FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


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

                For the quarterly period ended September 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
                ------------------------------------------------


                             Commission file number
                                     0-21560
                          ----------------------------


                            CNL Income Fund XI, Ltd.
     -----------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                    Florida                              59-3078854
          (State of other jurisdiction                (I.R.S. Employer
       of incorporation or organization)             Identification No.)


              400 E. South Street
                Orlando, Florida                            32801
    (Address of principal executive offices)             (Zip Code)


        Registrant's telephone number
        (including area code)                         (407) 650-1000


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  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


<PAGE>








                                    CONTENTS




Part I                                                         Page

    Item 1.  Financial Statements:

       Condensed Balance Sheets                                1

       Condensed Statements of Income                          2

       Condensed Statements of Partners' Capital               3

       Condensed Statements of Cash Flows                      4

       Notes to Condensed Financial Statements                 5-6

    Item 2.  Management's Discussion and Analysis
                  of Financial Condition and
                  Results of Operations                        7-11


Part II

    Other Information                                          12


<PAGE>


                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                             September 30,            December 31,
                                                                                  1998                    1997
                                                                            -----------------       -----------------
<S> <C>
                        ASSETS

Land and buildings on operating leases, less
    accumulated depreciation of $2,799,124
    and $2,455,129                                                                $23,217,022            $23,561,017
Net investment in direct financing leases                                           6,539,506              6,611,661
Investment in joint ventures                                                        2,528,168              2,567,786
Cash and cash equivalents                                                           1,492,088              1,272,386
Receivables, less allowance for doubtful
    accounts of $20,283 in 1998                                                        28,202                119,575
Prepaid expenses                                                                       14,612                 13,363
Accrued rental income                                                               1,607,969              1,517,726
Other assets                                                                          122,024                122,024
                                                                            -----------------       -----------------

                                                                                  $35,549,591            $35,785,538
                                                                            =================       =================


                    LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                                                              $         4,393         $        6,508
Escrowed real estate taxes payable                                                     24,764                 19,410
Distributions payable                                                                 875,006                875,006
Due to related parties                                                                  5,263                  6,648
Rents paid in advance and deposits                                                     69,832                 68,333
                                                                            -----------------       -----------------
       Total liabilities                                                              979,258                975,905

Minority interest                                                                     501,915                501,401

Partners' capital                                                                  34,068,418             34,308,232
                                                                            -----------------       -----------------

                                                                                  $35,549,591            $35,785,538
                                                                            =================       =================
</TABLE>


                 See accompanying notes to financial statements.

                                       1
<PAGE>


                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                         CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>

                                                           Quarter Ended                     Nine Months Ended
                                                           September 30,                       September 30,
                                                      1998               1997              1998             1997
                                                   ------------       ------------      ------------     ------------
<S> <C>
Revenues:
    Rental income from operating
       leases                                        $ 672,887        $   675,491        $2,023,869       $2,026,676
    Earned income from direct financing
       leases                                          195,141            208,391           608,546          629,142
    Contingent rental income                            50,903             46,040           113,667          115,123
    Interest and other income                           16,421             25,999           114,469           53,455
                                                   ------------       ------------      ------------     ------------
                                                       935,352            955,921         2,860,551        2,824,396
                                                   ------------       ------------      ------------     ------------
Expenses:
    General operating and
       administrative                                   43,130             36,804           117,587          111,662
    Professional services                                9,699              6,046            23,892           23,451
    Management fees to related parties                   9,923              9,327            28,975           27,575
    Real estate taxes                                    2,179                 --             2,179               --
    State and other taxes                                   --                 --            24,370           25,779
    Depreciation and amortization                      114,665            114,665           343,995          344,584
                                                   ------------       ------------      ------------     ------------
                                                       179,596            166,842           540,998          533,051
                                                   ------------       ------------      ------------     ------------
Income Before Minority Interest in
    Income of Consolidated Joint
    Ventures and Equity in Earnings of
    Unconsolidated Joint Ventures                      755,756            789,079         2,319,553        2,291,345

Minority Interest in Income of
    Consolidated Joint Ventures                        (16,760 )          (17,628 )         (50,684 )        (52,226 )

Equity in Earnings of Unconsolidated
    Joint Ventures                                      58,730             58,782           156,335          163,945
                                                   ------------       ------------      ------------     ------------

Net Income                                          $  797,726        $   830,233        $2,425,204       $2,403,064
                                                   ============       ============      ============     ============

Allocation of Net Income:
    General partners                                $    7,977        $     8,303        $   24,252       $   24,031
    Limited partners                                   789,749            821,930         2,400,952        2,379,033
                                                   ------------       ------------      ------------     ------------

                                                    $  797,726        $   830,233        $2,425,204       $2,403,064
                                                   ============       ============      ============     ============

Net Income Per Limited Partner Unit                 $     0.20        $      0.21        $     0.60       $     0.59
                                                   ============       ============      ============     ============

Weighted Average Number of Limited
    Partner Units Outstanding                        4,000,000          4,000,000         4,000,000        4,000,000
                                                   ============       ============      ============     ============

</TABLE>

                 See accompanying notes to financial statements.

                                       2
<PAGE>


                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                    CONDENSED STATEMENTS OF PARTNERS' CAPITAL


<TABLE>
<CAPTION>

                                                                   Nine Months Ended              Year Ended
                                                                     September 30,               December 31,
                                                                         1998                        1997
                                                              ----------------------------     ------------------
<S> <C>
  General partners:
      Beginning balance                                              $     176,232               $     143,281
      Net income                                                            24,252                      32,951
                                                                   ----------------             ---------------
                                                                           200,484                     176,232
                                                                   ----------------             ---------------
  Limited partners:
      Beginning balance                                                 34,132,000                  34,369,896
      Net income                                                         2,400,952                   3,262,128
      Distributions ($0.67 and
         $0.88 per limited partner
         unit, respectively)                                            (2,665,018 )                (3,500,024 )
                                                                   ----------------             ---------------
                                                                        33,867,934                  34,132,000
                                                                   ----------------             ---------------

  Total partners' capital                                              $34,068,418                 $34,308,232
                                                                   ================             ===============


</TABLE>
                 See accompanying notes to financial statements.

                                       3
<PAGE>


                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                              Nine Months Ended
                                                                                September 30,
                                                                         1998                    1997
                                                                    ---------------         ---------------
<S> <C>
Increase (Decrease) in Cash and Cash
   Equivalents:

      Net Cash Provided by Operating Activities                       $  2,934,890            $  2,743,042
                                                                   ----------------         ---------------

      Cash Flows from Investing Activities:
         Investment in joint ventures                                           --              (1,044,750 )
         Decrease in restricted cash                                            --               1,044,750
                                                                   ----------------         ---------------
                Net cash provided by investing
                   activities                                                    --                       --
                                                                   ----------------         ---------------

      Cash Flows from Financing Activities:
         Distributions to limited partners                              (2,665,018 )            (2,665,018 )
         Distributions to holders of minority
             interests                                                     (50,170 )               (41,783 )
                                                                   ----------------         ---------------
                Net cash used in financing
                   activities                                           (2,715,188 )            (2,706,801 )
                                                                   ----------------         ---------------

Net Increase in Cash and Cash Equivalents                                  219,702                  36,241

Cash and Cash Equivalents at Beginning
   of Period                                                             1,272,386               1,225,860
                                                                   ----------------         ---------------

Cash and Cash Equivalents at End of
   Period                                                             $  1,492,088            $  1,262,101
                                                                   ================         ===============

Supplemental Schedule of Non-Cash Investing
   and Financing Activities:

      Land and building under operating lease
         exchanged for land and building under
         operating lease                                             $     850,381           $          --
                                                                   ================         ===============

      Distributions declared and unpaid at end of
         period                                                      $     875,006           $     875,006
                                                                   ================         ===============

</TABLE>

                 See accompanying notes to financial statements.

                                       4
<PAGE>


                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
           Quarters and Nine Months Ended September 30, 1998 and 1997


1.       Basis of Presentation:

         The accompanying  unaudited  condensed  financial  statements have been
         prepared in accordance  with the  instructions  to Form 10-Q and do not
         include  all  of the  information  and  note  disclosures  required  by
         generally  accepted  accounting  principles.  The financial  statements
         reflect all adjustments,  consisting of normal  recurring  adjustments,
         which are, in the opinion of management,  necessary to a fair statement
         of the results for the interim periods presented. Operating results for
         the  quarter and nine  months  ended  September  30,  1998,  may not be
         indicative  of the  results  that may be  expected  for the year ending
         December  31, 1998.  Amounts as of December  31, 1997,  included in the
         financial   statements,   have  been  derived  from  audited  financial
         statements as of that date.

         These unaudited financial statements should be read in conjunction with
         the financial statements and notes thereto included in Form 10-K of CNL
         Income Fund XI, Ltd. (the  "Partnership")  for the year ended  December
         31, 1997.

         The  Partnership  accounts for its 85 percent  interest in Denver Joint
         Venture and its 77.33% interest in CNL/Airport  Joint Venture using the
         consolidation  method.  Minority interests represent the minority joint
         venture  partners'  proportionate  share of equity in the Partnership's
         consolidated joint ventures. All significant  intercompany accounts and
         transactions have been eliminated.

         In May  1998,  the  Financial  Accounting  Standards  Board  reached  a
         consensus in EITF 98-9, entitled "Accounting for Contingent Rent in the
         Interim Financial  Periods."  Adoption of this consensus did not have a
         material effect on the Partnership's  financial  position or results of
         operations.

2.        Land and Building on Operating Leases:

         In  September  1998,  the tenant of the  property  in  Columbus,  Ohio,
         exercised  its  option  under  the  terms of its  lease  agreement,  to
         exchange  one  existing  property  with  a  replacement   property.  In
         conjunction  therewith,  the  Partnership  exchanged  the  Burger  King
         property in  Columbus,  Ohio,  for a Burger  King  property in Danbury,
         Connecticut.  The lease for the property in Columbus, Ohio, was amended
         to allow the  property in Danbury,  Connecticut  to continue  under the
         terms of the original lease. All closing costs were paid by the tenant.
         The Partnership accounted for this as a nonmonetary exchange of similar
         assets  and  recorded  the  acquisition  of the  property  in  Danbury,
         Connecticut at the net book value of the property in Columbus, Ohio. No
         gain or  loss  was  recognized  due to this  being  accounted  for as a
         nonmonetary exchange of similar assets.


                                       5
<PAGE>


                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
               NOTES TO CONDENSED FINANCIAL STATEMENTS - CONTINUED
           Quarters and Nine Months Ended September 30, 1998 and 1997


3.        Subsequent Event:

         In October  1998,  the  Partnership  sold its  property in Nashua,  New
         Hampshire,  to a third  party for  $1,748,000  and  received  net sales
         proceeds of  $1,630,296,  resulting in a gain of $461,862 for financial
         reporting purposes.


                                       6
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         CNL Income  Fund XI,  Ltd.  (the  "Partnership")  is a Florida  limited
partnership  that was organized on August 20, 1991, to acquire for cash,  either
directly or through  joint  venture  arrangements,  both newly  constructed  and
existing  restaurants,  as well as properties upon which  restaurants were to be
constructed  (the  "Properties"),  which are leased  primarily  to  operators of
national and regional  fast-food and family-style  restaurant chains. The leases
are  triple-net  leases,  with  the  lessees  responsible  for all  repairs  and
maintenance,  property taxes, insurance and utilities. As of September 30, 1998,
the Partnership  owned 39 Properties,  which included four  Properties  owned by
joint ventures in which the  Partnership is a co-venturer and one Property owned
with an affiliate as tenants-in-common.

Liquidity and Capital Resources

         The  Partnership's  primary source of capital for the nine months ended
September  30, 1998 and 1997,  was cash from  operations  (which  includes  cash
received from tenants, distributions from joint ventures, and interest and other
income  received,  less  cash  paid for  expenses).  Cash  from  operations  was
$2,934,890 and $2,743,042 for the nine months ended September 30, 1998 and 1997,
respectively.  The  increase in cash from  operations  for the nine months ended
September  30, 1998,  is primarily a result of changes in income and expenses as
described  in "Results  of  Operations"  below and changes in the  Partnership's
working capital.

         Currently,  rental income from the Partnership's Properties is invested
in money market accounts or other short-term,  highly liquid investments pending
the  Partnership's  use of such  funds to pay  Partnership  expenses  or to make
distributions  to the  partners.  At September  30, 1998,  the  Partnership  had
$1,492,088 invested in such short-term investments, as compared to $1,272,386 at
December 31, 1997. The funds  remaining at September 30, 1998,  after payment of
distributions  and  other  liabilities,  will be used to meet the  Partnership's
working capital and other needs.

         In October  1998,  the  Partnership  sold its  Property in Nashua,  New
Hampshire,  to a third party for  $1,748,000  and received net sales proceeds of
$1,630,296,  resulting in a gain of $461,862 for financial  reporting  purposes.
The  Partnership  intends to reinvest  the net sales  proceeds in a  replacement
Property.

         Total liabilities of the Partnership,  including distributions payable,
increased to $979,258 at September 30, 1998, from $975,905 at December 31, 1997.
The general partners believe that the Partnership has sufficient cash on hand to
meet its current working capital needs.



                                       7
<PAGE>


Liquidity and Capital Resources - Continued

         Based on cash from operations,  and for the nine months ended September
30, 1998,  accumulated  excess  operating  reserves,  the  Partnership  declared
distributions  to the limited partners of $2,665,018 and $2,625,018 for the nine
months ended September 30, 1998 and 1997, respectively ($875,006 for each of the
quarters ended September 30, 1998 and 1997).  This represents  distributions  of
$0.67 and $0.66 per unit for the nine months ended  September 30, 1998 and 1997,
respectively ($0.22 per unit for each applicable quarter). No distributions were
made to the general  partners for the  quarters and nine months ended  September
30, 1998 and 1997. No amounts  distributed to the limited  partners for the nine
months  ended  September  30,  1998 and 1997,  are  required  to be or have been
treated by the  Partnership  as a return of capital for purposes of  calculating
the  limited  partners'  return on their  adjusted  capital  contributions.  The
Partnership  intends to continue to make  distributions  of cash  available  for
distribution to the limited partners on a quarterly basis.

         The general  partners  have been  informed by CNL  American  Properties
Fund, Inc.  ("APF"),  an affiliate of the general  partners,  that it intends to
significantly  increase its asset base by proposing to acquire affiliates of the
general partners which have similar restaurant  property  portfolios,  including
the Partnership. APF is a real estate investment trust whose primary business is
the ownership of restaurant properties leased on a long-term, "triple-net" basis
to  operators  of national  and regional  restaurant  chains.  Accordingly,  the
general  partners  anticipate  that  APF  will  make an  offer  to  acquire  the
Partnership  in  exchange  for  securities  of APF.  The general  partners  have
recently retained  financial and legal advisors to assist them in evaluating and
negotiating  any offer that may be proposed by APF.  However,  at this time, APF
has made no such offer. In the event that an offer is made, the general partners
will  evaluate it and if the general  partners  believe  that the offer is worth
pursuing,  the general partners will promptly inform the limited  partners.  Any
agreement  to sell the  Partnership  would be  subject  to the  approval  of the
limited partners in accordance with the terms of the partnership agreement.

         The Partnership's  investment strategy of acquiring Properties for cash
and  leasing  them  under  triple-net  leases to  operators  who meet  specified
financial standards minimizes the Partnership's  operating expenses. The general
partners  believe that the leases will  continue to generate cash flow in excess
of operating expenses.

         The general  partners have the right,  but not the obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the operations of the Partnership.

Results of Operations

         During the nine months ended  September 30, 1997, the  Partnership  and
its  consolidated  joint ventures,  Denver Joint Venture and  CNL/Airport  Joint
Venture, owned and leased 36 wholly owned Properties, and during the nine months
ended September 30, 1998, the Partnership  and its  consolidated  joint ventures
owned and leased 37 wholly owned Properties (including one Property in Columbus,
Ohio  exchanged  for one  Property in Danbury,  Connecticut),  to  operators  of
fast-food and family-style  restaurant chains. In connection  therewith,  during
the nine months ended September 30, 1998 and 1997, the Partnership, Denver Joint
Venture and CNL/Airport


                                       8
<PAGE>


Results of Operations - Continued

Joint Venture earned $2,632,415 and $2,655,818,  respectively,  in rental income
from operating leases and earned income from direct financing  leases,  $868,028
and $883,882 of which was earned  during the quarters  ended  September 30, 1998
and 1997, respectively.

         In addition, for the nine months ended September 30, 1998 and 1997, the
Partnership  owned and leased two  Properties  indirectly  through  other  joint
venture  arrangements  and owned and leased one  Property  with an  affiliate as
tenants-in-common.  In  connection  therewith,  during  the  nine  months  ended
September  30, 1998 and 1997,  the  Partnership  earned  $156,335 and  $163,945,
respectively,   attributable  to  net  income  earned  by  unconsolidated  joint
ventures,  $58,730 and  $58,782 of which was earned  during the  quarters  ended
September 30, 1998 and 1997,  respectively.  Net income earned by joint ventures
decreased  during the nine months ended  September  30, 1998, as compared to the
nine months ended  September 30, 1997,  due to Ashland  Joint Venture  adjusting
estimated  contingent  rental  amounts  accrued at December 31, 1997,  to actual
amounts billed during the nine months ended September 30, 1998.

         During  the  nine  months  ended  September  30,  1998  and  1997,  the
Partnership  earned  $114,469 and $53,455,  respectively,  in interest and other
income,  $16,421  and  $25,999 of which was earned  during  the  quarters  ended
September  30, 1998 and 1997,  respectively.  The increase in interest and other
income   during  the  nine  months  ended   September  30,  1998  was  primarily
attributable  to the  Partnership  collecting and  recognizing  $60,000 in other
income in May 1998, as a result of executing an amendment to a purchase and sale
agreement  with a third  party to extend the  closing  date for the Burger  King
Property located in Nashua,  New Hampshire.  In accordance with the terms of the
amendment,  the Partnership was deemed to have earned the $60,000 upon execution
of the amendment to extend the closing date of this Property.  This Property was
sold in October 1998, as described above in "Liquidity and Capital Resources."

         Operating expenses,  including  depreciation and amortization  expense,
were  $540,998 and $533,051  for the nine months  ended  September  30, 1998 and
1997,  respectively,  $179,596  and $166,842 of which were  incurred  during the
quarters ended September 30, 1998 and 1997, respectively.

         In May  1998,  the  Financial  Accounting  Standards  Board  reached  a
consensus in EITF 98-9, entitled  "Accounting for Contingent Rent in the Interim
Financial Periods." Adoption of this consensus did not have a material effect on
the Partnership's financial position or results of operations.

         The Year 2000 problem is the result of information  technology  systems
and embedded  systems  (products which are made with  microprocessor  (computer)
chips such as HVAC systems,  physical  security  systems and elevators)  using a
two-digit  format,  as  opposed  to four  digits,  to  indicate  the year.  Such
information  technology and embedded systems may be unable to properly recognize
and process date-sensitive information beginning January 1, 2000.

         The  Partnership  does  not have any  information  technology  systems.
Affiliates  of the general  partners  provide all services  requiring the use of
information  technology  systems  pursuant to a  management  agreement  with the
Partnership. The maintenance of embedded systems, if any,

                                       9
<PAGE>


Results of Operations - Continued

at the  Partnership's  properties  is the  responsibility  of the tenants of the
properties in accordance with the terms of the Partnership's leases. The general
partners and  affiliates  have  established  a team  dedicated to reviewing  the
internal   information   technology   systems  used  in  the  operation  of  the
Partnership,  and the information  technology and embedded  systems and the Year
2000  compliance  plans of the  Partnership's  tenants,  significant  suppliers,
financial institutions and transfer agent.

         The  information  technology  infrastructure  of the  affiliates of the
general  partners  consists of a network of personal  computers and servers that
were  obtained   from  major   suppliers.   The   affiliates   utilize   various
administrative  and financial  software  applications on that  infrastructure to
perform the business functions of the Partnership.  The inability of the general
partners  and  affiliates  to identify  and timely  correct  material  Year 2000
deficiencies  in  the  software  and/or   infrastructure   could  result  in  an
interruption in, or failure of, certain of the Partnership's business activities
or operations.  Accordingly,  the general partners and affiliates have requested
and are evaluating  documentation from the suppliers of the affiliates regarding
the Year  2000  compliance  of  their  products  that  are used in the  business
activities or operations of the  Partnership.  The costs expected to be incurred
by the general  partners and  affiliates to become Year 2000  compliant  will be
incurred by the general  partners and  affiliates;  therefore,  these costs will
have no impact on the Partnership's financial position or results of operations.

         The  Partnership  has  material  third  party  relationships  with  its
tenants,  financial  institutions and transfer agent. The Partnership depends on
its  tenants  for  rents  and  cash  flows,   its  financial   institutions  for
availability  of cash and its  transfer  agent to  maintain  and track  investor
information.  If any of these third parties are unable to meet their obligations
to the  Partnership  because of the Year 2000  deficiencies,  such a failure may
have a material impact on the  Partnership.  Accordingly,  the general  partners
have requested and are evaluating  documentation from the Partnership's tenants,
financial  institutions,   and  transfer  agent  relating  to  their  Year  2000
compliance  plans.  At this time,  the general  partners  have not yet  received
sufficient   certifications   to  be  assured   that  the   tenants,   financial
institutions,  and  transfer  agent  have fully  considered  and  mitigated  any
potential material impact of the Year 2000 deficiencies.  Therefore, the general
partners do not, at this time, know of the potential costs to the Partnership of
any  adverse  impact  or effect of any Year  2000  deficiencies  by these  third
parties.

         The general  partners  currently  expect that all year 2000  compliance
testing  and any  necessary  remedial  measures  on the  information  technology
systems used in the business  activities and operations of the Partnership  will
be completed prior to June 30, 1999.  Based on the progress the general partners
and affiliates  have made in identifying and addressing the  Partnership's  Year
2000 issues and the plan and timeline to complete the  compliance  program,  the
general  partners  do  not  foresee   significant   risks  associated  with  the
Partnership's  Year 2000 compliance at this time.  Because the general  partners
and affiliates  are still  evaluating the status of the systems used in business
activities  and  operations  of the  Partnership  and the  systems  of the third
parties with which the Partnership  conducts its business,  the general partners
have not yet  developed  a  comprehensive  contingency  plan and are  unable  to
identify "the most reasonably

                                       10
<PAGE>


Results of Operations - Continued

likely  worst case  scenario"  at this time.  As the general  partners  identify
significant  risks related to the  Partnership's  Year 2000 compliance or if the
Partnership's  Year 2000 compliance  program's  progress deviates  substantially
from the anticipated  timeline,  the general  partners will develop  appropriate
contingency plans.

                                       11
<PAGE>


                           PART II. OTHER INFORMATION


Item 1.          Legal Proceedings.  Inapplicable.

Item 2.          Changes in Securities.  Inapplicable.

Item 3.          Defaults upon Senior Securities.  Inapplicable.

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

                      Inapplicable.

Item 5.          Other Information.  Inapplicable.

Item 6.          Exhibits and Reports on Form 8-K.

                 (a)  Exhibits - None.

                 (b)  No reports on Form 8-K were filed during the quarter ended
                      September 30, 1998.

                                       12
<PAGE>


                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended,  the  registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                  DATED this 11th day of November, 1998.


                           CNL INCOME FUND XI, LTD.

                           By: CNL REALTY CORPORATION
                                 General Partner


                                 By:  /s/ James M. Seneff, Jr.
                                      ------------------------------
                                      JAMES M. SENEFF, JR.
                                      Chief Executive Officer
                                      (Principal Executive Officer)


                                 By:  /s/ Robert A. Bourne
                                      ------------------------------
                                      ROBERT A. BOURNE
                                      President and Treasurer
                                      (Principal Financial and
                                      Accounting Officer)