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 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


                             Commission file number
                                     0-21560


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


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


400 E. South Street, #500
Orlando, Florida                              32801
----------------------------             -----------------
(Address of principal                       (Zip Code)
executive offices)


Registrant's telephone number
(including area code)                     (407) 422-1574


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

  Item 2.  Management's Discussion and Analysis
             of Financial Condition and
             Results of Operations                           6-8


Part II

  Other Information                                          9


<PAGE>



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


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

Land and buildings on operating
  leases, less accumulated
  depreciation of $2,684,459 and
  $2,455,129                                  $23,331,687       $23,561,017
Net investment in direct financing
  leases                                        6,564,290         6,611,661
Investment in joint ventures                    2,535,467         2,567,786
Cash and cash equivalents                       1,485,806         1,272,386
Receivables, less allowance for
  doubtful accounts of $195 in 1998                28,999           119,575
Prepaid expenses                                   17,041            13,363
Accrued rental income                           1,580,642         1,517,726
Other assets                                      122,024           122,024
                                              -----------       -----------

                                              $35,665,956       $35,785,538
                                              ===========       ===========


LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                              $     4,901       $     6,508
Escrowed real estate taxes payable                 16,399            19,410
Distributions payable                             875,006           875,006
Due to related parties                              5,996             6,648
Rents paid in advance and deposits                117,461            68,333
                                              -----------       -----------
    Total liabilities                           1,019,763           975,905

Commitment (Note 2)

Minority interests                                500,495           501,401

Partners' capital                              34,145,698        34,308,232
                                              -----------       -----------

                                              $35,665,956       $35,785,538
                                              ===========       ===========



            See accompanying notes to condensed financial statements.

                                        1

<PAGE>



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

<TABLE>
<CAPTION>

                                                            Quarter Ended                       Six Months Ended
                                                               June 30,                            June 30,
                                                     1998             1997               1998              1997
                                                  ----------       ----------         ----------        -------
<S> <C> 
Revenues:
  Rental income from
    operating leases                              $  675,491       $  675,491         $1,350,982        $1,351,185
  Earned income from direct
    financing leases                                 206,345          208,934            413,405           420,751
  Contingent rental income                            42,996           44,440             62,764            69,083
  Interest and other income                           85,643           12,001             98,048            27,456
                                                  ----------       ----------         ----------        ----------
                                                   1,010,475          940,866          1,925,199         1,868,475
                                                  ----------       ----------         ----------        ----------

Expenses:
  General operating and
    administrative                                    44,999           40,998             74,457            74,858
  Professional services                                9,241           10,946             14,193            17,405
  Management fees to
    related parties                                    9,710            8,249             19,052            18,248
  State and other taxes                                1,036            2,056             24,370            25,779
  Depreciation and
    amortization                                     114,665          114,754            229,330           229,919
                                                  ----------       ----------         ----------        ----------
                                                     179,651          177,003            361,402           366,209
                                                  ----------       ----------         ----------        ----------

Income Before Minority
  Interests in Income of
  Consolidated Joint
  Ventures and Equity in
  Earnings of Unconsoli-
  dated Joint Ventures                               830,824          763,863          1,563,797         1,502,266

Minority Interests in
  Income of Consolidated
  Joint Ventures                                     (16,906)         (17,396)           (33,924)          (34,598)

Equity in Earnings of
  Unconsolidated Joint
  Ventures                                            57,604           58,359             97,605           105,163
                                                  ----------       ----------         ----------        ----------

Net Income                                        $  871,522       $  804,826         $1,627,478        $1,572,831
                                                  ==========       ==========         ==========        ==========

Allocation of Net Income:
  General partners                                $    8,715       $    8,048         $   16,275        $   15,728
  Limited partners                                   862,807          796,778          1,611,203         1,557,103
                                                  ----------       ----------         ----------        ----------

                                                  $  871,522       $  804,826         $1,627,478        $1,572,831
                                                  ==========       ==========         ==========        ==========

Net Income Per Limited
  Partner Unit                                    $     0.22       $     0.20         $     0.40        $     0.39
                                                  ==========       ==========         ==========        ==========

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 condensed financial statements.

                                        2

<PAGE>



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


                                       Six Months Ended          Year Ended
                                           June 30,             December 31,
                                             1998                   1997
                                       ----------------         --------

General partners:
  Beginning balance                      $   176,232           $   143,281
  Net income                                  16,275                32,951
                                         -----------           -----------
                                             192,507               176,232
                                         -----------           -----------

Limited partners:
  Beginning balance                       34,132,000            34,369,896
  Net income                               1,611,203             3,262,128
  Distributions ($0.45 and $0.88
    per limited partner unit,
    respectively)                         (1,790,012)           (3,500,024)
                                         -----------           -----------
                                          33,953,191            34,132,000
                                         -----------           -----------

Total partners' capital                  $34,145,698           $34,308,232
                                         ===========           ===========



            See accompanying notes to condensed financial statements.

                                        3

<PAGE>



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


                                                    Six Months Ended
                                                        June 30,
                                                 1998              1997
                                             -----------        -----------

Increase (Decrease) in Cash and
  Cash Equivalents:

    Net Cash Provided by Operating
      Activities                             $ 2,038,262        $ 1,792,914
                                             -----------        -----------

    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                            (1,790,012)        (1,790,012)
        Distributions to holders
          of minority interests                  (34,830)           (29,095)
                                             -----------        -----------
            Net cash used in
              financing activities            (1,824,842)        (1,819,107)
                                             -----------        -----------

Net Increase (Decrease) in Cash and
  Cash Equivalents                               213,420            (26,193)

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

Cash and Cash Equivalents at
  End of Period                              $ 1,485,806        $ 1,199,667
                                             ===========        ===========

Supplemental Schedule of Non-Cash
  Financing Activities:

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










            See accompanying notes to condensed financial statements.

                                        4

<PAGE>



                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
              Quarters and Six Months Ended June 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 six months ended June 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.

         The general partners are in the process of analyzing the effects of the
         consensus reached by the Financial  Accounting  Standards Board in EITF
         98-9, entitled "Accounting for Contingent Rent in the Interim Financial
         Periods,"  issued in May 1998. The general  partners do not expect that
         the  conclusions  reached in this consensus will have a material effect
         on the Partnership's financial position or results of operations.

2.       Commitment:

         During  1996,  the  Partnership  entered  into  an  agreement  with  an
         unrelated  third party to sell the Burger King property in Nashua,  New
         Hampshire.  The general  partners  believe that the  anticipated  sales
         price will exceed the Partnership's  cost attributable to the property;
         however, as of July 22, 1998, the sale had not occurred.

                                        5

<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 June 30, 1998, the
Partnership  owned  39  Properties,  including  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 six months ended
June 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 $2,038,262 and
$1,792,914  for the six months ended June 30, 1998 and 1997,  respectively.  The
increase in cash from  operations  for the six months  ended June 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 June 30, 1998, the Partnership had $1,485,806
invested in such short-term  investments,  as compared to $1,272,386 at December
31, 1997. The funds remaining at June 30, 1998,  after payment of  distributions
and other  liabilities,  will be used to meet the Partnership's  working capital
and other needs.

         Total liabilities of the Partnership,  including distributions payable,
increased to  $1,019,763  at June 30, 1998,  from $975,905 at December 31, 1997,
partially  as a result of an increase in rents paid in advance at June 30, 1998,
as  compared  to December  31,  1997.  The  general  partners  believe  that the
Partnership  has  sufficient  cash on hand to meet its current  working  capital
needs.

         During  1996,  the  Partnership  entered  into  an  agreement  with  an
unrelated third party to sell the Burger King Property in Nashua, New Hampshire.
The general  partners  believe that the anticipated  sales price will exceed the
Partnership's cost attributable to the Property;  however,  as of July 22, 1998,
the sale had not occurred.


                                        6

<PAGE>



Liquidity and Capital Resources - Continued

         Based on cash from  operations,  and for the six months  ended June 30,
1998,   accumulated  excess  operating   reserves,   the  Partnership   declared
distributions  to the limited  partners of $1,790,012 and $1,750,012 for the six
months  ended June 30,  1998 and 1997,  respectively  ($875,006  for each of the
quarters ended June 30, 1998 and 1997).  This represents  distributions of $0.45
and $0.44 per unit for the six months ended June 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 six months ended June 30, 1998 and 1997.
No amounts distributed to the limited partners for the six months ended June 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 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 six months ended June 30, 1998 and 1997, the Partnership and
its  consolidated  joint ventures,  Denver Joint Venture and  CNL/Airport  Joint
Venture,  owned and leased 36 wholly owned  Properties to operators of fast-food
and family-style  restaurant  chains.  In connection  therewith,  during the six
months ended June 30, 1998 and 1997, the  Partnership,  Denver Joint Venture and
CNL/Airport  Joint Venture earned  $1,764,387 and $1,771,936,  respectively,  in
rental  income from  operating  leases and earned  income from direct  financing
leases, $881,836 and $884,425 of which was earned during the quarters ended June
30, 1998 and 1997, respectively.  In addition,  during the six months ended June
30, 1998 and 1997, the Partnership earned $62,764 and $69,083,  respectively, in
contingent  rental  income,  $42,996 and $44,440 of which was earned  during the
quarters ended June 30, 1998 and 1997, respectively.

         In  addition,  for the six  months  ended June 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 six months ended June 30,
1998 and 1997,  the  Partnership  earned  $97,605  and  $105,163,  respectively,
attributable to net income earned by unconsolidated joint ventures,  $57,604 and
$58,359

                                        7

<PAGE>



Results of Operations - Continued

of  which  was  earned  during  the  quarters  ended  June 30,  1998  and  1997,
respectively.  Net  income  earned by joint  ventures  decreased  during the six
months ended June 30,  1998,  as compared to the six months ended June 30, 1997,
due to Ashland Joint  Venture  adjusting  estimated  contingent  rental  amounts
accrued at December 31, 1997,  to actual  amounts  billed  during the six months
ended June 30, 1998.

         During the six months  ended June 30,  1998 and 1997,  the  Partnership
earned $98,048 and $27,456,  respectively, in interest and other income, $85,643
and  $12,001 of which was earned  during the  quarters  ended June 30,  1998 and
1997, respectively. The increase in interest and other income during the quarter
and  six  months  ended  June  30,  1998,  was  primarily  attributable  to  the
Partnership  collecting and  recognizing  $60,000 in other income 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.

         Operating expenses,  including  depreciation and amortization  expense,
were  $361,402  and  $366,209  for the six months  ended June 30, 1998 and 1997,
respectively,  $179,651 and $177,003 of which were incurred  during the quarters
ended June 30, 1998 and 1997, respectively.

         The general partners are in the process of analyzing the effects of the
consensus  reached by the  Financial  Accounting  Standards  Board in EITF 98-9,
entitled  "Accounting  for Contingent  Rent in the Interim  Financial  Periods,"
issued in May 1998.  The general  partners  do not expect  that the  conclusions
reached  in this  consensus  will have a  material  effect on the  Partnership's
financial position or results of operations.

                                        8

<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 June 30, 1998.

                                        9

<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 10th day of August, 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)