SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)
[X]   Annual Report Under Section 13 or 15(d) of the  Securities  Exchange Act
      of 1934

                 For the fiscal year ended December 31, 2003

[ ]   Transition  Report Under Section 13 or 15(d) of the Securities  Exchange
      Act of 1934

                For the transition period from_______to_______

                         Commission file number 2-85829

               DREXEL BURNHAM  LAMBERT REAL ESTATE  ASSOCIATES II
                 (Name of small business issuer in its charter)

          New York                                                 13-3202289
(State or other jurisdiction of                                (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                         55 Beattie Place, P.O. Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)

                    Issuer's telephone number (864) 239-1000

        Securities registered under Section 12(b) of the Exchange Act:

                                      None

        Securities registered under Section 12(g) of the Exchange Act:

                            Limited Partnership Units
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act of 1934 during the past 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 ___

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year $1,696,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests, as of December 31, 2003. No market exists for the limited partnership
interests of the Registrant,  and,  therefore,  no aggregate market value can be
determined.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None


<PAGE>


The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including,  without limitation:  national and local
economic  conditions;  the terms of  governmental  regulations  that  affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates;  financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest;  real estate risks, including variations of real estate values and
the general  economic  climate in local markets and  competition  for tenants in
such markets;  litigation,  including  costs  associated  with  prosecuting  and
defending  claims  and  any  adverse   outcomes,   and  possible   environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.


                                     PART I

Item 1.     Description of Business

Drexel  Burnham  Lambert  Real  Estate  Associates  II  (the   "Partnership"  or
"Registrant")  was  organized  on  November  2,  1983  as  a  New  York  limited
partnership  pursuant to the Limited  Partnership Laws of the State of New York.
The general partner of the Partnership is DBL Properties  Corporation  ("DBL" or
the "General  Partner"),  an affiliate of Apartment  Investment  and  Management
Company  ("AIMCO"),   a  publicly  traded  real  estate  investment  trust.  The
Partnership  Agreement provides that the Partnership is to terminate on December
31, 2032, unless terminated prior to such date.

The  Partnership's  primary business is to operate and hold existing real estate
properties for investment. The Partnership acquired interests in five properties
during  1984  and  1985.  The  Partnership  continues  to own  and  operate  one
residential property, Presidential House Apartments.

Commencing in February 1984 pursuant to the Prospectus,  the Partnership offered
20,000 Limited  Partnership  Units (the  "Units").  A total of 37,273 Units were
sold to the public at $500 per Unit aggregating to approximately $18,637,000. In
addition,  the  General  Partner  contributed  $1,000 for its 1% interest in the
Partnership.  The offering  closed on October 10, 1984.  No Limited  Partner has
made any additional  capital  contribution after that date. The Limited Partners
of the Partnership share in the benefits of ownership of the Partnership's  real
estate property investments according to the number of Units held.

The Partnership  has no employees.  Management and  administrative  services are
provided by the General Partner and by agents  retained by the General  Partner.
An affiliate of the General Partner has been providing such property  management
services.

Risk Factors

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Partnership's  property.  The number and quality of competitive  properties,
including those which may be managed by an affiliate of the General Partner,  in
such  market  area  could have a  material  effect on the rental  market for the
apartments at the  Partnership's  property and the rents that may be charged for
such apartments. While the General Partner and its affiliates own and/or control
a  significant  number of  apartment  units in the  United  States,  such  units
represent an  insignificant  percentage of total  apartment  units in the United
States and competition for the apartments is local.

Laws benefiting  disabled persons may result in the Partnership's  incurrence of
unanticipated  expenses.  Under the Americans with  Disabilities Act of 1990, or
ADA,  all places  intended to be used by the public are required to meet certain
Federal  requirements  related to access and use by disabled persons.  Likewise,
the Fair Housing Amendments Act of 1988, or FHAA, requires apartment  properties
first occupied after March 13, 1990 to be accessible to the  handicapped.  These
and other  Federal,  state  and  local  laws may  require  modifications  to the
Partnership's  property, or restrict renovations of the property.  Noncompliance
with these laws could result in the  imposition  of fines or an award of damages
to  private  litigants  and  also  could  result  in an  order  to  correct  any
non-complying  feature,  which could result in substantial capital expenditures.
Although  the  General  Partner  believes  that the  Partnership's  property  is
substantially in compliance with present requirements, the Partnership may incur
unanticipated expenses to comply with the ADA and the FHAA.

Both the income and expenses of operating the property owned by the  Partnership
are subject to factors outside of the Partnership's  control, such as changes in
the supply and demand for  similar  properties  resulting  from  various  market
conditions, increases/decreases in unemployment or population shifts, changes in
the  availability of permanent  mortgage  financing,  changes in zoning laws, or
changes in patterns or needs of users. In addition,  there are risks inherent in
owning  and  operating  residential   properties  because  such  properties  are
susceptible  to the  impact of  economic  and other  conditions  outside  of the
control of the Partnership.

There have been,  and it is possible  there may be other,  Federal,  state,  and
local  legislation  and  regulations  enacted  relating to the protection of the
environment.  The Partnership is unable to predict the extent,  if any, to which
such new  legislation  or  regulations  might occur and the degree to which such
existing or new legislation or regulations  might adversely  affect the property
owned by the Partnership.

The  Partnership  monitors its property for evidence of  pollutants,  toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental testing has been performed,  which resulted in no material adverse
conditions or liabilities.  In no case has the Partnership  received notice that
it is a potentially  responsible party with respect to an environmental clean up
site.

A further  description  of the  Partnership's  business  is included in "Item 6.
Management's Discussion and Analysis or Plan of Operation".


<PAGE>



Item 2.     Description of Property

The following table sets forth the Partnership's investment in property:

<TABLE>
<CAPTION>

                                  Date of
Property                          Purchase      Type of Ownership           Use

<S>                               <C>   <C>
Presidential House Apartments     10/22/84  Fee ownership subject         Apartments
  North Miami Beach, FL                     to first mortgage             203 units
</TABLE>

Schedule of Property

Set forth  below for the  Partnership's  property is the gross  carrying  value,
accumulated  depreciation,  depreciable life, method of depreciation and Federal
tax basis.

<TABLE>
<CAPTION>

                          Gross
                        Carrying    Accumulated                            Federal
Property                  Value    Depreciation      Rate      Method     Tax Basis
                            (in thousands)                             (in thousands)

<S>                      <C>          <C>         <C>                      <C>
Presidential House       $8,666       $6,647      5-31.5 yrs     SL        $ 1,988
</TABLE>

See  "Note  A" to the  financial  statements  included  in  "Item  7.  Financial
Statements"  for  a  description  of  the   Partnership's   capitalization   and
depreciation policies.

Schedule of Property Indebtedness

The  following  table  sets  forth  certain  information  relating  to the loans
encumbering the Partnership's property.

<TABLE>
<CAPTION>

                   Principal
                   Balance At                                          Principal
                  December 31,   Interest    Period    Maturity        Balance At
Property            2003 (1)       Rate    Amortized     Date     Due at maturity (1)
                 (in thousands)                                      (in thousands)

<S>                  <C>           <C>       <C>       <C>   <C>       <C>
Presidential         $3,864        7.96%     20 yrs    07/01/20        $     --
 House
 2nd mortgage         1,375        5.55%     17 yrs    07/01/20              --
  Total              $5,239                                            $     --
</TABLE>

(1)   See "Item 7. Financial Statements - Note C" for specific details about the
      loans and information with respect to the Partnership's  ability to prepay
      these loans.

On May 30, 2003, the Partnership entered into a second mortgage for Presidential
House   Apartments.   The  second  mortgage  is  in  the  principal   amount  of
approximately  $1,400,000  and has a stated  interest  rate of 5.55% per  annum.
Payments of principal and interest of approximately $11,000 are due on the first
day of each month  commencing  July 2003 until July 2020, at which time the note
is scheduled to be fully amortized.  Capitalized loan costs,  which are included
in other assets,  incurred with the second mortgage were approximately  $50,000,
and will be amortized over the life of the mortgage note payable.


<PAGE>


Rental Rates and Occupancy

Average  annual  rental rates and  occupancy  for 2003 and 2002 for the property
were:

                                     Average Annual              Average Annual
                                      Rental Rates                  Occupancy
                                       (per unit)
Property                          2003            2002          2003        2002

Presidential House               $8,672          $8,585          95%         95%

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly  competitive.  The Partnership's  property is subject to competition from
other  properties in the area. The General Partner believes that the property is
adequately insured. The multi-family  residential property's lease terms are for
one year or less.  No  residential  tenant  leases 10% or more of the  available
rental  space.  The property is in good  physical  condition,  subject to normal
depreciation and deterioration as is typical for assets of this type and age.

Real Estate Taxes and Rates

Real estate tax and rate in 2003 for the property were:

                                         2003                 2003
                                        Billing               Rate
                                    (in thousands)

       Presidential House                $192                 2.13%

Capital Improvements

Presidential House

During the year ended December 31, 2003, the Partnership completed approximately
$114,000 of capital  improvements at Presidential House consisting  primarily of
plumbing   enhancements,   roof  replacement,   electrical   improvements,   air
conditioning  replacements,  elevator  repair,  and appliance and floor covering
replacements.  These  improvements  were funded from  operating  cash flow.  The
Partnership  is  currently  evaluating  the  capital  improvement  needs  of the
property for the upcoming  year and  currently  expects to budget  approximately
$112,000.  Additional improvements may be considered during 2004 and will depend
on the physical  condition of the property as well as  replacement  reserves and
anticipated cash flow generated by the property.

Item 3.     Legal Proceedings

On August 8, 2003 AIMCO  Properties  L.P., an affiliate of the General  Partner,
was served with a Complaint in the United  States  District  Court,  District of
Columbia alleging that AIMCO Properties L.P.  willfully  violated the Fair Labor
Standards  Act (FLSA) by failing to pay  maintenance  workers  overtime  for all
hours  worked  in  excess  of forty  per  week.  The  Complaint  is  styled as a
Collective  Action  under  the FLSA and seeks to  certify  state  subclasses  in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate  maintenance workers for
time  that they were  required  to be  "on-call".  Additionally,  the  Complaint
alleges AIMCO  Properties  L.P.  failed to comply with the FLSA in  compensating
maintenance  workers  for time that they  worked in  responding  to a call while
"on-call".  The  Complaint  also  attempts  to certify a subclass  for  salaried
service  directors who are challenging  their  classification as exempt from the
overtime  provisions of the FLSA.  AIMCO  Properties L.P. has filed an answer to
the  Complaint  denying the  substantive  allegations.  Discovery  is  currently
underway.

The  General  Partner  does not  anticipate  that any costs to the  Partnership,
whether legal or settlement costs, associated with this case will be material to
the Partnership's overall operations.

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

During the quarter ended December 31, 2003, no matter was submitted to a vote of
unit holders through the solicitation of proxies or otherwise.


<PAGE>


                                     PART II

Item 5.     Market for the  Partnership's  Common Equity and Related  Security
            Partner Matters

The Partnership,  a publicly-held  limited partnership,  offered and sold 37,273
Units during its offering period through October 1984. The Partnership currently
has 1,050 holders of record  owning an aggregate of 37,273 Units.  Affiliates of
the General Partner owned 15,698 Units or 42.12% at December 31, 2003. No public
trading market has developed for the Units,  and it is not anticipated that such
a market will develop in the future.

The  Partnership  distributed  the  following  amounts  during  the years  ended
December 31, 2003 and 2002 (in thousands, except per unit data):

<TABLE>
<CAPTION>

                       Year Ended      Per Limited      Year Ended      Per Limited
                      December 31,     Partnership     December 31,     Partnership
                          2003             Unit            2002             Unit

<S>                     <C>              <C>             <C>               <C>
Operations              $  440           $ 11.81         $   --            $   --
Financing                1,330             35.68             --                --
Total                   $1,770           $ 47.49         $   --            $   --
</TABLE>

(1)   Distribution  from the  proceeds  received  from the  second  mortgage  of
      Presidential House Apartments.

Future cash  distributions  will depend on the levels of net cash generated from
operations,  the  availability  of cash  reserves  and the  timing  of the  debt
maturity,  refinancing,  and/or property sale. The Partnership's  cash available
for  distribution  is reviewed on a monthly  basis.  There can be no  assurance,
however,  that the Partnership  will generate  sufficient  funds from operations
after required capital  expenditures to permit any distributions to its partners
in the year 2004 or subsequent  periods.  See "Item 2. Description of Property -
Capital  Improvements" for information  relating to anticipated  expenditures at
the properties.

As of December 31, 2003, the remaining unpaid preferred return arrearage totaled
approximately $9,876,000 or approximately $265 per Unit.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 15,698 limited  partnership  units
(the "Units") in the Partnership representing 42.12% of the outstanding units at
December  31,  2003.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove  the  General  Partner.  As a result  of its  ownership  of 42.12% of the
outstanding  Units,  AIMCO and its affiliates are in a position to influence all
voting decisions with respect to the  Partnership.  Although the General Partner
owes fiduciary duties to the limited  partners of the  Partnership,  the General
Partner  also  owes  fiduciary  duties  to AIMCO as its sole  stockholder.  As a
result,  the  duties  of  the  General  Partner,  as  general  partner,  to  the
Partnership  and its limited  partners may come into conflict with the duties of
the General Partner to AIMCO, as its sole stockholder.


<PAGE>


Item 6.     Management's Discussion and Analysis or Plan of Operation

This item should be read in conjunction with the financial  statements and other
items contained elsewhere in this report.

Results of Operations

The Partnership  realized net income of approximately $ 258,000 and $366,000 for
the years ended  December 31, 2003 and 2002,  respectively.  The decrease in net
income  was due to a  decrease  in  total  revenues  and an  increase  in  total
expenses.  Total  revenues  decreased  due to a decrease in other  income  which
decreased due to a decrease in lease cancellation and administrative fees at the
Partnership's property.

Total expenses  increased due to increases in property tax and interest expenses
partially offset by a decrease in general and administrative  expense.  Property
tax expense  increased due to an increase in the assessed value of  Presidential
House  Apartments.  Interest  expense  increased due to the addition of a second
mortgage  in June 2003  that has  increased  the  average  outstanding  mortgage
balance.

General and administrative expense decreased due to the reduced cost of services
included in management  reimbursements  to the General Partner allowed under the
Partnership Agreement.  Also included in general and administrative  expenses at
both  December 31, 2003 and 2002 are costs  associated  with the  quarterly  and
annual  communications  with  investors and  regulatory  agencies and the annual
audit required by the Partnership Agreement.

As part of the ongoing  business plan of the  Partnership,  the General  Partner
monitors the rental market environment of the investment  property to assess the
feasibility of increasing rents,  maintaining or increasing occupancy levels and
protecting the Partnership from increases in expense.  As part of this plan, the
General  Partner  attempts  to  protect  the  Partnership  from  the  burden  of
inflation-related  increases in expenses by increasing  rents and  maintaining a
high  overall  occupancy  level.  However,  the  General  Partner may use rental
concessions and rental rate reductions to offset  softening  market  conditions,
accordingly,  there is no  guarantee  that the General  Partner  will be able to
sustain such a plan.

Capital Resources and Liquidity

At  December  31,  2003,  the  Partnership  had  cash and  cash  equivalents  of
approximately  $122,000 compared to approximately $295,000 at December 31, 2002.
For the year  ended  December  31,  2003,  cash and cash  equivalents  decreased
approximately  $173,000.  The  decrease in cash and cash  equivalents  is due to
approximately $553,000 of cash used in financing activities and $129,000 of cash
used in investing activities partially offset by approximately  $509,000 of cash
provided by operating activities. Cash used in financing activities consisted of
payments on the mortgages  encumbering the  Partnership's  investment  property,
distributions  to limited partners and payment of loan costs associated with the
second mortgage  partially offset by proceeds received from the second mortgage.
Cash  used in  investing  activities  consisted  of  property  improvements  and
replacements and net deposits to the restricted escrow account maintained by the
mortgage  lender.  The  Partnership  invests  its  working  capital  reserves in
interest-bearing accounts.

On May 30, 2003, the Partnership entered into a second mortgage for Presidential
House   Apartments.   The  second  mortgage  is  in  the  principal   amount  of
approximately  $1,400,000  and has a stated  interest  rate of 5.55% per  annum.
Payments of principal and interest of approximately $11,000 are due on the first
day of each month  commencing  July 2003 until July 2020, at which time the note
is scheduled to be fully amortized.  Capitalized loan costs,  which are included
in other assets,  incurred with the second mortgage were approximately  $50,000,
and will be amortized over the life of the mortgage note payable.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the property to adequately maintain the physical asset
and other operating needs of the Partnership and to comply with Federal,  state,
and local  legal and  regulatory  requirements.  The  General  Partner  monitors
developments in the area of legal and regulatory  compliance and is studying new
federal laws,  including the  Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act
of 2002  mandates  or suggests  additional  compliance  measures  with regard to
governance,  disclosure,  audit and other areas. In light of these changes,  the
Partnership  expects that it will incur higher  expenses  related to compliance,
including   increased  legal  and  audit  fees.  The  Partnership  is  currently
evaluating the capital  improvement  needs of the property for the upcoming year
and currently expects to budget approximately $112,000.  Additional improvements
may be considered  and will depend on the physical  condition of the property as
well  as  anticipated   cash  flow  generated  by  the  property.   The  capital
expenditures  will be incurred only if cash is available from operations or from
Partnership  reserves. To the extent that such budgeted capital improvements are
completed,  the Partnership's  distributable cash flow, if any, may be adversely
affected at least in the short term.

The  Partnership's  assets are thought to be sufficient for any near-term  needs
(exclusive of capital  improvements) of the  Partnership.  At December 31, 2003,
the  first  and  second  mortgage  indebtedness  encumbering  the  Partnership's
investment  property of approximately  $5,239,000 requires monthly principal and
interest  payments  until July 1, 2020 when the notes are  scheduled to be fully
amortized.

The  Partnership  distributed  the  following  amounts  during  the years  ended
December 31, 2003 and 2002 (in thousands, except per unit data):

<TABLE>
<CAPTION>

                       Year Ended      Per Limited      Year Ended      Per Limited
                      December 31,     Partnership     December 31,     Partnership
                          2003             Unit            2002             Unit

<S>                     <C>              <C>             <C>               <C>
Operations              $  440           $ 11.81         $   --            $   --
Financing                1,330             35.68             --                --
Total                   $1,770           $ 47.49         $   --            $   --
</TABLE>

(1)   Distribution  from the  proceeds  received  from the  second  mortgage  of
      President House Apartments.

The  Partnership's  cash  available  for  distribution  is reviewed on a monthly
basis. Future cash distributions will depend on the levels of net cash generated
from  operations,  availability  of cash  reserves  and the  timing  of the debt
maturity, refinancing, and/or property sale. There can be no assurance, however,
that the  Partnership  will  generate  sufficient  funds from  operations  after
required capital expenditures to permit any distributions to its partners in the
year 2004 or subsequent periods.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 15,698 limited  partnership  units
(the "Units") in the Partnership representing 42.12% of the outstanding units at
December  31,  2003.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove  the  General  Partner.  As a result  of its  ownership  of 42.12% of the
outstanding  Units,  AIMCO and its affiliates are in a position to influence all
voting decisions with respect to the  Partnership.  Although the General Partner
owes fiduciary duties to the limited  partners of the  Partnership,  the General
Partner  also  owes  fiduciary  duties  to AIMCO as its sole  stockholder.  As a
result,  the  duties  of  the  General  Partner,  as  general  partner,  to  the
Partnership  and its limited  partners may come into conflict with the duties of
the General Partner to AIMCO, as its sole stockholder.

Critical Accounting Policies and Estimates

A summary of the Partnership's  significant  accounting  policies is included in
"Note A - Organization and Significant Accounting Policies" which is included in
the financial statements in "Item 7. Financial Statements".  The General Partner
believes  that  the  consistent   application  of  these  policies  enables  the
Partnership  to provide  readers of the  financial  statements  with  useful and
reliable  information  about the  Partnership's  operating results and financial
condition. The preparation of financial statements in conformity with accounting
principles  generally  accepted in the United States requires the Partnership to
make  estimates and  assumptions.  These  estimates and  assumptions  affect the
reported  amounts  of  assets  and  liabilities  at the  date  of the  financial
statements  as well as reported  amounts of  revenues  and  expenses  during the
reporting  period.  Actual results could differ from these estimates.  Judgments
and  assessments  of  uncertainties  are required in applying the  Partnership's
accounting  policies in many areas. The following may involve a higher degree of
judgment and complexity.

Impairment of Long-Lived Assets

The  Partnership's  investment  property is recorded at cost,  less  accumulated
depreciation,  unless considered impaired.  If events or circumstances  indicate
that the carrying amount of the property may be impaired,  the Partnership  will
make an assessment of its  recoverability by estimating the undiscounted  future
cash flows,  excluding interest charges, of the property. If the carrying amount
exceeds the aggregate  future cash flows,  the  Partnership  would  recognize an
impairment  loss to the extent the carrying amount exceeds the fair value of the
property.

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's  investment  property.  These factors include, but are not limited
to,  changes  in the  national,  regional  and  local  economic  climate;  local
conditions,  such as an oversupply of multifamily  properties;  competition from
other available  multifamily property owners and changes in market rental rates.
Any adverse changes in these factors could cause impairment of the Partnership's
asset.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
Rental income  attributable to leases is recognized monthly as it is earned. The
Partnership  evaluates all accounts receivable from residents and establishes an
allowance, after the application of security deposits, for accounts greater than
30 days past due on current tenants and all receivables due from former tenants.
The Partnership will offer rental concessions during particularly slow months or
in response to heavy  competition from other similar  complexes in the area. Any
concessions  given at the inception of the lease are amortized  over the life of
the lease.

Item 7.     Financial Statements

DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II

LIST OF FINANCIAL STATEMENTS


Report of Ernst & Young LLP, Independent Auditors

Balance Sheet - December 31, 2003

Statements of Operations - Years ended December 31, 2003 and 2002

Statements  of  Changes  in  Partners'  Capital  (Deficiency)  -  Years  ended
December 31, 2003 and 2002

Statements of Cash Flows - Years ended December 31, 2003 and 2002

Notes to Financial Statements



<PAGE>


              Report of Ernst & Young LLP, Independent Auditors



The Partners
Drexel Burnham Lambert Real Estate Associates II


We have audited the  accompanying  balance sheet of Drexel Burnham  Lambert Real
Estate  Associates  II as of December 31, 2003,  and the related  statements  of
operations,  changes in partners' capital (deficiency),  and cash flows for each
of the two years ended  December 31, 2003.  These  financial  statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Drexel Burnham  Lambert Real
Estate  Associates II as of December 31, 2003, and the results of its operations
and its cash  flows for the each of the two years in the period  ended  December
31, 2003, in conformity with  accounting  principles  generally  accepted in the
United States.


                                                          /s/Ernst & Young LLP


Greenville, South Carolina
February 27, 2004


<PAGE>




               DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II

                                  BALANCE SHEET
                        (in thousands, except unit data)

                                December 31, 2003



Assets
  Cash and cash equivalents                                               $ 122
  Receivables and deposits                                                    12
  Other assets                                                               219
  Restricted escrows                                                          15
  Investment property (Notes C and F):
       Land                                               $ 1,287
       Buildings and related personal property              7,379
                                                            8,666
       Less accumulated depreciation                       (6,647)         2,019
                                                                         $ 2,387

Liabilities and Partners' Capital (Deficiency)

Liabilities
  Accounts payable                                                        $ 41
  Tenant security deposit liabilities                                         96
  Other liabilities                                                           49
  Due to affiliates                                                           17
  Mortgage notes payable (Note C)                                          5,239

Partners' Capital (Deficiency)
  General partner                                           $ 44
  Limited partners (37,273 units issued
       and outstanding)                                    (3,099)       (3,055)
                                                                        $ 2,387

                See Accompanying Notes to Financial Statements




<PAGE>



               DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II

                            STATEMENTS OF OPERATIONS
                      (in thousands, except per unit data)
<TABLE>
<CAPTION>



                                                                     Years Ended
                                                                    December 31,
                                                                2003          2002

Revenues:
<S>                                                           <C>           <C>
  Rental income                                               $ 1,602       $ 1,593
  Other income                                                     94           125
     Total revenues                                             1,696         1,718

Expenses:
  Operating                                                       609           616
  General and administrative                                      107           115
  Depreciation                                                    160           155
  Interest                                                        366           329
  Property taxes                                                  196           137
     Total expenses                                             1,438         1,352

Net income                                                     $ 258         $ 366

Net income allocated to general partner (1%)                    $ 3           $ 3
Net income allocated to limited partners (99%)                    255           363
                                                               $ 258         $ 366

Net income per limited partnership unit                        $ 6.84        $ 9.74

Distributions per limited partnership unit                    $ 47.49         $ --


                See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>


               DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II

           STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIENCY)
                        (in thousands, except unit data)


<TABLE>
<CAPTION>

                                         Limited
                                       Partnership    General      Limited
                                          Units       Partner     Partners      Total

<S>                                       <C>           <C>        <C>         <C>
Original capital contributions            37,273        $ 1        $18,637     $18,638

Partners' capital (deficiency) at
  December 31, 2001                       37,273        $ 38       $(1,947)    $(1,909)

Net income for the year
  ended December 31, 2002                     --            3          363         366

Partners' capital (deficiency) at
  December 31, 2002                       37,273           41       (1,584)     (1,543)

Distributions to limited partners             --           --       (1,770)     (1,770)

Net income for the year
  ended December 31, 2003                     --            3          255         258

Partners' capital (deficiency) at
  December 31, 2003                       37,273        $ 44       $(3,099)    $(3,055)

                See Accompanying Notes to Financial Statements
</TABLE>

<PAGE>


               DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II

                            STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>


                                                             Years Ended December 31,
                                                                 2003         2002

Cash flows from operating activities:
<S>                                                              <C>          <C>
  Net income                                                     $ 258        $ 366
  Adjustments to reconcile net income to net cash provided
   by operating activities:
     Depreciation                                                   160          155
     Amortization of loan costs                                      10            8
     Change in accounts:
      Receivables and deposits                                        3           (5)
      Other assets                                                   (5)           2
      Accounts payable                                               26          (29)
      Tenant security deposit payable                                16           (3)
      Due to affiliates                                              17           --
      Other liabilities                                              24         (110)
          Net cash provided by operating activities                 509          384

Cash flows from investing activities:
  Property improvements and replacements                           (114)        (166)
  Net deposits to restricted escrow accounts                        (15)          --
          Net cash used in investing activities                    (129)        (166)

Cash flows from financing activities:
  Payments of mortgage notes payable                               (133)        (100)
  Proceeds from mortgage note payable                             1,400           --
  Loan costs paid                                                   (50)          --
  Distributions to partners                                      (1,770)          --
          Net cash used in financing activities                    (553)        (100)

Net (decrease) increase in cash and cash equivalents               (173)         118

Cash and cash equivalents at beginning of year                      295          177
Cash and cash equivalents at end of year                         $ 122        $ 295

Supplemental disclosure of cash flow information:
  Cash paid for interest                                         $ 351        $ 321

                See Accompanying Notes to Financial Statements
</TABLE>

<PAGE>


               DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 2003


Note A - Organization and Significant Accounting Policies

Organization:

Drexel  Burnham  Lambert  Real  Estate  Associates  II  (the   "Partnership"  or
"Registrant") was organized as a limited partnership under the laws of the State
of New York pursuant to a Certificate of Limited  Partnership  dated November 2,
1983. The Partnership Agreement provides that the Partnership is to terminate on
December 31, 2032,  unless terminated prior to such date. The general partner of
the Partnership is DBL Properties  Corporation ("DBL" or the "General Partner"),
an  affiliate  of Apartment  Investment  and  Management  Company  ("AIMCO"),  a
publicly traded real estate investment trust.

As of December 31, 2003, the Partnership  owns and operates  Presidential  House
Apartments at Sky Lake  ("Presidential") a residential apartment complex located
in North Miami Beach, Florida.

Use of Estimates:

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Fair Value of Financial Instruments:

Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures about
Fair Value of Financial  Instruments",  as amended by SFAS No. 119, "Disclosures
about Derivative Financial Instruments and Fair Value of Financial Instruments",
requires  disclosure  of fair value  information  about  financial  instruments,
whether or not recognized in the balance  sheet,  for which it is practicable to
estimate  fair  value.  Fair value is defined in the SFAS as the amount at which
the  instruments  could be exchanged in a current  transaction  between  willing
parties,  other than in a forced or liquidation  sale. The Partnership  believes
that the  carrying  amount of its  financial  instruments  (except for long term
debt)  approximates  their fair value due to the short  term  maturity  of these
instruments.   The  fair  value  of  the  Partnership's  long  term  debt  after
discounting  the  scheduled  loan  payments  to  maturity  at the  Partnership's
incremental borrowing rate, was approximately $5,753,000 at December 31, 2003.

Cash and Cash Equivalents:

Cash and cash  equivalents  include cash on hand and in banks. At certain times,
the amount of cash deposited at a bank may exceed the limit on insured deposits.
Cash  balances  included  approximately  $109,000 at December  31, 2003 that are
maintained by the affiliated management company on behalf of affiliated entities
in cash concentration accounts.

Restricted Escrows:

At the  time of the  second  mortgage  of  Presidential  House  Apartments,  the
Partnership was required to establish a repair escrow of  approximately  $15,000
with the lender in order to complete listed repairs at the property. The balance
in the repair escrow account at December 31, 2003 is approximately $15,000.

Tenant Security Deposits:

The Partnership  requires security deposits from lessees for the duration of the
lease and such deposits are included in receivables  and deposits.  Deposits are
refunded when the tenant vacates,  provided the tenant has not damaged the space
and is current on rental payments.

Investment Property:

The Partnership's  investment  property consists of one apartment complex stated
at cost. Acquisition fees are capitalized as a cost of real estate. Expenditures
in excess of $250 that  maintain  an  existing  asset which has a useful life of
more than one year are  capitalized  as  capital  replacement  expenditures  and
depreciated  over the  estimated  useful  life of the  asset.  Expenditures  for
ordinary  repairs,  maintenance  and  apartment  turnover  costs are expensed as
incurred.

In accordance  with SFAS No. 144,  "Accounting for the Impairment or Disposal of
Long-Lived  Assets",  the Partnership  records  impairment  losses on long-lived
assets used in operations when events and circumstances indicate that the assets
might be impaired and the  undiscounted  cash flows estimated to be generated by
those  assets  are less  than the  carrying  amounts  of those  assets.  Cost of
apartment  property  that has been  impaired have been written down to appraised
value.  No adjustments  for impairment of value were recorded in the years ended
December 31, 2003 or 2002.

Depreciation:

Depreciation is calculated by the straight-line  method over the estimated lives
of the investment property and related personal property. For Federal income tax
purposes, the accelerated cost recovery method is used for real property over 18
years for  additions  after March 15, 1984,  and before May 9, 1985 and 19 years
for additions  after May 8, 1985,  and before January 1, 1987, and for additions
after  1986,  the  modified   accelerated  cost  recovery  method  is  used  for
depreciation  of (1) real property  over 27 1/2 years and (2) personal  property
additions over 5 years.

Loan Costs:

Loan  costs  of  approximately  $218,000,   less  accumulated   amortization  of
approximately  $30,000,  are included in other  assets and are  amortized by the
straight-line  method  over the life of the loan.  Amortization  expense for the
years ended  December  31, 2003 and 2002 was  approximately  $10,000 and $8,000,
respectively,  and is included in interest expense on the accompanying statement
of operations.  Amortization expense is expected to be approximately $11,000 for
each of the years 2004 through 2008.

Leases:

The Partnership generally leases apartment units for twelve-month terms or less.
The  Partnership  recognizes  income as earned on these leases.  The Partnership
evaluates all accounts  receivable  from residents and establishes an allowance,
after the application of security  deposits,  for accounts  greater than 30 days
past due on current  tenants and all  receivables  due from former  tenants.  In
addition,  the General  Partner's policy is to offer rental  concessions  during
particularly  slow months or in response to heavy competition from other similar
complexes in the area. Any  concessions  given at the inception of the lease are
amortized over the life of the lease.

Advertising Costs:

Advertising  costs of  approximately  $22,000  in 2003 and  $23,000 in 2002 were
charged to expense as incurred and are included in operating expenses.

Segment Reporting:

SFAS  No.  131,   "Disclosure  about  Segments  of  an  Enterprise  and  Related
Information"  established standards for the way that public business enterprises
report information about operating  segments in annual financial  statements and
requires that those  enterprises  report  selected  information  about operating
segments in interim financial reports. It also established standards for related
disclosures about products and services,  geographic areas, and major customers.
As defined in SFAS No. 131, the Partnership has only one reportable segment.

Note B - Transactions with Affiliated Parties

The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership  activities.
The Partnership  Agreement  provides for (i) payments to affiliates for services
and (ii) reimbursement of certain expenses incurred by affiliates of the General
Partner on behalf of the Partnership.

Affiliates of the General  Partner are entitled to receive 5% of gross  receipts
from the Partnership's  residential  property for providing property  management
services.  The  Partnership  paid to such affiliates  approximately  $84,000 and
$86,000 for the years ended December 31, 2003 and 2002,  respectively,  which is
included in operating expense.

An  affiliate  of the General  Partner  received  reimbursement  of  accountable
administrative  expenses amounting to approximately  $64,000 and $69,000 for the
years ended  December  31, 2003 and 2002,  respectively,  which are  included in
general and administrative  expenses and investment property.  Included in these
amounts are fees  related to  construction  management  services  provided by an
affiliate  of the  General  Partner of  approximately  $1,000 and $9,000 for the
years  ended  December  31,  2003  and  2002,  respectively.   The  construction
management  service  fees  are  calculated  based  on a  percentage  of  current
additions to the investment property.

The  Partnership  insures its  property up to certain  limits  through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability.  The Partnership  insures its property above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the General
Partner.  During the years ended December 31, 2003 and 2002, the Partnership was
charged  by  AIMCO  and  its  affiliates   approximately  $27,000  and  $32,000,
respectively,  for  insurance  coverage and fees  associated  with policy claims
administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 15,698 limited  partnership  units
(the "Units") in the Partnership representing 42.12% of the outstanding units at
December  31,  2003.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove  the  General  Partner.  As a result  of its  ownership  of 42.12% of the
outstanding  Units,  AIMCO and its affiliates are in a position to influence all
voting decisions with respect to the  Partnership.  Although the General Partner
owes fiduciary duties to the limited  partners of the  Partnership,  the General
Partner  also  owes  fiduciary  duties  to AIMCO as its sole  stockholder.  As a
result,  the  duties  of  the  General  Partner,  as  general  partner,  to  the
Partnership  and its limited  partners may come into conflict with the duties of
the General Partner to AIMCO, as its sole stockholder.

Note C - Mortgage Note Payable

The principal terms of the mortgage notes payable are as follows:

<TABLE>
<CAPTION>

                           Principal         Monthly
                           Balance At        Payment
                          December 31,       Including      Interest       Maturity
Property                      2003           Interest         Rate           Date
                                 (in thousands)
<S>                         <C>                 <C>           <C>          <C>   <C>
Presidential House          $ 3,864             $   35        7.96%        07/01/20
Presidential House
 2nd mortgage                 1,375                 11        5.55%        07/01/20
  Total                     $ 5,239             $   46
</TABLE>

The  mortgage  notes  payable are  nonrecourse  and are secured by pledge of the
Partnership's  property  and by pledge of revenues  from the  respective  rental
property.  The first and second  mortgage notes include a prepayment  penalty if
repaid  prior to  maturity.  Further  the  property  may not be sold  subject to
existing indebtedness.

On May 30, 2003, the Partnership entered into a second mortgage for Presidential
House   Apartments.   The  second  mortgage  is  in  the  principal   amount  of
approximately  $1,400,000  and has a stated  interest  rate of 5.55% per  annum.
Payments of principal and interest of approximately $11,000 are due on the first
day of each month  commencing  July 2003 until July 2020, at which time the note
is scheduled to be fully amortized.  Capitalized loan costs,  which are included
in other assets,  incurred with the second mortgage were approximately  $50,000,
and will be amortized over the life of the mortgage note payable.

Scheduled  principal  payments  of the  mortgage  notes  payable  subsequent  to
December 31, 2003, are as follows (in thousands):

                                   2004          $ 170
                                   2005             182
                                   2006             196
                                   2007             211
                                   2008             226
                                Thereafter        4,254
                                                $ 5,239

Note D - Partners' Capital

Pursuant  to a public  offering,  37,273  units were sold at $500 per unit.  The
calculation  of net income per  limited  partner  unit is based on 37,273  units
outstanding.

For income tax purposes the limited  partners share 99% and the General  Partner
1%  (subordinated  as defined in the  partnership  agreement)  in all profits or
losses from operations until the limited partners have received an 8% cumulative
preferred  return on their invested  capital.  Thereafter,  the limited partners
share 90% and the  General  Partner  shares 10% in the  profits  or losses  from
operations.

Cash  distributions  from  sales or  refinancing,  if any,  shall be made to the
partners to the extent available and, as more fully described in the partnership
agreement,  as follows:  first,  to each partner in an amount  equivalent to the
positive  amount of such partner's  capital  account on the date of distribution
after adjustment;  second,  to the limited partners,  until the limited partners
have received an amount equal to their original invested capital;  third, 99% to
the limited partners equal to any unpaid preferred return arrearage; and fourth,
as to any excess, 85% to the limited partners and 15% to the General Partner.

Distributions  in  liquidation  to the  partners  shall  be  made  pro  rata  in
accordance with the partners' capital accounts.

In accordance with the Agreement of Limited  Partnership,  limited  partners are
entitled  to  receive an 8%  cumulative  preferred  return on their  unrecovered
invested  capital.  No  distributions  have been made or accrued to the  General
Partner, since the limited partners must receive their original invested capital
plus any preferred return arrearage before payment to the General Partner. As of
December 31, 2003, the unpaid preferred return arrearage  totaled  approximately
$9,876,000.

Note E - Income Taxes

The Partnership has received a ruling from the Internal  Revenue Service that it
will  be  classified  as  a  partnership   for  Federal   income  tax  purposes.
Accordingly,  no provision for income taxes is made in the financial  statements
of the Partnership. Taxable income or loss of the Partnership is reported in the
income tax returns of its partners.

A  reconciliation  of the net income  per the  financial  statements  to the net
taxable income to partners is as follows (in thousands, except unit data):

                                                    Years Ended December 31,
                                                        2003         2002

      Net income as reported                           $  258       $ 366
      Depreciation and amortization differences            26          (47)
      Others                                              (30)          30
      Federal net taxable income                       $  254       $ 349

      Federal taxable income per limited
        partnership unit                               $ 6.74       $ 9.28

The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities(in thousands):

                                                         2003

      Net liabilities as reported                      $ (3,055)
        Fixed assets                                       (204)
        Accumulated depreciation                            173
         Syndication costs                                2,051
         Other assets & liabilities                           7

      Net liabilities - tax basis                      $ (1,028)



<PAGE>


Note F - Real Estate and Accumulated Depreciation

<TABLE>
<CAPTION>

                                                 Initial Cost
                                                To Partnership
                                                (in thousands)
                                                         Buildings          Cost
                                                        and Related     Capitalized
                                                         Personal      Subsequent to
Description              Encumbrances        Land        Property       Acquisition
                        (in thousands)                                 (in thousands)

<S>                         <C>            <C>            <C>             <C>
Presidential House          $ 5,239        $ 1,510        $ 6,037         $ 1,119
</TABLE>

<TABLE>
<CAPTION>

                 Gross Amount At Which
                        Carried
                  At December 31, 2003
                    (in thousands)

                       Buildings
                      And Related
                       Personal             Accumulated     Year of     Date   Depreciable
Description    Land    Property    Total    Depreciation  ConstructionAcquired    Life
                                           (in thousands)
Presidential
<S>           <C>       <C>       <C>         <C>          <C>  <C>    <C>     <C>
  House       $ 1,287   $ 7,379   $ 8,666     $ 6,647      1967-1974   10/84   5-31.5 yrs
</TABLE>

Reconciliation of investment property and accumulated depreciation:

                                              December 31,
                                           2003           2002
                                             (in thousands)
Investment Property
Balance at beginning of year             $ 8,552        $ 8,386
  Property improvements                      114            166
Balance at end of year                     8,666          8,552

Accumulated Depreciation
Balance at beginning of year             $ 6,487        $ 6,332
  Additions charged to expense               160            155
Balance at end of year                   $ 6,647        $ 6,487

The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  2003  and  2002,  is  approximately  $8,462,000  and  $8,348,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December  31, 2003 and 2002,  is  approximately  $6,474,000  and  $6,341,000,
respectively.

Note G - Fourth-Quarter Adjustment

The  Partnership's  policy is to record property tax expense on a monthly basis,
using the estimated  amount for the current year's tax bill. For the first three
quarters of 2003,  the  property  tax expense  was based on  estimated  amounts.
During the fourth quarter,  the  Partnership  recorded an adjustment to property
tax expense of approximately  $33,000 due to a difference in the estimated costs
and the  actual  costs  incurred.  The  increase  in the  actual  costs over the
estimate  was due to an  increase  in the  assessed  value of the  Partnership's
investment property. The actual property tax expense for the year ended December
31, 2003 was  approximately  $192,000  compared to the  estimated  property  tax
expense for the nine months ended September 30, 2003 of approximately $119,000.

Note H - Legal Proceedings

On August 8, 2003 AIMCO  Properties  L.P., an affiliate of the General  Partner,
was served with a Complaint in the United  States  District  Court,  District of
Columbia alleging that AIMCO Properties L.P.  willfully  violated the Fair Labor
Standards  Act (FLSA) by failing to pay  maintenance  workers  overtime  for all
hours  worked  in  excess  of forty  per  week.  The  Complaint  is  styled as a
Collective  Action  under  the FLSA and seeks to  certify  state  subclasses  in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate  maintenance workers for
time  that they were  required  to be  "on-call".  Additionally,  the  Complaint
alleges AIMCO  Properties  L.P.  failed to comply with the FLSA in  compensating
maintenance  workers  for time that they  worked in  responding  to a call while
"on-call".  The  Complaint  also  attempts  to certify a subclass  for  salaried
service  directors who are challenging  their  classification as exempt from the
overtime  provisions of the FLSA.  AIMCO  Properties L.P. has filed an answer to
the  Complaint  denying the  substantive  allegations.  Discovery  is  currently
underway.

The  General  Partner  does not  anticipate  that any costs to the  Partnership,
whether legal or settlement costs, associated with this case will be material to
the Partnership's overall operations.

The  Partnership  is unaware of any pending or  outstanding  litigation  matters
involving it or its investment property that are not of a routine nature arising
in the ordinary course of business.

Item 8.     Changes in and  Disagreements  with  Accountants on Accounting and
            Financial Disclosures

None.

Item 8A.    Controls and Procedures

(a) Disclosure Controls and Procedures.  The Partnership's management,  with the
participation of the principal executive officer and principal financial officer
of the General Partner,  who are the equivalent of the  Partnership's  principal
executive officer and principal financial officer,  respectively,  has evaluated
the  effectiveness of the Partnership's  disclosure  controls and procedures (as
such term is defined  in Rules  13a-15(e)  and  15d-15(e)  under the  Securities
Exchange  Act of 1934,  as amended  (the  "Exchange  Act")) as of the end of the
period covered by this report. Based on such evaluation, the principal executive
officer and  principal  financial  officer of the General  Partner,  who are the
equivalent  of the  Partnership's  principal  executive  officer  and  principal
financial  officer,  respectively,  have  concluded  that, as of the end of such
period, the Partnership's disclosure controls and procedures are effective.

(b) Internal Control Over Financial  Reporting.  There have not been any changes
in the Partnership's  internal control over financial reporting (as such term is
defined in Rules  13a-15(f)  and  15d-15(f)  under the Exchange  Act) during the
fourth quarter of 2003 that have materially  affected,  or are reasonably likely
to  materially  affect,  the  Partnership's   internal  control  over  financial
reporting.


<PAGE>





                                    PART III

Item 9.     Directors,  Executive  Officers,  Promoters  and Control  Persons,
            Compliance with Section 16(a) of the Exchange Act

Drexel  Burnham  Lambert  Real  Estate  Associates  II  (the   "Partnership"  or
"Registrant))   does  not  have  any  directors  or  officers.   Management  and
administrative  services are performed by DBL Properties  Corporation  ("DBL" or
the  "General  Partner")  and its  affiliates.  The General  Partner has general
responsibility  and  authority  in all  matters  affecting  the  business of the
Partnership.

The names of the  directors  and officers of DBL as of December 31, 2003,  their
ages and nature of all  positions  presently  held by them are set forth  below.
There are no family relationships between or among any officers and directors:

David R. Robertson               38   Director, President and Chief Executive
                                     Officer
Jeffrey Adler                    42   Director and Executive Vice President
Martha L. Long                   44   Senior Vice President
Harry G. Alcock                  41   Executive Vice President
Miles Cortez                     60   Executive Vice President, General Counsel
                                      and Secretary
Patti K. Fielding                40   Executive Vice President
Paul J. McAuliffe                47   Executive Vice President and Chief
                                      Financial Officer
Thomas M. Herzog                 41   Senior Vice President and Chief Accounting
                                     Officer

David  R.  Robertson  (age 38) has  been a  Director  and  President  and  Chief
Executive  Officer of the General Partner since February 2004. Mr. Robertson has
been an Executive Vice President of AIMCO since February 2002, and was appointed
President and Chief  Executive  Officer of AIMCO  Capital in October  2002.  Mr.
Robertson  is  responsible  for  property   operations,   asset  management  and
transaction   activities   within  AIMCO   Capital's   portfolio  of  affordable
properties,  and for  redevelopment  and  construction  activities  for both the
conventional  and  affordable  property  portfolios.  Since  February  1996, Mr.
Robertson has been Chairman and Chief Executive Officer of Robeks Corporation, a
privately held chain of specialty food stores.

Jeffrey  Adler (age 42) has been a Director and an Executive  Vice  President of
the General Partner since February 2004. Mr. Adler was appointed  Executive Vice
President,   Conventional   Property  Operations  of  AIMCO  in  February  2004.
Previously he served as Senior Vice  President of Risk  Management and Marketing
of AIMCO from 2002 to 2004.  Prior to joining AIMCO from 2000 to 2002, Mr. Adler
was Vice President, Property/Casualty for Channelpoint, a software company. From
1990 to 2000 Mr. Adler held several positions at Progressive Insurance.

Martha L. Long has been a Director  and Senior  Vice  President  of the  General
Partner since February 2004. Ms. Long has been with AIMCO since October 1998 and
has served in various  capacities.  From 1998 to 2001, Ms. Long served as Senior
Vice President and Controller of AIMCO and the General Partner.  During 2002 and
2003,  Ms. Long served as Senior Vice  President of Continuous  Improvement  for
AIMCO.

Harry G. Alcock was appointed Executive Vice President of the General Partner in
February 2004 and has been Executive Vice President and Chief Investment Officer
of AIMCO since October  1999.  Prior to October 1999 Mr. Alcock served as a Vice
President  of AIMCO  from July 1996 to October  1997,  when he was  promoted  to
Senior Vice  President-Acquisitions  where he served  until  October  1999.  Mr.
Alcock has had responsibility for acquisition and financing  activities of AIMCO
since July 1994.

Miles  Cortez was  appointed  Executive  Vice  President,  General  Counsel  and
Secretary of the General  Partner in February  2004 and of AIMCO in August 2001.
Prior to joining  AIMCO,  Mr. Cortez was the senior  partner of Cortez  Macaulay
Bernhardt  &  Schuetze  LLC,  a Denver  law firm,  from  December  1997  through
September 2001.

Patti K. Fielding was appointed  Executive  Vice President - Securities and Debt
of the General  Partner in  February  2004 and of AIMCO in  February  2003.  Ms.
Fielding  previously  served as Senior Vice  President - Securities  and Debt of
AIMCO from  January  2000 to February  2003.  Ms.  Fielding is  responsible  for
securities and debt financing and the treasury  department.  Ms. Fielding joined
AIMCO in February 1997 and served as Vice  President - Tenders,  Securities  and
Debt until January 2000.

Paul J. McAuliffe has been Executive Vice President and Chief Financial  Officer
of the General  Partner since April 2002. Mr.  McAuliffe has served as Executive
Vice  President of AIMCO since February 1999 and was appointed  Chief  Financial
Officer  of AIMCO in October  1999.  From May 1996  until he joined  AIMCO,  Mr.
McAuliffe was Senior Managing Director of Secured Capital Corp.

Thomas M.  Herzog was  appointed  Senior  Vice  President  and Chief  Accounting
Officer of the General  Partner in February  2004 and of AIMCO in January  2004.
Prior to  joining  AIMCO in January  2004,  Mr.  Herzog  was at GE Real  Estate,
serving  as Chief  Accounting  Officer & Global  Controller  from  April 2002 to
January 2004 and as Chief Technical Advisor from March 2000 to April 2002. Prior
to joining GE Real  Estate,  Mr.  Herzog was at  Deloitte & Touche LLP from 1990
until 2000, including a two-year assignment in the real estate national office.

One or more of the above persons are also directors and/or officers of a general
partner (or general partner of a general partner) of limited  partnerships which
either have a class of  securities  registered  pursuant to Section 12(g) of the
Securities Exchange Act of 1934, or are subject to the reporting requirements of
Section  15(d) of such Act.  Further,  one or more of the above persons are also
directors and/or officers of Apartment Investment and Management Company and the
general  partner  of  AIMCO  Properties,  L.P.,  entities  that  have a class of
securities  registered  pursuant to Section 12(g) of the Securities Exchange Act
of 1934, or are subject to the reporting  requirements of Section 15 (d) of such
Act.

The board of  directors of the General  Partner  does not have a separate  audit
committee.  As such, the board of directors of the General Partner  fulfills the
functions of an audit  committee.  The board of directors  has  determined  that
David R.  Robertson  meets  the  requirement  of an "audit  committee  financial
expert".

The  directors  and  officers of the General  Partner  with  authority  over the
Partnership are all employees of subsidiaries of AIMCO. AIMCO has adopted a code
of ethics that applies to such  directors and officers that is posted on AIMCO's
website  (www.AIMCO.com).  AIMCO's  website is not  incorporated by reference to
this filing.

Item 10.    Executive Compensation

Neither the directors nor officers  received any  remuneration  from the General
Partner during the year ended December 31, 2003.

Item 11.    Security Ownership of Certain Beneficial Owners and Management

Except as noted below,  no person or entity was known by the  Partnership  to be
the  beneficial  owner of more than 5% of the Limited  Partnership  Units of the
Partnership as of December 31, 2003.


<PAGE>



                                            Number
       Entity                              of Units            Percentage

       AIMCO IPLP, L.P.                         10                0.02%
         (an affiliate of AIMCO)
       AIMCO Properties L.P.                15,688               42.10%
         (an affiliate of AIMCO)

AIMCO IPLP, L.P. (formerly known as Insignia  Properties,  L.P.) is indirectly
ultimately  owned  by  AIMCO.  Its  business  address  is  55  Beattie  Place,
Greenville, South Carolina 29602.

AIMCO  Properties  LP  is  indirectly  ultimately  controlled  by  AIMCO.  Its
business address is 4582 S. Ulster St. Parkway,  Suite 1100, Denver,  Colorado
80237.

No director or officer of the General Partner owns any Units.

Item 12.    Certain Relationships and Related Transactions

The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership  activities.
The Partnership  Agreement  provides for (i) payments to affiliates for services
and (ii) reimbursement of certain expenses incurred by affiliates of the General
Partner on behalf of the Partnership.

Affiliates of the General  Partner are entitled to receive 5% of gross  receipts
from the Partnership's  residential  property for providing property  management
services.  The  Partnership  paid to such affiliates  approximately  $84,000 and
$86,000 for the years ended December 31, 2003 and 2002,  respectively,  which is
included in operating expense.

An  affiliate  of the General  Partner  received  reimbursement  of  accountable
administrative  expenses amounting to approximately  $64,000 and $69,000 for the
years ended  December  31, 2003 and 2002,  respectively,  which are  included in
general and administrative  expenses and investment property.  Included in these
amounts are fees  related to  construction  management  services  provided by an
affiliate  of the  General  Partner of  approximately  $1,000 and $9,000 for the
years  ended  December  31,  2003  and  2002,  respectively.   The  construction
management  service  fees  are  calculated  based  on a  percentage  of  current
additions to the investment property.

The  Partnership  insures its  property up to certain  limits  through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability.  The Partnership  insures its property above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the General
Partner.  During the years ended December 31, 2003 and 2002, the Partnership was
charged  by  AIMCO  and  its  affiliates   approximately  $27,000  and  $32,000,
respectively,  for  insurance  coverage and fees  associated  with policy claims
administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 15,698 limited  partnership  units
(the "Units") in the Partnership representing 42.12% of the outstanding units at
December  31,  2003.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove  the  General  Partner.  As a result  of its  ownership  of 42.12% of the
outstanding  Units,  AIMCO and its affiliates are in a position to influence all
voting decisions with respect to the  Partnership.  Although the General Partner
owes fiduciary duties to the limited  partners of the  Partnership,  the General
Partner  also  owes  fiduciary  duties  to AIMCO as its sole  stockholder.  As a
result,  the  duties  of  the  General  Partner,  as  general  partner,  to  the
Partnership  and its limited  partners may come into conflict with the duties of
the General Partner to AIMCO, as its sole stockholder.

Item 13.    Exhibits and Reports on Form 8-K

            a)    Exhibits

                  See Exhibit Index attached.

(b) Reports on Form 8-K:

                  None filed during the quarter December 31, 2003.

Item 14.    Principal Accountant Fees and Services

The General Partner has reappointed Ernst & Young LLP as independent auditors to
audit the financial statements of the Partnership for 2004.

Audit Fees. The Partnership  paid to Ernst & Young LLP audit fees of $36,000 and
$34,000 for 2003 and 2002, respectively.

Tax Fees.  The  Partnership  paid to Ernst & Young LLP fees for tax services for
2003 and 2002 of approximately $3,000 and $11,000, respectively.


<PAGE>


                                   SIGNATURES



In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.




                           DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II


                           By:  DBL Properties Corporation
                                 Its General Partner

                            By: /s/David R. Robertson
                                 David R. Robertson
                                 President and Chief Executive Officer


                             By: /s/Thomas M. Herzog
                                Thomas M. Herzog
                                 Senior Vice President
                                 and Chief Accounting Officer

                              Date: March 29, 2004


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
dates indicated.


/s/David R. Robertson         Director, President           Date: March 29, 2004
David R. Robertson            and Chief Executive
                              Officer


/s/Jeffrey Adler              Director and Executive Vice   Date: March 29, 2004
Jeffrey Adler                 President


/s/Thomas M. Herzog           Senior Vice President         Date: March 29, 2004
Thomas M. Herzog              and Chief Accounting Officer


<PAGE>


                                  EXHIBIT INDEX


Exhibit No.

     3.1      Prospectus of the Partnership filed pursuant to rule 424(b), dated
              December 30, 1983 is hereby incorporated herein by reference.

     3.2      Supplement dated October 10, 1984 to Prospectus dated December 30,
              1983 is hereby incorporated herein by reference.

     3.3      Form  of  Agreement  of  Limited  Partnership  of the  Partnership
              reference is made to Exhibit A to the Prospectus.

     3.4      Certificate  of  Limited  Partnership  of the  Partnership,  which
              appears as Exhibit  3.2 to the  Registration  Statement  is hereby
              incorporated herein by the reference.

    10.3      Agreement  relating to purchase by the Partnership of Presidential
              House at Sky Lake in  North  Miami  Beach,  Florida,  for  which a
              Report on Form 8-K was filed with the  Commission  on  November 5,
              1984, is hereby incorporated herein by reference.

    10.10     Multifamily  Note  dated  June 29,  2000,  by and  between  Drexel
              Burnham   Lambert  Estate   Associates  II,  a  New  York  limited
              partnership,  and ARCS Commercial Mortgage Co., L.P., a California
              limited   partnership   is   incorporated   by  reference  to  the
              Registrant's  Quarterly Report on Form 10-QSB for the period ended
              June 30, 2000.

    10.11         a) Multifamily  Note dated May 30, 2003 between Drexel Burnham
                  Lambert Real Estate Associates II Limited Partnership and GMAC
                  Commercial Mortgage Corporation.

            b)    Limited Guaranty dated May 30, 2003 by AIMCO Properties,  L.P.
                  for the benefit of GMAC Commercial Mortgage Corporation.

            c)    Repair  Escrow  Agreement  dated May 30, 2003  between  Drexel
                  Burnham Lambert Real Estate Associates II Limited  Partnership
                  and GMAC Commercial Mortgage Corporation.

            d)    Replacement  Reserve  Agreement  dated  May 30,  2003  between
                  Drexel  Burnham  Lambert  Real  Estate  Associates  II Limited
                  Partnership and GMAC Commercial Mortgage Corporation.

    31.1      Certification of equivalent of Chief Executive Officer pursuant to
              Securities  Exchange  Act Rules  13a-14(a)/15d-14(a),  as  Adopted
              Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

    31.2      Certification of equivalent of Chief Financial Officer pursuant to
              Securities  Exchange  Act Rules  13a-14(a)/15d-14(a),  as  Adopted
              Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

    32.1      Certification  Pursuant  to 18 U.S.C.  Section  1350,  as  Adopted
              Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


<PAGE>



Exhibit 31.1


                                  CERTIFICATION


I, David R. Robertson, certify that:


1.    I have  reviewed  this  annual  report on Form  10-KSB  of Drexel  Burnham
      Lambert Real Estate Associates II;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the registrant as of, and for, the periods presented in this report;

4.    The  registrant's  other  certifying  officer(s) and I are responsible for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for the registrant
      and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            registrant,  including its consolidated subsidiaries,  is made known
            to us by others  within  those  entities,  particularly  during  the
            period in which this report is being prepared;

      (b)   Evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures and presented in this report our  conclusions  about
            the effectiveness of the disclosure  controls and procedures,  as of
            the  end  of the  period  covered  by  this  report  based  on  such
            evaluation; and

      (c)   Disclosed  in this  report any change in the  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

 5. The registrant's other certifying officer(s) and I have disclosed,  based on
    our most recent evaluation of internal control over financial reporting,  to
    the registrant's  auditors and the audit committee of the registrant's board
    of directors (or persons performing the equivalent functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely affect the  registrant's  ability to
            record, process, summarize and report financial information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal control over financial reporting.

Date: March 29, 2004

                                    /s/David R. Robertson
                                    David R. Robertson
                                    President and Chief Executive Officer
                                    of DBL Properties Corporation,  equivalent
                                    of  the  chief  executive  officer  of the
                                   Partnership


<PAGE>



Exhibit 31.2


                                  CERTIFICATION


I, Thomas M. Herzog, certify that:


1.    I have  reviewed  this  annual  report on Form  10-KSB  of Drexel  Burnham
      Lambert Real Estate Associates II;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the registrant as of, and for, the periods presented in this report;

4.    The  registrant's  other  certifying  officer(s) and I are responsible for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for the registrant
      and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            registrant,  including its consolidated subsidiaries,  is made known
            to us by others  within  those  entities,  particularly  during  the
            period in which this report is being prepared;

      (b)   Evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures and presented in this report our  conclusions  about
            the effectiveness of the disclosure  controls and procedures,  as of
            the  end  of the  period  covered  by  this  report  based  on  such
            evaluation; and

      (c)   Disclosed  in this  report any change in the  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

5.     The registrant's other certifying officer(s) and I have disclosed,  based
       on  our  most  recent  evaluation  of  internal  control  over  financial
       reporting,  to the  registrant's  auditors and the audit committee of the
       registrant's  board of directors (or persons  performing  the  equivalent
       functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely affect the  registrant's  ability to
            record, process, summarize and report financial information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal control over financial reporting.

Date:  March 29, 2004

                                  /s/Thomas M. Herzog
                                  Thomas M. Herzog
                                  Senior  Vice  President  and Chief  Accounting
                                  Officer   of   DBL   Properties   Corporation,
                                  equivalent of the chief  financial  officer of
                                  the Partnership


<PAGE>



Exhibit 32.1


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                Section 906 of the Sarbanes-Oxley Act of 2002



In connection  with the Annual Report on Form 10-KSB of Drexel  Burnham  Lambert
Real Estate Associates II (the  "Partnership"),  for the year ended December 31,
2003 as filed with the  Securities  and Exchange  Commission  on the date hereof
(the  "Report"),  David R.  Robertson,  as the equivalent of the chief executive
officer of the Partnership, and Thomas M. Herzog, as the equivalent of the chief
financial  officer of the  Partnership,  each hereby  certifies,  pursuant to 18
U.S.C.  Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that, to the best of his knowledge:

      (1)   The Report fully complies with the  requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Partnership.


                                           /s/David R. Robertson
                                    Name:  David R. Robertson
                                    Date:  March 29, 2004


                                           /s/Thomas M. Herzog
                                    Name:  Thomas M. Herzog
                                    Date:  March 29, 2004



This  certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley  Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.