held in escrow                                  (37,601)           --
    rents receivable                                    (639,956)       (430,450)
    accounts receivable - affiliate                      (79,046)      3,468,429
  Increase (decrease) in:
    accrued interest                                     269,320         (28,601)
    accrued liabilities                                  125,439          (7,025)
    accrued liabilities - affiliate                     (101,713)       (115,834)
    deferred rental income                               115,735         (46,014)
                                                    ------------    ------------
     Net cash from operating activities                7,088,976      10,706,313
                                                    ------------    ------------
Cash flows from (used in) investing activities:
  Purchase of equipment                                  (87,748)           --
  Proceeds from equipment sales                           75,440         485,976
                                                    ------------    ------------
     Net cash from (used in) investing activities        (12,308)        485,976
                                                    ------------    ------------
Cash flows used in financing activities:
  Principal payments - notes payable                  (3,801,069)     (5,636,320)
  Distributions paid                                  (2,882,630)     (1,885,306)
                                                    ------------    ------------
     Net cash used in financing activities            (6,683,699)     (7,521,626)
                                                    ------------    ------------
Net increase in cash and cash equivalents                392,969       3,670,663

Cash and cash equivalents at beginning of period       4,218,502       6,640,347
                                                    ------------    ------------
Cash and cash equivalents at end of period          $  4,611,471    $ 10,311,010
                                                    ------------    ------------
                                                    ------------    ------------
Supplemental disclosure of cash flow information:
    Cash paid during the period for interest        $  1,560,984    $  1,335,544
                                                    ------------    ------------
                                                    ------------    ------------
</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, 1998

                                   (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 1997 Annual Report. Except as disclosed herein, there
has been no material change to the information presented in the footnotes to the
1997 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, 1998 and December 31, 1997 and results of operations for
the three and six months ended June 30, 1998 and 1997 have been made and are
reflected.


NOTE 2 - CASH

     At June 30, 1998, the Trust had $15,203,720 invested in federal agency
discount notes and reverse repurchase agreements secured by U.S. Treasury Bills
or interests in U.S. Government securities. Such cash includes $10,703,105 which
is classified as Restricted Cash and represents the remaining net proceeds
realized from the offering of the Class B Interests less the portion thereof
used to pay a special distribution to the Class A Beneficiaries and to redeem
Class A Interests (see Notes 8 and 9). A portion of these funds will be used to
pay a Class B Capital Distribution (see Note 11). The remainder is expected to
be used according to terms negotiated in conjunction with settling the Class
Action Lawsuit described in Note 7.


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.
The leases are accounted for as operating leases and are noncancellable. Rents
received prior to their due dates are deferred. In certain instances, the Trust
may enter primary-term, renewal or re-lease agreements which expire beyond the
Trust's anticipated dissolution date. This circumstance is not expected to
prevent the orderly wind-up of the Trust's business activities as the Managing
Trustee and the Advisor would seek to sell the then-remaining equipment assets
either to the lessee or to a third party, taking into consideration the amount
of future non-cancelable rental payments associated with the attendant lease
agreements. Future minimum rents of $29,187,866 are due as follows:

<TABLE>


<S>                               <C>           <C>          
     For the year ending June 30, 1999          $  13,079,846
                                  2000              8,429,635
                                  2001              3,921,954
                                  2002              3,173,391
                                  2003                583,040
                                                -------------

                                  Total         $  29,187,866
                                                -------------
                                                -------------

</TABLE>


                                       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,
1998. Remaining Lease Term (Months), as used below, represents the number of
months remaining from June 30, 1998 under contracted lease terms and is
presented as a range when more than one lease agreement is contained in the
stated equipment category. A Remaining Lease Term equal to zero reflects
equipment either held for sale or re-lease or being leased on a month-to-month
basis. In the opinion of Equis Financial Group Limited Partnership ("EFG"), the
acquisition cost of the equipment did not exceed its fair market value.

<TABLE>
<CAPTION>


                                          Remaining
                                          Lease Term              Equipment
         Equipment Type                    (Months)                at Cost
------------------------------            ----------          -------------

<S>                                            <C>            <C>          
Aircraft                                       4-54           $  52,946,296
Vessels                                          51              13,875,360
Locomotives                                      24              10,684,643
Construction and mining                        0-48               6,209,244
Materials handling                             0-45               6,185,493
Computers and peripherals                      0-21               5,120,949
Retail store fixtures                          0-18               4,926,665
Manufacturing                                   0-6               3,849,128
Miscellaneous                                  6-29               3,564,568
Communications                                    0               1,834,800
Tractors & heavy duty trucks                    0-9                 545,117
Research & test                               12-21                 501,012
Furniture & fixtures                              0                 271,945
Trailers/intermodal containers                    0                 187,474
Photocopying                                    0-9                  65,711
Motor vehicles                                    6                  38,499
                                                              --------------
                               Total equipment cost             110,806,904

                           Accumulated depreciation              (44,170,949)
                                                              --------------
         Equipment, net of accumulated depreciation            $  66,635,955
                                                              --------------
                                                              --------------
</TABLE>


     At June 30, 1998, the Trust's equipment portfolio included equipment having
a proportionate original cost of $45,527,100 , representing approximately 41% of
total equipment cost.

     At June 30, 1998, the cost and net book value of equipment held for sale or
re-lease was approximately $372,000 and $102,000, respectively. The Managing
Trustee is actively seeking the sale or re-lease of all equipment not on lease.
In addition, the summary above includes equipment being leased on a
month-to-month basis.


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, 1998 and
1997, 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)


<TABLE>
<CAPTION>

                                        1998       1997
                                    --------   --------

<S>                                 <C>             <C>
Equipment acquisition fees          $  2,556    $    --

Equipment management fees            451,800    435,717

Administrative charges                40,092     36,327

Reimbursable operating expenses
    due to third parties             260,719    191,860
                                    --------    -------

                            Total   $755,167   $663,904
                                    --------    -------
                                    --------    -------

</TABLE>


     All rents and 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, 1998, the Trust was owed $587,255 by EFG for such funds and the
interest thereon. These funds were remitted to the Trust in July 1998.

     Refer to Note 8 regarding the purchase of Class B Interests by an
affiliate, Equis II Corporation and a change in ownership of the Managing
Trustee.

NOTE 6 - NOTES PAYABLE

     Notes payable at June 30, 1998 consisted of installment notes of
$39,301,181 payable to banks and institutional lenders. The notes bear interest
rates ranging between 6.7% and 13.75%, except for one note which bears a
fluctuating interest rate based on LIBOR (5.66% at June 30, 1998) plus a margin.
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 $22,162,280, $1,476,981 and $282,421 at
the expiration of the primary lease terms related to an aircraft leased to
Scandinavian Airlines System, certain rail equipment, and its interest in an
aircraft leased to Reno Air, Inc., respectively. The carrying value of notes
payable approximates fair value at June 30, 1998.

     The annual maturities of the notes payable are as follows:

<TABLE>

<S>                          <C>       <C>        
For the year ending June 30, 1999      $28,983,049
                             2000        4,596,623
                             2001        3,276,704
                             2002        1,815,022
                             2003          629,783
                                       -----------
                            Total      $39,301,181
                                       -----------
                                       -----------

</TABLE>

NOTE 7 - LEGAL PROCEEDINGS

     On or about January 15, 1998, certain plaintiffs (the "Plaintiffs") filed a
class and derivative action, captioned Leonard Rosenblum, et al. v. Equis
Financial Group Limited Partnership, et al., in the United States District Court
for the Southern District of Florida (the "Court") on behalf of a proposed class
of investors in 28 equipment leasing programs sponsored by EFG, including the
Trust (collectively, the "Nominal Defendants"), against EFG and a number of its
affiliates, including the Managing Trustee, as defendants (collectively, the
"Defendants"). Certain of the Plaintiffs, on or about June 24, 1997, had filed
an earlier derivative action, captioned Leonard Rosenblum, et al. v. Equis
Financial Group Limited Partnership, et al., in the Superior Court of the
Commonwealth of


                                       8
<PAGE>

                             AFG Investment Trust D

                        Notes to the Financial Statements

                                   (Continued)

Massachusetts on behalf of the Nominal Defendants against the Defendants. Both
actions are referred to herein collectively as the "Class Action Lawsuit."

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

     On July 16, 1998, counsel for the Defendants and the Plaintiffs executed a
Stipulation of Settlement setting forth the terms pursuant to which a settlement
of the Class Action Lawsuit is intended to be achieved and which, among other
things, is expected to reduce the burdens and expenses attendant to continuing
litigation. The Stipulation of Settlement was based upon and supersedes a
Memorandum of Understanding between the parties dated March 9, 1998 which
outlined the terms of a possible settlement.

     The Stipulation of Settlement was filed with the Court on July 23, 1998 and
remains pending. Ultimately, the Court must review and approve the Stipulation
of Settlement prior to its becoming effective. Further, the Stipulation of
Settlement prescribes certain conditions necessary to effecting a settlement and
contemplates various changes that, if effected, would alter the future
operations of the Nominal Defendants (see Note 10). To the extent that the
Stipulation of Settlement is approved by the Court, the complete terms thereof
will be communicated to all of the beneficiaries (or partners) of the Nominal
Defendants.

     There can be no assurance that the Stipulation of Settlement will be
approved by the Court. However, the Managing Trustee and its affiliates, in
consultation with counsel, concur that there is a reasonable basis to believe
that the Stipulation of Settlement will be approved by the Court. In the absence
of a Stipulation of Settlement approved by the Court, the Defendants intend to
defend vigorously against the claims asserted in the Class Action Lawsuit. The
Managing Trustee and its affiliates cannot predict with any degree of certainty
the ultimate outcome of such litigation.

     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 discussed settlement with respect to this
matter for some time, the negotiations were unsuccessful. Notwithstanding these
discussions, EFG filed an Amended and Supplemental Complaint alleging further
default under the MLA and EFG filed a motion for Summary Judgment on all claims
and counterclaims. The Court held a hearing on EFG's motion in December 1997 and
the Court recently entered a decision dismissing certain of National Steel's
counterclaims and finding in favor of EFG on certain issues and in favor of
National Steel on other issues. The parties have since resumed settlement
discussions. The Trust does not anticipate that it will experience any material
losses as a result of this action.


                                       9
<PAGE>

                             AFG Investment Trust D

                        Notes to the Financial Statements

                                   (Continued)

NOTE 8 - ISSUANCE OF CLASS B 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 were
intended to 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 Class
A Interests held by all Beneficiaries. A majority of the Class A Interests,
representing 1,210,746 Interests or 58% of all Class A Interests, voted in favor
of the Amendment; 229,836 Interests or 11% of all Class A Interests voted
against the Amendment; and 39,233 Interests or 2% of all Class A Interests
abstained. Approximately 71% of all Class A Interests participated in the vote.
Accordingly, the Amendment was adopted.

     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. The Trust incurred offering costs in the amount of $157,104 and
professional service costs of $159,066 in connection with this offering.

     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 used a portion of the net cash proceeds realized from the
issuance of the Class B Interests to pay a one-time special cash distribution of
approximately $1.47 per Class A Interest to the Class A Beneficiaries of the
Trust. The Managing Trustee declared and paid this special cash distribution,
aggregating $3,075,818, to the Class A Beneficiaries on August 15, 1997.


NOTE 9 - REDEMPTION OF CLASS A INTERESTS

     On August 7, 1997, the Trust commenced an offer to purchase up to 45% of
the outstanding Class A Interests of the Trust by filing a Form 13E-4, Issuer
Tender Offer Statement, with the SEC and distributing to the Class A


                                       10
<PAGE>

                             AFG Investment Trust D

                        Notes to the Financial Statements

                                   (Continued)

Beneficiaries information (the "Tender Documents") concerning the offer. On
October 10, 1997, the Trust used $1,606,322 of the net proceeds realized from
the offering of the Class B Interests to purchase 153,275 of the Class A
Interests tendered as a result of the offer. The Tender Documents described,
among other things, the terms of the offer and the purchase price per Class A
Interest being offered by the Trust. On April 28, 1998, the Trust used an
additional $9,000 of such proceeds to purchase 1,000 of the remaining Class A
Interests.


NOTE 10 - SOLICITATION STATEMENT

     On May 5, 1998, the Trust filed a definitive Solicitation Statement with
the United States Securities and Exchange Commission in connection with the
solicitation by the Trust of the consent of the Beneficiaries to a proposed
amendment (the "Amendment") to the Second Amended and Restated Declaration of
Trust (the "Trust Agreement"). The Solicitation Statement and Consent of
Beneficiary were mailed to all of the Beneficiaries of the Trust on May 6, 1998.
The Beneficiaries were requested to use the Consent of Beneficiary to vote on
seven proposals and return their votes on or before June 5, 1998. Equis II
Corporation, which has voting control of the Trust, agreed to vote all of its
Class B Interests in the same manner in which the majority of the Class A
Interests were actually voted. Accordingly, the Amendment would be adopted or
rejected based upon the voting results of the majority of Class A Interests that
were actually voted (including 44,084 Class A Interests owned by affiliates of
EFG), regardless of how few Class A Interests were actually voted.

     The results of the voting are presented herein and reflect that a majority
of Class A Interests were voted in favor of each of the proposals. Therefore,
the Trust Agreement will be amended to (i) broaden the Trust's stated investment
policies and objectives and permit the Trust to invest in assets other than
leased equipment and (ii) modify the Trust's financing provisions to eliminate
any cap on the amount of aggregate Trust indebtedness and permit the Trust to
use cross-collateralized and other recourse debt structures.

     In addition, subject to attaining a settlement in the Class Action Lawsuit
described in Note 7 herein, the Trust Agreement will be modified in the
following principal respects: (i) the Trust will pay a Special Cash Distribution
to the Class A Beneficiaries of record as of September 1, 1997, or to their
successors or assigns, totaling $1,572,405 (or approximately $0.75 per Class A
Beneficiary Interest) using a portion of the Class B capital contributions that
otherwise would be distributed as a Class B Capital Distribution to Equis II
Corporation, the parent company of the Managing Trustee and an affiliate of EFG;
(ii) Equis II Corporation will be required to reduce its prospective Class B
Capital Distributions by $3,537,910 and treat such amount as a long-term equity
investment in the Trust; (iii) certain voting restrictions will be placed upon
the Class B Interests owned by Equis II Corporation; (iv) the Trust's
reinvestment period, which presently is scheduled to expire on February 6, 1999,
will be extended until December 31, 2002; and (v) acquisition fees paid to EFG
in connection with reinvestment assets acquired after the Amendment date
(meaning reinvestment assets acquired after the present reinvestment period
expires on February 6, 1999) will be reduced from a maximum of 3% to 1% and
management fees earned in connection with such assets will be reduced from a
maximum of 5% to 2%.

     The voting results submitted by the Beneficiaries on the Consent of
Beneficiary forms returned to the Managing Trustee in connection with the
Solicitation Statement are summarized below:



                                       11
<PAGE>

                             AFG Investment Trust D

                        Notes to the Financial Statements

                                   (Continued)

Proposal 1. Subject to attaining a settlement in the Class Action Lawsuit,
provide for a special cash distribution to Class A Beneficiaries.

<TABLE>
<CAPTION>

                                                    Class A  Interests          Class B Interests


<S>                                                          <C>                        <C>      
Total Interests of record                                    1,935,755                  3,142,083
Total votes returned                                           838,195                  3,142,083
Percentage returned                                              43.3%                       100%
Votes in favor                                                 753,952                  3,142,083
Percentage (of total returned) in favor                          89.9%                       100%
Votes against                                                   51,999                          0
Percentage (of total returned) against                            6.2%                          0
Votes abstaining                                                32,244                          0
Percentage (of total returned) abstaining                         3.9%                          0

</TABLE>

Proposal 2. Subject to attaining a settlement in the Class Action Lawsuit,
provide for an additional commitment of funds to the Trust by Equis II
Corporation 

<TABLE>
<CAPTION>

                                                    Class A  Interests          Class B Interests




<S>                                                          <C>                        <C>      
Total Interests of record                                    1,935,755                  3,142,083
Total votes returned                                           838,195                  3,142,083
Percentage returned                                              43.3%                       100%
Votes in favor                                                 746,912                  3,142,083
Percentage (of total returned) in favor                          89.1%                       100%
Votes against                                                   58,639                          0
Percentage (of total returned) against                            7.0%                          0
Votes abstaining                                                32,644                          0
Percentage (of total returned) abstaining                         3.9%                          0

</TABLE>

Proposal 3. Permit the Trust to acquire property in addition to equipment 

<TABLE>
<CAPTION>

                                                    Class A Interests           Class B Interests




<S>                                                          <C>                        <C>      
Total Interests of record                                    1,935,755                  3,142,083
Total votes returned                                           838,195                  3,142,083
Percentage returned                                              43.3%                       100%
Votes in favor                                                 707,680                  3,142,083
Percentage (of total returned) in favor                          84.4%                       100%
Votes against                                                   92,587                          0
Percentage (of total returned) against                           11.1%                          0
Votes abstaining                                                37,928                          0
Percentage (of total returned) abstaining                         4.5%                          0

</TABLE>


                                       12
<PAGE>


                             AFG Investment Trust D

                        Notes to the Financial Statements

                                   (Continued)

Proposal 4.  Extend the Trust's reinvestment period.

<TABLE>
<CAPTION>


                                                    Class A Interests           Class B Interests



<S>                                                         <C>                         <C>      
Total Interests of record                                   1,935,755                   3,142,083
Total votes returned                                          838,195                   3,142,083
Percentage returned                                             43.3%                        100%
Votes in favor                                                704,302                   3,142,083
Percentage (of total returned) in favor                         84.0%                        100%
Votes against                                                  94,987                           0
Percentage (of total returned) against                          11.3%                           0
Votes abstaining                                               38,906                           0
Percentage (of total returned) abstaining                        4.7%                           0
</TABLE>


Proposal 5. Modify certain fees payable to the Managing Trustee and EFG 
<TABLE>
<CAPTION>

                                                    Class A Interests           Class B Interests


<S>                                                         <C>                         <C>      
Total Interests of record                                   1,935,755                   3,142,083
Total votes returned                                          838,195                   3,142,083
Percentage returned                                             43.3%                        100%
Votes in favor                                                717,540                   3,141,083
Percentage (of total returned) in favor                         85.6%                       99.9%
Votes against                                                  81,207                           0
Percentage (of total returned) against                           9.7%                           0
Votes abstaining                                               39,448                       1,000
Percentage (of total returned) abstaining                        4.7%                        0.1%
</TABLE>

Proposal 6. Subject to attaining a settlement in the Class Action Lawsuit,
impose voting restrictions on Class B Interests 
<TABLE>
<CAPTION>

                                                    Class A Interests           Class B Interests


<S>                                                         <C>                         <C>      
Total Interests of record                                   1,935,755                   3,142,083
Total votes returned                                          838,195                   3,142,083
Percentage returned                                             43.3%                        100%
Votes in favor                                                733,432                   3,142,083
Percentage (of total returned) in favor                         87.5%                        100%
Votes against                                                  68,119                           0
Percentage (of total returned) against                           8.1%                           0
Votes abstaining                                               36,644                           0
Percentage (of total returned) abstaining                        4.4%                           0
</TABLE>


                                       13
<PAGE>

                             AFG Investment Trust D

                        Notes to the Financial Statements

                                   (Continued)

Proposal 7. Remove the current limitations on the amount and terms of the debt
the Trust may incur and modify the requirements with respect to joint ventures 
<TABLE>
<CAPTION>

                                                    Class A Interests           Class B Interests


<S>                                                         <C>                         <C>      
Total Interests of record                                   1,935,755                   3,142,083
Total votes returned                                          838,195                   3,142,083
Percentage returned                                             43.3%                        100%
Votes in favor                                                693,902                   3,142,083
Percentage (of total returned) in favor                         82.8%                        100%
Votes against                                                 103,271                           0
Percentage (of total returned) against                          12.3%                           0
Votes abstaining                                               41,022                           0
Percentage (of total returned) abstaining                        4.9%                           0

</TABLE>

NOTE 11 - SUBSEQUENT EVENT

     The Managing Trustee and certain of its affiliates were named as defendants
in the Class Action Lawsuit discussed in Note 7 herein. In connection with this
litigation and subject to a settlement being effected, the Managing Trustee has
agreed to adopt certain modifications to the Trust Agreement as described in the
Solicitation Statement referred to in Note 10 herein. One aspect of the proposed
settlement would result in using of a portion of Equis II Corporation's Class B
Capital Contribution to the Trust to (i) pay a second special cash distribution
to Class A Beneficiaries totaling $1,572,405, approximately $.75 per Class A
Interest, and (ii) invest $3,537,910 in the Trust's long-term business
activities. The remainder of the Class B Capital Contributions (not otherwise
used to repurchase Class A Interests in the Tender Offer closed on October 10,
1997 or to pay for offering and related costs associated with the Class B
Interests or to pay the first special cash distribution), $5,601,790 in total,
was returned to Equis II Corporation and the other third party Class B capital
contributors on July 6, 1998.



                                       14
<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 of AFG Investment Trust D ("the
Trust") 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, the outcome of the Class Action Lawsuit
described in Note 7 to the accompanying financial statements, and the ability of
Equis Financial Group Limited Partnership (formerly American Finance Group)
("EFG") to collect all rents due under the attendant lease agreements and to
successfully remarket the Trust's equipment, upon the expiration of such leases.

     The Year 2000 Issue is the result of computer programs being written using
two digits rather than four digits to define the applicable year. EFG's computer
programs were designed and written using four digits to define the applicable
year. As a result, EFG does not anticipate system failure or miscalculations
causing disruptions of operations. Based on recent assessments, EFG determined
that minimal modification of software is required so that its network operating
system will function properly with respect to dates in the year 2000 and
thereafter. EFG believes that with these modifications to the existing operating
system, the Year 2000 Issue will not pose significant operational problems for
its computer systems. EFG will utilize internal resources to upgrade software
for Year 2000 modifications and anticipates completing the Year 2000 project by
December 31, 1998, which is prior to any anticipated impact on its operating
system. The total cost of the Year 2000 project is expected to be insignificant
and have no effect on the results of operations of the Trust.


Three and six months ended June 30, 1998 compared to the three and six months
ended June 30, 1997:

Overview

     As an equipment leasing trust, 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
fluctuate. Presently, the Trust is a Nominal Defendant in a Class Action
Lawsuit. The outcome of the Class Action Lawsuit could alter the future business
operations of the Trust. See Note 7 to the accompanying financial statements.
The Trust's operations commenced in 1993.

Results of Operations

     For the three and six months ended June 30, 1998, the Trust recognized
lease revenue of $4,601,808 and $9,579,590, respectively, compared to $4,830,964
and $9,590,517, for the same periods in 1997. The decrease in lease revenue from
1997 to 1998 resulted principally from primary lease term expirations and the
sale of equipment. The decrease in lease revenue from 1997 to 1998 was partially
offset by lease revenue earned in 1998 related to certain equipment purchased
during the six months ended June 30, 1998. In the near-term, aggregate rental
revenues are expected to increase due to reinvestment of available proceeds in
other equipment. In addition, the level of lease revenue to be recognized by the
Trust in the future is expected to be impacted by the Amendment to the Trust
Agreement described in Note 8 to the accompanying financial 


                                       15
<PAGE>

                             AFG Investment Trust D

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION


statements; however, the extent of such impact cannot be determined at this
time. Over the long term, 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, 1998 was
$222,143 and $440,123, respectively, compared to $124,987 and $246,138 for the
same periods in 1997. Interest income was generated from temporary investments
of available cash in short-term money market instruments. Interest income in
1998 includes interest earned on unexpended proceeds from the issuance of Class
B Interests (see below). 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, 1998, the Trust sold equipment
having a net book value of $129,313 and $194,943, respectively, to existing
lessees and third parties. These sales resulted in a net loss for financial
statement purposes, of $78,113 and $119,503, respectively, compared to a net
loss of $85,952 and $90,898 on equipment having a net book value of $565,428 and
$576,874 for the same periods in 1997.

     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, 1998 was $2,681,811 and $5,969,318, respectively, compared to was
$3,070,399 and $6,212,518 for the same periods in 1997. 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 $897,884 and $1,830,304 or 19.5% and 19.1% of lease
revenue for the three and six months ended June 30, 1998, respectively, compared
to $651,951 and $1,306,943 or 13.5% and 13.6% of lease 


                                       16
<PAGE>

                             AFG Investment Trust D

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION


revenue for each of the same periods in 1997. The increase in interest expense
from 1997 to 1998 is the result of indebtedness obtained in connection with
reinvestment equipment. Interest expense in the near-term may increase due to
the financing of any newly acquired assets. 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 4.7% of lease revenue for each of the three and six
month periods ended June 30, 1998 compared to 4.5% of lease revenue for each of
the same periods in 1997. 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. Operating expenses were $206,812 and
$300,811 during the three and six months ended June 30, 1998 compared to $87,585
and $228,187 during the same periods in 1997. During the six months ended June
30, 1998, the Trust accrued or paid $128,000 for certain legal expenses related
to the Class Action Lawsuit described in Note 7 to the financial statements. 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, 1998,
operating activities generated net cash inflows of $7,088,976 compared to
$7,108,240, for the same period in 1997. (The latter has been adjusted to
reflect (i) equipment sale proceeds of approximately $1,618,000 received in
connection with the sale of a vessel and (ii) debt proceeds of $1,980,073 from
leveraging certain rail equipment, both of which amounts were due from EFG at
December 31, 1996 and reflected as cash inflows on the accompanying 1997
Statement of Cash Flows.) In the near-term, net cash inflows generated from
operating activities are expected to increase due to the acquisition of
reinvestment equipment. Subsequently, renewal, release 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.

     The Trust's equipment is leased by a number of creditworthy,
investment-grade companies and, to date, the Trust has not experienced any
material collection problems and has not considered it necessary to provide an
allowance for doubtful accounts. Notwithstanding a positive collection history,
there is no assurance that all future contracted rents will be collected or that
the credit quality of the Trust's lessees will be maintained. Collection risk
could increase in the future, particularly as the Trust remarkets its equipment
and enters re-lease agreements with different lessees. The Managing Trustee will
continue to evaluate and monitor the Trust's experience in collecting accounts
receivable to determine whether a future allowance for doubtful accounts may
become appropriate.

     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 


                                       17
<PAGE>

                             AFG Investment Trust D

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION


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. The Trust expended $87,748 to acquire equipment during
the six months ended June 30, 1998, pursuant to the reinvestment provisions of
the Trust Agreement. There were no equipment acquisitions during the same period
in 1997. During the six months ended June 30, 1998, the Trust realized equipment
sale proceeds of $75,440, compared to $485,976 during the same period in 1997.
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 obtained long-term financing in connection with certain equipment
leases. The repayments of principal related to such indebtedness are reported as
a component of financing activities. 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
increase as a result of leveraging to be obtained in connection with the
acquisition of reinvestment equipment. Thereafter, the amount of debt repayments
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 $22,162,280, $1,476,981 and $282,421 at the expiration of the
primary lease terms related to the Trust's proportionate ownership interest in a
Boeing 767-300 ER aircraft lease to Scandinavian Airlines System ("SAS"),
certain rail equipment and an MD-87 jet aircraft leased to Reno Air, Inc.,
respectively. SAS has the option to renew its lease agreement for two one year
periods at the expiration of the primary lease term on December 29, 1998.
Repayment of the associated indebtedness will be partly dependent on whether SAS
decides to renew its lease or the outcome of alternative remarketing efforts.

     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. At December 31, 1997, the Managing Trustee had a negative tax capital
account balance of $228,373.

     At June 30, 1998, the Trust had aggregate future minimum lease payments of
$29,187,866 from contractual lease agreements (see Note 3 to the financial
statements), a portion of which will be used to amortize the principal balance
of notes payable of $39,301,181 (see Note 6 to the financial statements and
discussion above). 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
reinvestment activities. The Trust expects to acquire additional reinvestment
equipment using on-hand cash and additional indebtedness. The extent of the
Trust's total future reinvestment activities will be influenced in part by
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.


                                       18
<PAGE>

                             AFG Investment Trust D

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION


     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. The Trust incurred offering costs in
the amount of $157,104 and professional service costs of $159,066 in connection
with this offering. 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 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 (see also Note 8 to the
accompanying financial statements).

     As described in the Prospectus for the offering of the Class B Interests,
the Managing Trustee used a portion of the net cash proceeds realized from the
offering of the Class B Interests to pay a one-time special cash distribution of
approximately $1.47 per Class A Interest to the Class A Beneficiaries of the
Trust. The Managing Trustee declared and paid this special cash distribution,
aggregating $3,075,818, to Class A Beneficiaries on August 15, 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. On October 10, 1997,
the Trust used $1,606,322 of the net proceeds realized from the issuance of the
Class B Interests to purchase 153,275 of the Class A Interests tendered as a
result of the offer. On April 28, 1998, the Trust used an additional $9,000 of
such proceeds to purchase 1,000 of the remaining Class A Interests. The
remaining net proceeds from the Class B offering of $10,703,105 will be used to
pay a Class B Capital Distribution and according to terms negotiated in
connection with settling the Class Action Lawsuit described in Note 7 (see also
Notes 9, 10 and 11 to the accompanying financial statements).

     Cash distributions paid to the Beneficiaries 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 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 Class A Interest
(the rate established and paid from the Trust's inception through September
1995) to an annualized rate of $1.26 per Class A Interest commencing in October
1995. In October 1996, the Managing Trustee increased the annualized
distribution rate to $1.64 per Class A Interest and has sustained this
distribution rate through the six months ended June 30, 1998. For the Class B
Beneficiaries, the Managing Trustee established and paid, from the Trust, an
annualized distribution of $0.66 per Class B Beneficiary commencing July 18,
1997. Future distributions, with respect to Class B Interests, will be
subordinate to certain distributions with respect to Class A Interests.

     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 


                                       19
<PAGE>

presented as a component of financing activities. For the six months ended June
30, 1998, the Trust declared total cash distributions of Distributable Cash From
Operations of $2,882,220. Of the total distributions, the Beneficiaries were
allocated $2,615,576 ($1,584,973 to Class A Beneficiaries and $1,030,603 to
Class B Beneficiaries); the Special Beneficiary was allocated $237,818; and the
Managing Trustee was allocated $28,826.

     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 Beneficiaries
should expect that cash distribution rates will fluctuate over the long term as
a result of future remarketing activities.


                                       20
<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:  None

Item 3.             Defaults upon Senior Securities
                    Response:  None

Item 4.             Submission of Matters to a Vote of Security Holders
                    Response:

                    Refer to Note 10 to the financial statements herein.

Item 5.             Other Information
                    Response:  None

Item 6(a).          Exhibits
                    Response:  None

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


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<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, 1998
                      ---------------------------------------


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


             Date:    August 14, 1998
                      ---------------------------------------







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