FORM 10-KSB-ANNUAL OR TRANSITIONAL REPORT UNDER
                                SECTION 13 OR 15(d)

                                   FORM 10-KSB

(Mark One)
[X]  Annual Report Under Section 13 or 15(d) of the  Securities  Exchange Act of
     1934 [No Fee Required]

                    For the fiscal year ended December 31, 2000

[ ]  Transition  Report Under Section 13 or 15(d) of the  Securities  Exchange
     Act of 1934 [No Fee Required]

                   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 $1,665,000

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, 2000. 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>
                                     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"). 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.

Commencing in February 1984 pursuant to the Prospectus,  the Partnership offered
20,000 in 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 Registrant  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.

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 properties.  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  Registrant'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.

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 properties
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".

Item 2.     Description of Property

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

                                  Date of
Property                          Purchase      Type of Ownership    Use

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

Schedule of Properties

Set forth  below for the  Registrant'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       $8,182       $6,132      5-31.5 yrs     SL        $2,060
</TABLE>

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

Schedule of Property Indebtedness

The  following  table  sets  forth  certain  information  relating  to the  loan
encumbering the Registrant's property.
<TABLE>
<CAPTION>

                             Principal
                            Balance At
                           December 31,       Interest       Period       Maturity
Properties                   2000 (1)           Rate       Amortized        Date
                          (in thousands)

<S>                           <C>               <C>          <C>          <C>   <C>
Presidential House            $4,164            7.96%        20 yrs       07/01/20
</TABLE>

(1) See "Item 7.  Financial  Statement  - Note E" for  Partnership's  ability to
repay this loan and other specific details about the loan.

On  June  30,  2000,  the  Partnership   refinanced  the  mortgage   encumbering
Presidential House.  Interest on the new mortgage is 7.96%.  Interest on the old
mortgage was 8.00%.  The  refinancing  replaced  indebtedness  of  approximately
$3,057,000  with a new  mortgage  in  the  amount  of  $4,200,000.  Payments  of
approximately  $35,000  are due on the  first day of each  month  until the loan
fully amortizes on July 1, 2020. The prior note matured in August 2000.

Rental Rates and Occupancy

Average annual rental rate and occupancy for 2000 and 1999 for the property was:

                                     Average Annual              Average Annual
                                      Rental Rates                  Occupancy
                                       (per unit)
Properties                        2000            1999          2000        1999

Presidential House               $7,861          $7,571          97%         94%

The General Partner  attributes the increase in occupancy to improved  marketing
efforts and an aggressive lease renewal program.

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 2000 for the property was:

                                         2000                 2000
                                        Billing               Rate
                                    (in thousands)

       Presidential House                $141                 2.23%

Capital Improvements

Presidential House

The  Partnership  completed  approximately  $212,000 in capital  expenditures at
Presidential House Apartments as of December 31, 2000,  consisting  primarily of
structural  improvements,  exterior painting,  and floor covering  replacements.
These   improvements  were  funded  primarily  from  operating  cash  flow.  The
Partnership  is  currently  evaluating  the  capital  improvement  needs  of the
property for the upcoming year. The minimum amount to be budgeted is expected to
be $275 per unit or $55,825.  Additional improvements may be considered and will
depend on the physical  condition of the property as well as operating cash flow
and anticipated cash flow generated by the property.

Item 3.     Legal Proceedings

The Partnership is unaware of any pending or outstanding  litigation that is not
of a routine nature arising in the ordinary course of business.

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

During the quarter ended December 31, 2000, no matter was submitted to a vote of
unit holders through the solicitation of proxies or otherwise.


                                     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
Individual  Investor Units during its offering  period through October 1984. The
Partnership  currently has 1,377 holders of record owning an aggregate of 37,273
Units.  An  affiliate  of the General  Partner  owns 8,432 Units or 22.622%.  No
public  trading  market has developed for the Units,  and it is not  anticipated
that such a market will develop in the future.

The following table sets forth the distributions made by the Partnership for the
years ended  December 31, 1999 and 2000 and subsequent to December 31, 2000 (see
"Item 6. Management's  Discussion and Analysis or Plan of Operation" for further
details):

                                                Distributions
                                                           Per Limited
                                        Aggregate        Partnership Unit
                                      (in thousands)
       01/01/99 - 12/31/99               $2,594 (1)          $ 69.59
       01/01/00 - 12/31/00                4,614 (2)           123.79
      Subsequent to 12/31/00                187 (3)             5.02

(1)   Consists  of   approximately   $235,000  of  cash  from   operations   and
      approximately $2,359,000 of sales proceeds from the sale of Wendover II in
      September 1999.

(2)   Consists of approximately $663,000 of cash from operations,  approximately
      $981,000 of cash from refinancing the note encumbering  Presidential House
      and approximately  $2,970,000 of proceeds from the sale of interest in the
      joint venture.

(3)   Consists of approximately $187,000 from cash from operations.

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  distribution
policy is reviewed on a semi-annual 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 2001 or subsequent periods.

As of December 31, 2000, the remaining unpaid preferred return arrearage totaled
approximately $9,219,000 or approximately $247 per Unit.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  currently own 8,432 limited  partnership
units in the Partnership representing 22.622% of the outstanding units. 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 make one or more
additional offers to acquire  additional  limited  partnership  interests in the
Partnership  for cash or in exchange for units in the operating  partnership  of
AIMCO. Under the Partnership  Agreement,  unitholders  holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the General Partner.  When voting on
matters,  AIMCO would in all  likelihood  vote the Units it acquired in a manner
favorable to the interest of the General  Partner  because of their  affiliation
with the General Partner.

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

The  matters  discussed  in this Form  10-KSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions,   competitive  and  regulatory   matters,   etc.)  detailed  in  the
disclosures  contained  in this  Form  10-KSB  and the  other  filings  with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussion of the  Registrant's  business and results of  operations,  including
forward-looking  statements  pertaining  to such  matters,  does not  take  into
account the effects of any changes to the  Registrant's  business and results of
operation.  Accordingly,  actual  results  could  differ  materially  from those
projected in the forward-looking  statements as a result of a number of factors,
including those identified herein.

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  $2,774,000 and $1,803,000
for the years ended  December 31, 2000 and 1999,  respectively.  The increase in
net income is primarily  attributable  to the gain on sale of  investment in the
joint venture of approximately $2,680,000 in March 2000, discussed below. During
the year ended  December 31, 1999, the  Partnership  did recognize a gain on the
sale of discontinued operations of approximately  $1,804,000 which was partially
offset  by the  extraordinary  loss  on the  early  extinguishment  of  debt  of
approximately  $45,000.  The Partnership  realized income before gain on sale of
investment  in  joint  venture,   discontinued  operations,   gain  on  sale  of
discontinued  operations and  extraordinary  loss of  approximately  $94,000 and
$74,000  for the years  ended  December  31,  2000 and 1999,  respectively.  The
increase  in  income  before  gain on  sale  of  investment  in  joint  venture,
discontinued   operations,   gain  on  sale  of   discontinued   operations  and
extraordinary  loss for the year ended  December 31, 2000, is due to an increase
in total revenues partially offset by a decrease in the equity in the net income
of the joint  venture and an increase in total  expenses.  The increase in total
revenues is due to an increase in rental income and other  income.  The increase
in rental income is primarily due to an increase in occupancy and an increase in
the average  annual  rental rate at  Presidential  House.  The increase in other
income is  primarily  due to the  increase in  interest  income as the result of
higher  average cash  balances in interest  bearing  accounts  and  increases in
cable, miscellaneous,  telephone,  laundry and application fees partially offset
by decreases in income from lease cancellations and deposit forfeitures.

The increase in total  expenses is  primarily  due to an increase in general and
administrative, depreciation, and interest expenses. The increase in general and
administrative  expense is due to increases in management  reimbursements to the
General  Partner  allowed  under  the  Partnership  Agreement  and  professional
expenses.  Also included in general and administrative expenses at both December
31,  2000  and  1999,  are  costs  associated  with  the  quarterly  and  annual
communications  with  investors  and  regulatory  agencies  and the annual audit
required by the Partnership  Agreement.  The increase in depreciation expense is
due to new assets  placed in service  during  2000 and the  increase in interest
expense is due to a greater portion of the debt service payments being allocated
to interest due to the refinancing of the debt encumbering Presidential House in
June 2000.

The Partnership owned a 50% joint venture interest in Table Mesa Shopping Center
("Table Mesa") located in Boulder,  Colorado.  The Partnership sold its interest
in Table  Mesa on March  17,  2000 to an  unrelated  party for net  proceeds  of
approximately $3,000,000, and the Partnership recognized a gain of approximately
$2,680,000 in 2000 as a result of the sale.

On September 9, 1999, the Partnership sold Wendover  Business Park II ("Wendover
II") to an unaffiliated third party for net proceeds of approximately $2,383,000
after the  payoff of the first  mortgage  and  closing  costs.  The  Partnership
realized a gain of  approximately  $1,804,000  on the sale during the year ended
December  31,  1999.  The  Partnership   also  realized  a  loss  on  the  early
extinguishment of the debt encumbering the property of approximately $45,000 due
to the write off of unamortized loan costs and a prepayment penalty. Wendover II
was the only  commercial  property owned by the  Partnership and represented one
segment of the Partnership's  operations.  Due to the sale of this property, the
results of the  commercial  segment  have been  shown as loss from  discontinued
operations.  The revenues of this property were  approximately  $263,000 and the
loss from operations was  approximately  $30,000 for the year ended December 31,
1999.

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, due to changing market conditions,  which
can  result in the use of rental  concessions  and rental  reductions  to offset
softening market conditions, there is no guarantee that the General Partner will
be able to sustain such a plan.

Capital Resources and Liquidity

At  December  31,  2000,  the  Partnership  had  cash and  cash  equivalents  of
approximately  $320,000 as compared to  approximately  $691,000 at December  31,
1999. For the year ended December 31, 2000, cash and cash equivalents  decreased
approximately  $371,000 from the Partnership's year ended December 31, 1999. The
decrease in cash and cash equivalents is due to approximately $3,740,000 of cash
used in financing activities which partially offset approximately  $2,872,000 of
cash  provided  by  investing  activities  and  approximately  $497,000  of cash
provided by operating  activities.  Cash used in financing  activities  consists
primarily  of  distributions  to the  partners,  the  repayment  of the mortgage
encumbering Presidential House and, to a lesser extent, payments on the mortgage
encumbering Presidential House partially offset by proceeds from refinancing the
mortgage  encumbering  Presidential House. Cash provided by investing activities
consists of proceeds from the sale of the Partnership's  investment in the Table
Mesa  joint  venture  and a  distribution  from the  Table  Mesa  joint  venture
partially  offset by property  improvements  and  replacements.  The Partnership
invests its working capital reserves in interest-bearing accounts.

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 assets
and other operating  needs of the Registrant and to comply with Federal,  state,
and local  legal and  regulatory  requirements.  The  Partnership  is  currently
evaluating the capital  improvement needs of the property for the upcoming year.
The  minimum  amount to be  budgeted is expected to be $275 per unit or $55,825.
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 Registrant's distributable cash flow, if
any, may be adversely affected at least in the short term.

On  June  30,  2000,  the  Partnership   refinanced  the  mortgage   encumbering
Presidential House.  Interest on the new mortgage is 7.96%.  Interest on the old
mortgage was 8.00%.  The  refinancing  replaced  indebtedness  of  approximately
$3,057,000,with  a new  mortgage  in  the  amount  of  $4,200,000.  Payments  of
approximately  $35,000  are due on the  first day of each  month  until the loan
fully amortizes on July 1, 2020. The prior note matured in August 2000.

The  Registrant's  current assets are thought to be sufficient for any near-term
needs (exclusive of capital  improvements)  of the Partnership.  At December 31,
2000, the mortgage  indebtedness of  approximately  $4,164,000  requires monthly
principal and interest  payments  until July 1, 2020.  The General  Partner will
attempt to refinance  such  indebtedness  and/or sell the property prior to such
maturity  date.  If the property  cannot be  refinanced or sold for a sufficient
amount, the Partnership will risk losing the property through foreclosure.

Distributions  paid to the limited  partners  during the year ended December 31,
2000 consisted of approximately  $663,000 ($17.79 per limited  partnership unit)
of cash  from  operations  and  approximately  $2,970,000  ($79.68  per  limited
partnership  unit) of sales  proceeds  from the sale of  investment in the joint
venture in March 2000 and approximately $981,000 ($26.32 per limited partnership
unit) of proceeds from  refinancing  the note  encumbering  Presidential  House.
During 1999, the Partnership declared and paid cash distributions to the limited
partners in the amount of approximately  $235,000 ($6.30 per limited partnership
unit) of cash from operations and approximately  $2,359,000  ($63.29 per limited
partnership  unit) of sales  proceeds  from the sale of Wendover II in September
1999.  Subsequent  to December 31,  2000,  the  Partnership  declared and paid a
distribution of approximately  $187,000 ($5.02 per limited  partnership unit) of
cash from operations. 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.  The  Partnership's
distribution  policy  is  reviewed  on a  semi-annual  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 2001 or subsequent periods.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  currently own 8,432 limited  partnership
units in the Partnership representing 22.622% of the outstanding units. 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 make one or more
additional offers to acquire  additional  limited  partnership  interests in the
Partnership  for cash or in exchange for units in the operating  partnership  of
AIMCO. Under the Partnership  Agreement,  unitholders  holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the General Partner.  When voting on
matters,  AIMCO would in all  likelihood  vote the Units it acquired in a manner
favorable to the interest of the General  Partner  because of their  affiliation
with the General Partner.

<PAGE>


Item 7.     Financial Statements

DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II

LIST OF FINANCIAL STATEMENTS


Independent Auditors' Report

Balance Sheet - December 31, 2000

Statements of Operations - Years ended December 31, 2000 and 1999

Statements of Changes in Partners'  Capital (Deficit) - Years ended December 31,
2000 and 1999

Statements of Cash Flows - Years ended December 31, 2000 and 1999

Notes to Financial Statements

<PAGE>


                          Independent Auditors' Report



The Partners
Drexel Burnham Lambert Real Estate Associates II


We have audited the  accompanying  balance sheet of the Drexel  Burnham  Lambert
Real Estate  Associates II (the  "Partnership") as of December 31, 2000, and the
related  statements of operations,  changes in partners'  capital  (deficit) and
cash  flows for each of the  years in the  two-year  period  then  ended.  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 of  America.  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  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 the Partnership as of December
31, 2000,  and the results of its  operations and its cash flows for each of the
years in the two-year period then ended in conformity with accounting principles
generally accepted in the United States of America.


                                                                     /s/KPMG LLP


Greenville, South Carolina
January 26, 2001



<PAGE>



                  DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II

                                  BALANCE SHEET
                          (in thousands, except unit data)

                                December 31, 2000



Assets
  Cash and cash equivalents                                              $  320
  Receivables and deposits                                                   12
  Other assets                                                              185
  Investment property (Notes E and H):
       Land                                               $ 1,287
       Buildings and related personal property              6,895
                                                            8,182
       Less accumulated depreciation                       (6,132)        2,050
                                                                        $ 2,567

Liabilities and Partners' Capital (Deficit)

Liabilities
  Accounts payable                                                       $   50
  Tenant security deposit liabilities                                        74
  Other liabilities                                                         111
  Mortgage note payable (Note E)                                          4,164

Partners' Capital (Deficit)
  General partner                                           $  35
  Limited partners (37,273 units issued
       and outstanding)                                    (1,867)       (1,832)
                                                                        $ 2,567

                   See Accompanying Notes to Financial Statements


<PAGE>



                  DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II

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


                                                                     Years Ended
                                                                    December 31,
                                                                2000          1999
Revenues:
<S>                                                           <C>           <C>
  Rental income                                               $ 1,540       $ 1,434
  Other income                                                    125            84
     Total revenues                                             1,665         1,518

Expenses:
  Operating                                                       634           641
  General and administrative                                      169           145
  Depreciation                                                    322           294
  Interest                                                        304           276
  Property taxes                                                  128           123
  Bad debt                                                         51            56
     Total expenses                                             1,608         1,535

Income  (loss)  before  equity in net income of joint
  venture,  gain on sale of  investment  in  joint  venture,
  discontinued  operations,  gain  on  sale  of  discontinued
  operations and extraordinary loss                                57           (17)

Equity in net income of joint venture                              37            91

Income before gain on sale of investment in joint
  venture, discontinued operations, gain on sale of
  discontinued operations and extraordinary loss                   94            74
Gain on sale of investment in joint venture (Note C)            2,680            --
Income from continuing operations                               2,774            74
Loss from discontinued operations                                  --           (30)
Gain on sale of discontinued operations (Note D)                   --         1,804
Extraordinary loss on early extinguishment of debt of
  discontinued operations (Note D)                                 --           (45)

Net income                                                    $ 2,774       $ 1,803

Net income allocated to general partner                       $    28       $    --
Net income allocated to limited partners                        2,746         1,803
                                                              $ 2,774       $ 1,803
Per limited partnership unit:
  Income from continuing operations                           $ 73.67        $ 1.96
  Loss from discontinued operations                                --         (0.80)
  Gain on sale of discontinued operations                          --         48.40
  Extraordinary loss on early extinguishment of debt of
   discontinued operations                                         --         (1.21)

            Net income                                        $ 73.67       $ 48.37

Distributions per limited partnership unit                    $123.79       $ 69.59

                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>


                  DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II

                STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
                          (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 at
  December 31, 1998                       37,273        $  7        $ 792       $ 799

Distribution to limited partners              --           --       (2,594)     (2,594)

Net income for the year
  ended December 31, 1999                     --           --        1,803       1,803

Partners' capital at
  December 31, 1999                       37,273            7            1           8

Distributions to limited partners             --           --       (4,614)     (4,614)

Net income for the year
  ended December 31, 2000                     --           28        2,746       2,774

Partners' capital (deficit) at
  December 31, 2000                       37,273        $  35      $(1,867)    $(1,832)

                   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,
                                                                 2000         1999
Cash flows from operating activities:
<S>                                                             <C>          <C>
  Net income                                                    $ 2,774      $ 1,803
  Adjustments to reconcile net income to net cash provided
   by operating activities:
     Depreciation                                                   322          413
     Amortization of loan costs and lease commissions                14           39
     Equity in net income of joint venture                          (37)         (91)
     Bad debt expense                                                51           56
     Gain on sale of investment in joint venture                 (2,680)          --
     Gain on sale of discontinued operations                         --       (1,804)
     Extraordinary loss on early extinguishment of debt
      of discontinued operations                                     --           45
     Change in accounts:
      Receivables and deposits                                       62          180
      Other assets                                                   (7)           6
      Accounts payable                                              (27)          63
      Tenant security deposit payable                                10          (35)
      Accrued property taxes                                         --         (142)
      Other liabilities                                              15           27
          Net cash provided by operating activities                 497          560

Cash flows from investing activities:
  Proceeds from sale of investment in joint venture               3,000           --
  Proceeds from sale of discontinued operations                      --        3,542
  Property improvements and replacements                           (245)        (366)
  Distributions received from joint venture                         117          275
          Net cash provided by investing activities               2,872        3,451

Cash flows from financing activities:
  Payments of mortgage notes payable                               (101)        (148)
  Prepayment penalty                                                 --          (32)
  Proceeds from mortgage note payable                             4,200           --
  Repayment of mortgage note payable                             (3,057)      (1,159)
  Loan costs paid                                                  (168)          --
  Distributions to partners                                      (4,614)      (2,594)
          Net cash used in financing activities                  (3,740)      (3,933)

Net (decrease) increase in cash and cash equivalents               (371)          78

Cash and cash equivalents at beginning of year                      691          613
Cash and cash equivalents at end of year                         $  320        $ 691

Supplemental disclosure of cash flow information:
  Cash paid for interest                                         $  283        $ 327

At  December  31,  1999,  approximately  $33,000 of  property  improvements  and
replacements were in accounts payable.

                   See Accompanying Notes to Financial Statements
</TABLE>


<PAGE>

                  DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 2000


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").

As of December 31, 2000, the Partnership owns and operates Presidential House at
Sky Lake ("Presidential") a residential apartment complex located in North Miami
Beach,  Florida. The Partnership sold its interest in Table Mesa Shopping Center
on March 17, 2000 (see "Note C" for further discussion).

Use of Estimates:

The preparation of financial  statements in conformity  with generally  accepted
accounting principles 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 a current  market rate,
approximates its carrying balance.

Cash and Cash Equivalents:

Cash and cash  equivalents  include  cash on hand and in banks and money  market
accounts.  At certain  times,  the amount of cash deposited at a bank may exceed
the limit on insured deposits.  Cash balances included approximately $207,000 at
December 31, 2000 that are  maintained by the affiliated  management  company on
behalf of affiliated entities in cash concentration accounts.

Tenant Security Deposits:

The Partnership  requires security deposits from lessees for the duration of the
lease.  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.  In
accordance  with SFAS No. 121,  "Accounting  for the  Impairment  of  Long-Lived
Assets and for  Long-Lived  Assets to Be Disposed Of", 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.   Costs  of  apartment  properties  that  have  been
permanently  impaired have been written down to appraised  value. No adjustments
for  impairment of value were  recorded in the years ended  December 31, 2000 or
1999.

Depreciation:

Depreciation is calculated by the straight-line  method over the estimated lives
of the investment  properties and related  personal  property ranging from 15 to
31.5 years for  buildings  and  improvements  and from three to seven  years for
furnishings.  For Federal  income tax purposes,  the  accelerated  cost recovery
method is used (1) for real property over 15 years for additions  prior to March
16, 1984,  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
(2) for personal  property over 5 years for additions  prior to January 1, 1987.
As a result of the Tax Reform Act of 1986,  for  additions  after  December  31,
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.

Leases:

The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership recognizes income as earned on these leases.

The Partnership  leased  commercial  space to tenants under various lease terms.
For leases  containing  fixed rental  increases  during  their term,  rents were
recognized on a straight-line  basis over the terms of the leases. For all other
commercial leases, rents were recognized over the terms of the leases as earned.
The Partnership sold its commercial property on September 9, 1999.

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.  Concessions  are  charged  against  rental  income  as
incurred.

Advertising Costs:

Advertising  costs of  approximately  $28,000  in 2000 and  $32,000 in 1999 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 establishes standards for related disclosures
about products and services, geographic areas, and major customers. See "Note J"
for required disclosure.

Note B - Transactions with Affiliated Parties

The Registrant 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 certain  payments to  affiliates  for
services and  reimbursement of certain expenses incurred by affiliates on behalf
of the Partnership.

The following  payments were made to the General  Partner and affiliates  during
the years ended December 31, 2000 and 1999:

                                                             2000        1999
                                                              (in thousands)
Property management fees (included in operating
  expenses)                                                   $77         $73
Reimbursement for services of affiliates (included in
  general and administrative expenses and investment
  property)                                                    65          46

During the years ended  December  31, 2000 and 1999,  affiliates  of the General
Partner  were  entitled to receive 5% of gross  receipts  from the  Registrant's
residential property for providing property management services.  The Registrant
paid to such  affiliates  approximately  $77,000 and $73,000 for the years ended
December 31, 2000 and 1999, respectively.

An  affiliate  of the General  Partner  received  reimbursement  of  accountable
administrative  expenses amounting to approximately  $65,000 and $46,000 for the
years ended December 31, 2000 and 1999, respectively.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  currently own 8,432 limited  partnership
units in the Partnership representing 22.622% of the outstanding units. 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 make one or more
additional offers to acquire  additional  limited  partnership  interests in the
Partnership  for cash or in exchange for units in the operating  partnership  of
AIMCO. Under the Partnership  Agreement,  unitholders  holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the General Partner.  When voting on
matters,  AIMCO would in all  likelihood  vote the Units it acquired in a manner
favorable to the interest of the General  Partner  because of their  affiliation
with the General Partner.

Note C - Investment in Joint Venture and Sale of Investment in Joint Venture

Table Mesa Shopping Center Partnership was formed in 1985, as a joint venture to
own and operate a shopping center in Boulder,  Colorado. The Partnership owned a
50% interest in this joint venture.  The Partnership's  equity in the operations
of Table Mesa,  after an adjustment for allocation of depreciation  based on its
basis in the property,  amounted to income of approximately  $37,000 and $91,000
for the years ended December 31, 2000 and 1999, respectively.

The Table Mesa joint venture agreement  provides,  among other things,  that the
Partnership  was  entitled to receive a cash flow  preference,  as  defined,  of
$252,000  per year,  which is  equivalent  to a 9%  return on the  Partnership's
initial  cash  investment.  This  annual  preference  was  not  cumulative.  The
Partnership  received  a  distribution  from the Table  Mesa  joint  venture  of
approximately  $117,000 and  $275,000 for the years ended  December 31, 2000 and
1999, respectively.

Summarized  results  of  operations  for  Table  Mesa for the  period  up to the
disposition  of the  Partnership's  investment  in 2000 and for the  year  ended
December 31, 1999, are as follows (in thousands):

                                      2000           1999

      Total revenues                  $ 451         $ 2,342
      Total expenses                    346           1,945

         Net income                   $ 105         $   397

On March 17, 2000, the Partnership  sold its investment in joint venture,  Table
Mesa. The Partnership  realized a gain of  approximately  $2,680,000 on the sale
during the first quarter of 2000.

Note D -Discontinued Operations and Sale of Discontinued Operations

On September 9, 1999, the Partnership sold Wendover  Business Park II ("Wendover
II") to an unaffiliated third party for net proceeds of approximately $2,383,000
after the  payoff of the first  mortgage  and  closing  costs.  The  Partnership
realized a gain of  approximately  $1,804,000  on the sale during the year ended
December  31,  1999.  The  Partnership   also  realized  a  loss  on  the  early
extinguishment of the debt encumbering the property of approximately $45,000 due
to the write off of unamortized loan costs and a prepayment penalty. Wendover II
was the only  commercial  property owned by the  Partnership and represented one
segment of the Partnership's  operations.  Due to the sale of this property, the
results of the  commercial  segment  have been  shown as loss from  discontinued
operations.  The revenues of this property were  approximately  $263,000 and the
loss from operations was  approximately  $30,000 for the year ended December 31,
1999.

Note E - Mortgage Note Payable

The principal terms of the mortgage note payable are as follows:
<TABLE>
<CAPTION>

                                Principal Monthly
                               Balance At Payment
                          December 31,       Including      Interest       Maturity
Property                      2000           Interest         Rate           Date
                                 (in thousands)
<S>                         <C>                <C>            <C>          <C>   <C>
Presidential House          $ 4,164            $ 35           7.96%        07/01/20
</TABLE>

On  June  30,  2000,  the  Partnership   refinanced  the  mortgage   encumbering
Presidential House.  Interest on the new mortgage is 7.96%.  Interest on the old
mortgage was 8.00%.  The  refinancing  replaced  indebtedness  of  approximately
$3,057,000  with a new  mortgage  in  the  amount  of  $4,200,000.  Payments  of
approximately  $35,000  are due on the  first day of each  month  until the loan
fully amortizes on July 1, 2020. The prior note matured in August 2000.

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

Scheduled principal payments of the mortgage note payable subsequent to December
31, 2000, are as follows (in thousands):

                                   2001         $    92
                                   2002             100
                                   2003             108
                                   2004             117
                                   2005             127
                                Thereafter        3,620
                                                $ 4,164

Note F - Partners' Capital

Pursuant  to a public  offering,  37,273  units were sold at $500 per unit.  The
calculation  of net income  (loss) 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, 2000, the unpaid preferred return arrearage  totaled  approximately
$9,219,000.

Note G - 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,
                                                        2000         1999

      Net income as reported                          $ 2,774      $ 1,803
      Depreciation and amortization differences            25        1,313
      Amount of tax loss under book loss of
        equity investees                                 (290)         151
      Allowance for bad debt                              (18)          22
      Prepaid rent                                         23           (1)
      Federal taxable net income                      $ 2,514      $ 3,288

      Federal taxable income per limited
        partnership unit                              $ 66.78      $ 88.21

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

                                                         2000
      Net liabilities as reported                       $(1,832)
        Fixed assets                                       (204)
        Accumulated depreciation                            214
         Syndication costs                                2,050
         Other assets & liabilities                          30

      Net assets - tax basis                            $   258

Note H - Real Estate and Accumulated Depreciation

<TABLE>
<CAPTION>

                                                 Initial Cost
                                                To Partnership
                                                (in thousands)

                                                         Buildings          Cost
                                                        and Related     Capitalized
                                                         Personal      Subsequent to
Description               Encumbrance        Land       Properties      Acquisition
                        (in thousands)                                 (in thousands)

<S>                         <C>            <C>            <C>              <C>
Presidential House          $ 4,164        $ 1,510        $ 6,037          $ 635
</TABLE>


<TABLE>
<CAPTION>

                 Gross Amount At Which
                        Carried
                  At December 31, 2000
                     (in thousands)

                       Buildings
                      And Related
                       Personal             Accumulated     Year of     Date   Depreciable
Description    Land    Property    Total    Depreciation  ConstructionAcquired Life-Years
                                           (in thousands)
Presidential
<S>           <C>       <C>       <C>         <C>          <C>  <C>    <C>     <C>
  House       $ 1,287   $ 6,895   $ 8,182     $ 6,132      1967-1974   10/84   5-31.5 yrs
</TABLE>


Reconciliation of Real Estate and Accumulated Depreciation:


                                              December 31,
                                           2000           1999
                                             (in thousands)
Investment Properties
Balance at beginning of year             $ 7,970        $11,869
  Property improvements                      212            399
  Disposition of discontinued
    operation                                 --         (4,298)
Balance at end of year                     8,182        $ 7,970

Accumulated Depreciation
Balance at beginning of year             $ 5,810        $ 7,982
  Additions charged to expense               322            413
  Disposition of discontinued
    operation                                 --         (2,585)
Balance at end of year                   $ 6,132        $ 5,810

The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  2000  and  1999,  is  approximately  $7,978,000  and  $7,766,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December  31, 2000 and 1999,  is  approximately  $5,917,000  and  $5,620,000,
respectively.

Note I - Distributions

Distributions  paid to the limited  partners  during the year ended December 31,
2000 consisted of approximately  $663,000 ($17.79 per limited  partnership unit)
of cash  from  operations  and  approximately  $2,970,000  ($79.68  per  limited
partnership  unit) of sales  proceeds  from the sale of  investment in the joint
venture in March 2000 and approximately $981,000 ($26.32 per limited partnership
unit) of proceeds from  refinancing  the note  encumbering  Presidential  House.
During 1999, the Partnership declared and paid cash distributions to the limited
partners in the amount of approximately  $235,000 ($6.30 per limited partnership
unit) of cash from operations and approximately  $2,359,000  ($63.29 per limited
partnership  unit) of sales  proceeds  from the sale of Wendover II in September
1999.  Subsequent  to December 31,  2000,  the  Partnership  declared and paid a
distribution of approximately  $187,000 ($5.02 per limited  partnership unit) of
cash from operations.

Note J - Segment Reporting

Description  of the types of products  and services  from which each  reportable
segment derives its revenues

The Partnership had two reportable segments: residential property and commercial
property.  The  Partnership's   residential  property  segment  consists  of  an
apartment complex in North Miami Beach, Florida. The Partnership rents apartment
units to  tenants  for  terms  that are  typically  twelve  months  or less.  On
September 9, 1999,  the  commercial  property  was sold to an  unrelated  party.
Therefore,  the commercial segment is reflected as discontinued  operations (see
"Note D" for further discussion regarding the sale).

Measurement of segment profit or loss

The  Partnership  evaluates  performance  based on segment  profit (loss) before
depreciation. The accounting policies of the reportable segments are the same as
those described in the summary of significant accounting policies.

Factors management used to identify the enterprise's reportable segments

The  Partnership's  reportable  segments are  investment  properties  that offer
different products and services.  The reportable segments are managed separately
because  they provide  distinct  service  with  different  types of products and
customers.

Segment information for the years 2000 and 1999 is shown in the tables below (in
thousands). The "Other" column includes Partnership administration related items
and income and expense not allocated to the reportable segment.
<TABLE>
<CAPTION>

2000                              Residential    Commercial       Other       Totals
                                               (discontinued)
<S>                                 <C>             <C>             <C>      <C>
Rental income                       $ 1,540         $   --          $ --     $ 1,540
Other income                             75             --            50         125
Interest expense                        304             --            --         304
Depreciation                            322             --            --         322
General and administrative
  expense                                --             --           169         169
Equity in net income of joint
  venture                                --             --            37          37
Gain on sale of investment in
  joint venture                          --             --         2,680       2,680
Segment profit                          176             --         2,598       2,774
Total assets                          2,486             --            81       2,567
Capital expenditures for
  investment property                   212             --            --         212

1999                              Residential    Commercial       Other       Totals
                                               (discontinued)
Rental income                       $ 1,434         $   --          $ --     $ 1,434
Other income                             56             --            28          84
Interest expense                        276             --            --         276
Depreciation                            294             --            --         294
General and administrative
  expense                                --             --           145         145
Equity in net income of joint
  venture                                --             --            91          91
Loss from discontinued
  operations                             --            (30)           --         (30)
Gain on sale of discontinued
  operations                             --          1,804            --       1,804
Extraordinary loss on early
  extinguishment of debt of
  discontinued operation                 --            (45)           --         (45)
Segment profit (loss)                   100          1,729           (26)      1,803
Total assets                          2,338             --         1,062       3,400
Capital expenditures for
  investment properties                 393              6            --         399
</TABLE>

Note K - Legal Proceedings

The Partnership is unaware of any pending or outstanding  litigation that is not
of a routine nature arising in the ordinary course of business.

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

         None.

<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  officers  or  directors.   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  executive  officers of DBL as of December  31,
2000,  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:

Name                   Age     Position

Patrick J. Foye        43      Executive Vice President and Director

Martha L. Long         41      Senior Vice President and Controller

Patrick J. Foye has been  Executive  Vice  President and Director of the General
Partner since October 1, 1998.  Mr. Foye has served as Executive  Vice President
of AIMCO since May 1998.  Prior to joining AIMCO,  Mr. Foye was a partner in the
law firm of Skadden,  Arps, Slate,  Meagher & Flom LLP from 1989 to 1998 and was
Managing Partner of the firm's  Brussels,  Budapest and Moscow offices from 1992
through  1994.  Mr.  Foye is also  Deputy  Chairman  of the  Long  Island  Power
Authority and serves as a member of the New York State Privatization Council. He
received a B.A.  from Fordham  College and a J.D.  from Fordham  University  Law
School.

Martha L. Long has been  Senior Vice  President  and  Controller  of the General
Partner since October 1998 as a result of the acquisition of Insignia  Financial
Group, Inc. As of February 2001, Ms. Long was also appointed head of the service
business for AIMCO.  From June 1994 until January 1997,  she was the  Controller
for Insignia, and was promoted to Senior Vice President - Finance and Controller
in January 1997,  retaining  that title until  October  1998.  From 1988 to June
1994,  Ms. Long was Senior Vice  President and  Controller for The First Savings
Bank, FSB in Greenville, South Carolina.

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  executive  officers  and  director  of  the  General  Partner  fulfill  the
obligations  of the Audit  Committee  and  oversee the  Partnership's  financial
reporting  process on behalf of the General Partner.  Management has the primary
responsibility for the financial  statements and the reporting process including
the systems of internal controls. In fulfilling its oversight  responsibilities,
the executive  officers and director of the General Partner reviewed the audited
financial  statements with management including a discussion of the quality, not
just the  acceptability,  of the accounting  principles,  the  reasonableness of
significant  judgments,   and  the  clarity  of  disclosures  in  the  financial
statements.

The  executive  officers and director of the General  Partner  reviewed with the
independent  auditors,  who are  responsible  for  expressing  an opinion on the
conformity  of  those  audited  financial  statements  with  generally  accepted
accounting  principles,  their  judgments  as  to  the  quality,  not  just  the
acceptability, of the Partnership's accounting principles and such other matters
as are required to be discussed with the Audit Committee or its equivalent under
generally  accepted  auditing  standards.   In  addition,  the  Partnership  has
discussed  with  the  independent  auditors  the  auditors'   independence  from
management and the Partnership  including the matters in the written disclosures
required by the Independence Standards Board and considered the compatibility of
non-audit services with the auditors' independence.

The executive  officers and director of the General  Partner  discussed with the
Partnership's  independent auditors the overall scope and plans for their audit.
In  reliance on the reviews and  discussions  referred to above,  the  executive
officers and director of the General  Partner has approved the  inclusion of the
audited financial  statements in the Form 10-KSB for the year ended December 31,
2000 for filing with the Securities and Exchange Commission.

The General  Partner has reappointed  KPMG LLP as independent  auditors to audit
the financial  statements of the  Partnership  for the current fiscal year. Fees
for the last fiscal year were annual audit services of approximately $40,000 and
non-audit services (principally tax-related) of approximately $9,000.

Item 10.    Executive Compensation

Neither the  director nor officers  received any  remuneration  from the General
Partner during the year ended December 31, 2000.

Item 11.    Security Ownership of Certain Beneficial Owners and Management

Except as noted below, no person or entity was known by the Registrant to be the
beneficial  owner  of  more  than 5% of the  Limited  Partnership  Units  of the
Registrant as of December 31, 2000.

                                            Number
       Entity                              of Units            Percentage

       Insignia Properties LP                   10               0.027%
         (an affiliate of AIMCO)
       AIMCO Properties LP                   8,422              22.595%
         (an affiliate of AIMCO)

Insignia  Properties LP 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 2000 South Colorado Boulevard, Denver, Colorado 80222.

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

Item 12.    Certain Relationships and Related Transactions

The Registrant 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 certain  payments to  affiliates  for
services and as  reimbursement  of certain  expenses  incurred by  affiliates on
behalf of the Partnership.

The following  payments were made to the General  Partner and affiliates  during
the years ended December 31, 2000 and 1999:

                                                             2000        1999
                                                              (in thousands)

Property management fees                                      $77         $73
Reimbursement for services of affiliates                       65          46

During the years ended  December  31, 2000 and 1999,  affiliates  of the General
Partner  were  entitled to receive 5% of gross  receipts  from the  Registrant's
residential property for providing property management services.  The Registrant
paid to such  affiliates  approximately  $77,000 and $73,000 for the years ended
December 31, 2000 and 1999, respectively.

An  affiliate  of the General  Partner  received  reimbursement  of  accountable
administrative  expenses amounting to approximately  $65,000 and $46,000 for the
years ended December 31, 2000 and 1999, respectively.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  currently own 8,432 limited  partnership
units in the Partnership representing 22.622% of the outstanding units. 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 make one or more
additional offers to acquire  additional  limited  partnership  interests in the
Partnership  for cash or in exchange for units in the operating  partnership  of
AIMCO. Under the Partnership  Agreement,  unitholders  holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the General Partner.  When voting on
matters,  AIMCO would in all  likelihood  vote the Units it acquired in a manner
favorable to the interest of the General  Partner  because of their  affiliation
with the General Partner.

Item 13.    Exhibits and Reports on Form 8-K

      (a)   Exhibits:

            Exhibit  10.11,  Purchase and Sale Contract  between  Registrant and
            Drexel  Burnham  Lambert  Estate  Associates  II, a New York limited
            partnership, dated March 17, 2000.

      (b)   Reports on Form 8-K filed during the fourth quarter of calendar year
            2000:

            None.


<PAGE>


                                   SIGNATURES



In  accordance  with  Section 13 or 15(d) 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/Patrick J. Foye
                                      Patrick J. Foye
                                      Executive Vice President


                                By:   /s/Martha L. Long
                                      Martha L. Long
                                      Senior Vice President
                                      and Controller


                                Date:


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
date indicated.


/s/Patrick J. Foye      Executive Vice President      Date:
Patrick J. Foye         and Director


/s/Martha L. Long       Senior Vice President         Date:
Martha L. Long          and Controller



<PAGE>


                                  EXHIBIT INDEX


Exhibit No.

     2.1      Agreement and Plan of Merger,  dated as of October 1, 1999, by and
              between AIMCO and IPT in  Registrant's  Current Report on Form 8-K
              dated October 1, 1998.

     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.

    10.1      Agreement  related to  purchase  by the  Partnership  of  Wendover
              Business  Park  Phase  II in  Greensboro,  North  Carolina,  which
              appears  as  Exhibit  2.1 to  the  Registration  Statement  of the
              Partnership is hereby incorporated herein by reference.

    10.2      Agreement related to purchase by the Partnership of an interest in
              the Sheraton Poste Inn in Cherry Hill,  New Jersey,  which appears
              as Exhibit 2.2 to the Registration Statement of the Partnership is
              hereby incorporated herein by 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.

    10.4      Agreement  relating to purchase by the  Partnership of an interest
              in Table Mesa Shopping  Center in Boulder,  Colorado,  for which a
              Report on Form 8-K was filed with the  Commission on May 21, 1985,
              is hereby incorporated herein by reference.

    10.5      Amendment No. 1, dated October 1, 1992, among the Partnership,
              Coreal N.V., Inc. and Almanzil, Inc., to the Joint Venture
              Agreements, dated April 4, 1984,  between  the  Partnership  and
              Coreal relating to the Sheraton Poste Inn is incorporated by
              reference to the  Registrant's Annual Report on Form 10-KSB for
              the fiscal year ended  December  31, 1992.

    10.6      Contracts  related to refinancing of the debt of Wendover Business
              Park  Phase II were  filed as  Exhibit  10.6 to the report on Form
              10-KSB for the fiscal year ended December 31, 1993, and are hereby
              incorporated herein by reference:

              (a)  Mortgage note dated January 13, 1994 between  Drexel  Burnham
                   Lambert  Real  Estate  Associates  II,  a  New  York  limited
                   partnership,  and United  Family Life  Insurance  Company,  a
                   Georgia corporation.

              (b)  Deed of Trust and Security  Agreement  dated January 13, 1994
                   between Drexel Burnham  Lambert Real Estate  Associates II, a
                   New York  limited  partnership,  and Stewart  Title  Guaranty
                   Company  for the  benefit  of United  Family  Life  Insurance
                   Company, a Georgia corporation.

              (c)  Assignment of Leases, Rents, Contracts,  and Agreements dated
                   January  13,  1994 from Drexel  Burnham  Lambert  Real Estate
                   Associates  II, a New York  limited  partnership,  to  United
                   Family Life Insurance Company, a Georgia corporation.

              (d)  Hazardous  Material  Indemnification  Agreement dated January
                   13,  1994  between   Drexel   Burnham   Lambert  Real  Estate
                   Associates  II, a New York  limited  partnership,  and United
                   Family Life Insurance Company, a Georgia corporation.

              (e)  Escrow Agreement dated January 13, 1994 by and between United
                   Family Life Insurance Company, a Georgia corporation,  Drexel
                   Burnham Lambert Real Estate Associates II, a New York limited
                   partnership, and Dickinson, Logan, Todd and Barber, Inc. (the
                   "Escrow Agent").

    10.7      Purchase and Sale Contract between Registrant and SB Orchard, LLC,
              a Colorado limited liability company, dated May 20, 1999.

    10.8      Amendment to Purchase and Sale Contract between  Registrant and SB
              Orchard,  LLC, a Colorado limited liability company,  dated August
              2, 1999.

    10.9      Second Amendment to Purchase and Sale Contract between  Registrant
              and SB Orchard,  LLC, a Colorado limited liability company,  dated
              August 23, 1999.

    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     Purchase and Sale Contract  between  Registrant and Drexel Burnham
              Lambert  Estate  Associates  II, a New York  limited  partnership,
              dated March 17, 2000.

    16        Letter dated  September  23, 1998,  from the  Registrant's  former
              independent   accountant   regarding  its  concurrence   with  the
              statements  made by the  Registrant in its Current  Report on Form
              8-K dated September 23, 1998.

    16.1      Letter  dated  October  21,  1998,  from the  Registrant's  former
              independent   accountant   regarding  its  concurrence   with  the
              statements  made by the  Registrant in its Current  Report on Form
              8-K dated September 23, 1998.

    99.1      Special  Report/Acquisition  Bulletin  dated May 9, 1985 regarding
              the  Purchase  by the  Partnership  of  interests  in  Table  Mesa
              Shopping Center in Boulder,  Colorado, and the 123 Office Building
              in  Tyson's  Corner,  Virginia  is hereby  incorporated  herein by
              reference.

    99.2      Report on Form 8-K filed  November 4, 1984  regarding the purchase
              of Presidential House at Sky Lake in North Miami Beach, Florida is
              hereby incorporated herein by reference.

    99.3      Report on Form 8-K filed May 21, 1985 regarding the acquisition of
              a 50% interest in Table Mesa Shopping Center in Boulder,  Colorado
              is hereby incorporated herein by reference.

    99.4      On May 17,  1988,  a report  on Form 8-K was filed  regarding  the
              refinancing  of the four loans  underlying the  Presidential  wrap
              mortgage is hereby incorporated herein by reference.

    99.5      On June 12,  1989,  a report on Form 8-K was filed  regarding  the
              modification of Table Mesa Promissory Note is hereby  incorporated
              herein by reference.

    99.7      On October 11, 1989, a report on Form 8-K was filed  regarding the
              change in control of the parent company of the General  Partner is
              hereby incorporated herein by reference.

    99.8      Second Note and Deed of Trust Revision Agreement dated December 3,
              1990 regarding Table Mesa Shopping Center in Boulder, Colorado.

    99.9      Report on Form 8-K filed  February 3, 1993  regarding  the sale of
              the   outstanding   stock  of  the   General   Partner  is  hereby
              incorporated herein by reference.

    99.10     Report on Form 8-K filed July 9, 1997,  regarding  the  change  in
              control of the Partnership.

<PAGE>
                                                                  Exhibit 10.11



                        AGREEMENT OF PURCHASE AND SALE
                      (PARTNERSHIP INTEREST IN TABLE MESA
                         SHOPPING CENTER PARTNERSHIP)


      THIS AGREEMENT OF PURCHASE AND SALE (this "Agreement") is made and entered
into  this  17th  day  of  March,  2000,  by and  between  WILLIAM  W.  REYNOLDS
("Reynolds") (as to an undivided sixty percent (60%) interest) and GERALD P. LEE
("Lee") (as to an undivided  forty  percent  (40%)  interest)  (Reynolds and Lee
being referred to hereinafter  individually by name or jointly as  "Purchasers")
and  DREXEL  BURNHAM  LAMBERT  REAL  ESTATE  ASSOCIATES  II, a New York  Limited
Partnership ("DBL").

                                   RECITALS

     A. Reynolds, Joan E. Shepherd ("Shepherd") and DBL presently constitute all
of the General Partners in an existing General  Partnership  known as Table Mesa
Shopping  Center  Partnership  (the  "Partnership")  created  pursuant  to Joint
Venture  Agreement of Table Mesa Shopping Center  Partnership dated as of May 6,
1985 (the "Partnership Agreement").

     B. DBL is the owner of a fifty percent (50%) interest,  as General Partner,
in the Partnership (the "Partnership Interest").

     C. DBL is willing to sell and  Purchasers  are  willing  to  purchase,  the
Partnership Interest, on the terms and conditions hereinafter set forth.

                                    AGREEMENT

      NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the benefits to be derived therefrom, and other good and valuable consideration,
the receipt and adequacy of which are hereby  confessed  and  acknowledged,  the
parties hereto agree as follows:

     1.  Purchase  and  Sale of  Partnership  Interest.  Subject  to the  terms,
conditions and obligations  set forth in this  Agreement,  DBL agrees to sell to
Purchasers, and Purchasers agree to purchase from DBL, the Partnership Interest,
free and clear of all claims,  security interests,  pledges,  mortgages,  liens,
charges and other encumbrances of any kind whatsoever.

     2. Purchase Price. The purchase price of the Partnership  Interest shall be
Three Million Dollars ($3,000,000.00), payable by Purchasers to DBL as follows:

            A. An earnest money deposit,  in the amount of One Hundred  Thousand
Dollars  ($100,000.00),  shall  be  paid  immediately  upon  execution  of  this
Agreement by Purchasers to Hutchinson Black and Cook, LLC, attorneys for DBL, to
be  held  as an  earnest  money  deposit  pending  closing  of  the  transaction
contemplated  by this  Agreement.  Said amount  shall be  non-refundable  unless
failure to close is due to default by DBL. At closing, the earnest money deposit
shall  be paid  to DBL and  credited  against  the  purchase  price  payable  by
Purchasers.

            B. The entire remaining balance of the purchase price, in the amount
of Two Million Nine Hundred Thousand Dollars  ($2,900,000.00),  shall be payable
to DBL  at  closing,  in  certified  funds,  by  wire  transfer,  to an  account
designated in writing by DBL, or other immediately available funds.

      3. No Prorations.  There shall be no additions,  deductions or adjustments
from the purchase  price for the purpose of adjusting any  individual  assets or
liabilities of the Partnership.  It is understood and agreed between the parties
hereto that the purchase price is intended to reflect the assets and liabilities
of the  Partnership  as of the  date of this  Agreement.  Without  limiting  the
foregoing,  there shall be no further distributions to DBL of any "DBL Cash Flow
Preference" as that term is defined in the Partnership  Agreement,  or any other
distribution  of  cash  or  other  assets  of the  Partnership,  whether  now or
hereafter accrued.

      4.  Method of  Transfer.  At  closing,  DBL shall  execute  and deliver to
Purchasers its Assignment of  Partnership  Interest and Assumption  Agreement in
substantially the form attached hereto as Exhibit "A" and incorporated herein by
reference,  together  with  such  additional  instruments  as may be  reasonably
required in order to evidence or accomplish the transaction contemplated by this
Agreement.

     5. Closing. Closing shall take place at 10:00 a.m., Boulder, Colorado time,
on March 17, 2000, at the offices of The W. W. Reynolds  Companies,  Inc.,  4875
Pearl East Circle, Suite 300, Boulder,  Colorado 80301, or such other reasonable
time,  date or  location  as the parties  may  mutually  agree  upon;  provided,
however,  that Purchasers shall have the right to accelerate the date of closing
by providing  not less than ten (10) days advance  written  notice to DBL of the
revised date of such closing.

      6.    Obligations at Closing.

            A. The following  shall be DBL's  obligations to perform at closing,
and each shall be considered a condition precedent to the closing obligations of
Purchasers, and shall be considered as occurring simultaneously with all closing
obligations of Purchasers:

                  i.     DBL  shall  execute  and  deliver  to  Purchasers  the
assignment of DBL's Partnership Interest.



<PAGE>


                  ii.  DBL shall  execute  and  deliver to  Purchasers  a FIRPTA
affidavit  evidencing that DBL is not a foreign entity requiring the withholding
of federal  income tax on the sales proceeds  pursuant to Internal  Revenue Code
and Income Tax Regulations.

                  iii.  DBL shall  execute  and  deliver  such other  documents,
certificates and other  instruments as may be required by this Agreement,  or as
may be  necessary  or  helpful  to carry out the  obligations  of DBL under this
Agreement.

            B. The  following  shall be  Purchasers'  obligations  to perform at
closing,  and each shall be  considered  a  condition  precedent  to the closing
obligations of DBL, and shall be considered as occurring simultaneously with all
closing obligations of DBL:

                  i.      Purchasers  shall  deliver  to DBL the  cash  purchase
price as required by this Agreement.

                  ii.     Purchasers   shall  execute  and  deliver  to  DBL  an
appropriate assignment and assumption of the Partnership Interest.

                  iii.   Purchasers   shall   execute  and  deliver  such  other
documents,  certificates  and  other  instruments  as may be  required  by  this
Agreement,  or as may be  necessary or helpful to carry out the  obligations  of
Purchasers under this Agreement.

      7.    Indemnification.

            A. DBL shall indemnify and hold Purchasers harmless from and against
losses,  damages, costs or expenses (including reasonable attorneys' fees) which
are caused by, arising out or in connection with:

                  i. Any breach or default  in  the  performance  by  DBL of any
covenant or agreement of DBL contained in this Agreement;

                  ii. Any breach of warranty or otherwise inadequate or
erroneous representation  made by DBL in this  Agreement or in any  certificate
or instrument delivered by DBL pursuant to this Agreement;

                  iii. Any liability not  reflected on the  Partnership's  books
and records as of the date of this  Agreement  which were created by DBL without
the knowledge or consent of the remaining  Partners in the  Partnership,  and of
which Purchasers are not now aware, or should not now reasonably be aware;

                  iv. Any  liability of the  Partnership  created by DBL without
the knowledge or consent of the other  Partners and of the Purchasers between
the date
of this Agreement and the date of closing; and

                  v. Any  liability  arising out of any and all actions,  suits,
claims,   proceedings,   demands,   judgments,  costs  and  expenses  (including
reasonable legal and accounting fees) incident to any of the foregoing.

      If any party shall assert a claim against  Purchasers for which Purchasers
may seek  indemnification  hereunder,  DBL shall be given prompt  written notice
thereof,  and shall have the right to participate in the defense thereof, and to
have such claim defended,  at its own expense, by legal counsel selected by DBL;
and  Purchasers  agree not to  compromise  or settle any such claim  without the
prior written agreement of DBL.

            B. Purchasers shall indemnify and hold DBL harmless from and against
losses,  damages, costs or expenses (including reasonable attorneys' fees) which
are caused by, arising out or in connection with:

                  i. Any breach or default in the  performance  by Purchasers of
any covenant or agreement of Purchasers contained in this Agreement;

                  ii. Any breach of warranty or  otherwise  inadequate  or
erroneous representation  made  by  Purchasers  in this  Agreement  or in any
certificate  or instrument delivered by Purchasers pursuant to this Agreement;

                  iii. Any liability of the  Partnership  created  subsequent to
the closing of the transaction contemplated by this Agreement; and

                  iv. Any liability  arising out of any and all actions,  suits,
claims,   proceedings,   demands,   judgments,  costs  and  expenses  (including
reasonable legal and accounting fees) incident to any of the foregoing.

      If any  party  shall  assert a claim  against  DBL for  which DBL may seek
indemnification  hereunder,  Purchasers  shall be given  prompt  written  notice
thereof,  and shall have the right to participate in the defense thereof, and to
have such claim  defended,  at their own expense,  by legal counsel  selected by
Purchasers;  and DBL agrees not to  compromise  or settle any such claim without
the prior written agreement of Purchasers.

      8.    DBL Representations and Warranties.

            A.    DBL represents  and warrants to Purchasers that as of the date
of this Agreement, and as of the date of closing:

                  i. DBL is a New York  Limited  Partnership,  duly  formed  and
organized, qualified to transact business in all places where necessary in order
to carry on its business as now being conducted.

                  ii. The execution,  delivery and performance of this Agreement
by DBL has been duly and validly  authorized,  and all requisite action has been
taken to make this  Agreement  valid and  binding  upon DBL,  and no third party
consent  (other than  Shepherd) is necessary  to make this  Agreement  valid and
binding upon DBL.

                  iii.  Execution of this  Agreement,  and  consummation  of the
transaction  contemplated  hereby,  will not  violate  any  provisions  of DBL's
Limited Partnership  Agreement,  or any amendments or modifications  thereof, or
constitute  a  default  under  or  breach  of any  terms  or  provisions  of any
indenture,  mortgage,  deed of trust,  contract or other  agreement  (other than
those  evidencing  or  securing  the loan made to the  Partnership  by  American
Enterprise  Life Insurance  Company) to which DBL is a party,  or by which it or
the  Partnership  Interest is bound,  so as to materially  adversely  effect the
consummation of the transaction contemplated by this Agreement or the ability of
DBL to perform its obligations hereunder.

                  iv. There are no actions,  suits,  legal  proceedings or other
proceedings pending (or to the best of knowledge of DBL, threatened) against DBL
or the  Partnership or affecting the Partnership  Interest,  which may adversely
effect the consummation of the transaction  contemplated by this Agreement;  and
consummation of the  transaction  contemplated by this Agreement will not result
in a default or breach of any order of court, arbitrator or governmental body.

                  v. DBL is not in default  under any of its  obligations  under
the Partnership Agreement, nor is DBL aware of any event or failure to act which
would constitute such a default with the passage of time or giving of notice.

                  vi. DBL is the sole owner of the  Partnership  Interest,  free
and clear of all claims, security interests,  pledges, mortgages, liens, charges
and encumbrances of any kind whatsoever by any party.

      DBL shall deliver a certificate, at closing, confirming that the foregoing
representations  and  warranties  remain true and in full force and effect as of
the date of the closing,  and that such  representations  and warranties survive
such closing for one (1) year.

            B.    Purchaser  represents  and warrants to DBL that as of the date
of this Agreement, and as of the date of Closing:

                  i. There are no actions,  suits,  legal  proceedings  or other
proceedings  pending  (or to the best of  knowledge  of  Purchaser,  threatened)
against  Purchaser or the  Partnership  or affecting the  Partnership  Interest,
which may adversely effect the  consummation of the transaction  contemplated by
this  Agreement;  and  consummation  of the  transaction  contemplated  by  this
Agreement  will not  result  in a  default  or  breach  of any  order of  court,
arbitrator or governmental body.

                  ii.  Purchaser is not in default under any of its  obligations
under the Partnership Agreement,  nor is Purchaser aware of any event or failure
to act which would  constitute such a default with the passage of time or giving
of notice.

      Purchaser  shall deliver a certificate,  at closing,  confirming  that the
foregoing  representations  and  warranties  remain  true and in full  force and
effect  as of the  date  of the  closing,  and  that  such  representations  and
warranties survive such closing for one (1) year.

      9.  Interim  Conduct of  Partnership  Business.  Between  the date of this
Agreement and the date of closing, or earlier termination of this Agreement, the
parties  agree that the  business of the  Partnership  shall be conducted in its
ordinary  course and there  will be no  disposition  or sale of any  substantial
amount of the assets of the  Partnership or material  change in the  Partnership
Agreement  or the assets or  liabilities  of the  Partnership  without the prior
written consent of all Partners and of Purchasers.

      10. Conditions to Obligations of Purchasers. The obligations of Purchasers
under this Agreement shall be subject to and  contingent  upon  the  following
conditions (which may be waived by Purchasers, in their sole discretion):

            A.    Purchasers shall not have discovered  any  material   error,
misstatement, or omission in the representations and warranties made by DBL in
this Agreement.

            B.    There shall have been no breach by DBL of the  provisions  of
paragraph 9 of this Agreement.

      11. Consent of Shepherd.  The obligations of the respective parties hereto
shall be contingent  upon and subject to obtaining  written consent by Shepherd,
at or before Closing, to the transfer contemplated by this Agreement and written
waiver by Shepherd of any rights of first refusal or similar rights contained in
the  Partnership  Agreement  with respect to the transfer  contemplated  by this
Agreement.

      12.   Assignment. This Agreement may be assigned by any party  without the
consent of the other party.

      13. Further Assurances.  The parties agree to execute and deliver all such
additional  instruments  as any other party hereto may from time to time request
in order to effectuate the provisions of this Agreement,  and to fully carry out
the transactions contemplated hereby. Without limiting the foregoing, Purchasers
shall  cause the  Partnership  to  record  an  appropriate  Amended  Trade  Name
Affidavit in the Boulder County, Colorado real estate records.

      14.   Remedies on Default.

            A. In the event of default by DBL under this  Agreement,  Purchasers
may, at their option (i) declare this  Agreement  terminated,  in which case the
earnest money deposit shall be returned to Purchasers  and,  except with respect
to obligations  which by the terms of this Agreement survive  termination,  each
party shall thereupon be relieved of all further obligations hereunder,  or (ii)
treat  this  Agreement  as being in full force and  effect,  and bring an action
against DBL for specific  performance.  The foregoing shall  constitute the sole
remedies  of  Purchasers  under  this  Agreement,  and  Purchasers  shall not be
entitled to, and hereby waive, all rights to recover from DBL or the Partnership
any damages, including, without limitation, actual, incidental, consequential or
punitive  damages  (except for breach of any warranty or  representation  or any
obligation of indemnity).  Notwithstanding the foregoing, and in addition to any
other  remedies  set forth  herein,  in the event the default by DBL consists of
failure to remove a monetary  lien or  obligation  encumbering  the  Partnership
Interest, or any part thereof, Purchasers shall have the right to pay the amount
necessary to discharge such lien or encumbrance, and shall be entitled to credit
such amount against the purchase price to be paid at closing.

            B. In the event of default by Purchasers  under this Agreement,  DBL
may, as its sole remedy (i) declare this Agreement terminated, in which case the
earnest money  deposit  shall be forfeited and retained by DBL and,  except with
respect to obligations which by the terms of this Agreement survive termination,
each party shall  thereupon  be relieved of all further  obligations  under this
Agreement.

            C. In the event that either of the parties  hereto shall  default in
any of its covenants or obligations  provided in this  Agreement,  and the party
not in default commences legal or equitable action against the defaulting party,
the defaulting  party  expressly  agrees to pay all reasonable  expenses of such
litigation, including, without limitation, a reasonable sum for attorneys' fees.

      15. Notice. Any notice or other communication given by either party to the
other  relating  to  this  Agreement  shall  be  personally  delivered,  sent by
reputable   overnight  courier,  or  sent  by  certified  mail,  return  receipt
requested,  addressed to such other party at the respective  addresses set forth
below (or at such other address as may be designated from time to time by notice
given in the manner provided  herein);  and if sent by overnight  courier,  such
notice of other communication shall be deemed effective on the next business day
after delivery to such service;  if mailed,  such notice or other  communication
shall be deemed given on the third day  following  deposit in the United  States
mail, postage prepaid:

      If to Purchasers, to:

            William W. Reynolds
            Gerald P. Lee
            The W. W. Reynolds Companies, Inc.
            4875 Pearl East Circle, Suite 300
            Boulder, Colorado  80301

      With a copy to:

            Michael A. Maxwell
            Hasler, Fonfara and Maxwell LLP
            125 South Howes Street, Sixth Floor
            Fort Collins, Colorado  80521

      If to DBL, to:

            Drexel Burnham Lambert Real Estate Associates II
            c/o AIMCO
            ATTN:  Harry Alcock
            2000 South Colorado Boulevard, Tower 2, Suite 2-1000
            Denver, Colorado  80222

      With a copy to:

            Bruce D. Dierking
            Hutchinson Black and Cook, LLC
            1215 Spruce Street
            Boulder, Colorado  80302

      16.   Governing  Law. This Agreement shall be governed  by and its  terms
construed under the laws of the State of Colorado.

      17. Brokerage  Commissions.  Purchasers  represent and warrant to DBL that
Purchasers have not incurred any obligation for payment of any stock  brokerage,
real  estate  commissions  or any other  brokers,  finders  or  similar  fees in
connection with the transaction contemplated by this Agreement. Purchasers agree
to indemnify DBL and hold DBL harmless from any loss, liability, damage, cost or
expense,  including,  without limitation,  court costs and reasonable attorneys'
fees,  paid or incurred by DBL in  connection  with or by reason of any claim of
any brokers,  finders or other fees in connection with this transaction claiming
by, through or under Purchasers.

      DBL  represents  and warrants to Purchasers  that DBL has not incurred any
obligation for payment of any stock  brokerage,  real estate  commissions or any
other  brokers,  finders  or similar  fees in  connection  with the  transaction
contemplated  by this  Agreement.  DBL agrees to indemnify  Purchasers  and hold
Purchasers  harmless  from  any  loss,  liability,   damage,  cost  or  expense,
including,  without limitation, court costs and reasonable attorneys' fees, paid
or incurred by Purchasers  in  connection  with or by reason of any claim of any
brokers,  finders or other fees in connection with this transaction claiming by,
through or under DBL.

      18. Tax Deferred Exchange.  DBL acknowledges that Purchasers may prefer to
acquire an undivided  fifty percent  (50%)  interest in and to the real property
owned  by the  Partnership  in lieu of the  Partnership  Interest,  in  order to
accomplish the purchase of their interests  pursuant to a tax deferred  exchange
transaction  under Section 1031 of the Internal Revenue Code. DBL agrees, at the
request  of  Purchasers,  to  cooperate  with  Purchasers  and third  parties in
achieving such a tax deferred exchange,  provided that DBL shall not be required
to incur any additional liability or expenses as a result thereof. DBL shall not
be  required  to hold  title to any  property  (other  than  the  real  property
currently owned by the Partnership) in connection with such exchange,  nor shall
Purchasers to be entitled to delay the closing of the  transaction  contemplated
by this  Agreement in order to  accommodate  any such  exchange.  In such event,
Purchasers  shall  indemnify and hold DBL harmless from any  additional  closing
expenses which may result from the participation in any such exchange.

      19.   Headings. Paragraph headings   used  in  this   Agreement   are  for
convenience of reference and shall in no way define, limit, or prescribe the
scope or intent of any provision of this Agreement.

      20. Construction. Words of the masculine gender shall include the feminine
and neuter  genders;  and when the  sentence so  indicates,  words of the neuter
gender shall refer to any gender; words in the singular shall include the plural
and vice versa. This Agreement shall be construed  according to its fair meaning
and as if prepared by all parties hereto,  and shall be deemed to be and contain
the entire  understanding and agreement between the parties hereto. There should
be  deemed  to  be  no  other  terms,  conditions,   promises,   understandings,
statements,  or representations,  express or implied,  concerning this Agreement
unless set forth in writing and signed by all parties hereto.

      21.   Time of the Essence. Time shall be of the essence of this  Agreement
and each and every provision hereof.

      22.   Amendment. This Agreement may not be waived,  changed,  modified  or
discharged verbally, but rather only by an agreement in  writing,  signed by the
party against whom enforcement of  any  such  waiver,  change,  modification  or
discharge is sought.

      23. Terms Surviving  Closing.  To the extent necessary to carry out all of
the  terms  and  provisions  hereof,  the said  terms  and  provisions,  and the
obligations and rights set forth herein,  shall not be deemed  terminated at the
time of closing;  nor shall they merge in the  various  documents  executed  and
delivered at such time.

      24.  Business Days. When any payment or action required or contemplated by
this  Agreement  falls on a  Saturday,  Sunday or legal  holiday in the State of
Colorado,  such payment or action shall be due on the first succeeding day which
is not a Saturday, Sunday or legal holiday in the State of Colorado.

      25.   Execution.   This  Agreement  may  be  executed  in  any  number  of
counterparts;  when so executed,  all of such  counterparts  shall  constitute a
single instrument binding upon all parties hereto, notwithstanding the fact that
all parties are not  signatory  to the original or to the same  counterpart.  In
addition,  fax signatures on this Agreement shall be deemed originals,  provided
that any fax  signatories  agree to promptly  execute and deliver hard copies of
this Agreement to the other parties upon request.

      26.  Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns.

      IN WITNESS WHEREOF, the parties hereto have executed this
Agreement  of Purchase  and Sale  (Partnership  Interest in Table Mesa  Shopping
Center Partnership) as of the day and year first above written.



                              -----------------------------------------
                              WILLIAM W. REYNOLDS


                              -----------------------------------------
                              GERALD P. LEE

                                               "Purchasers"


                             DREXEL BURNHAM LAMBERT REAL ESTATE
                             ASSOCIATES II, a New York
                             Limited Partnership

                              By:  DBL Properties Corporation,
                                   a New York Corporation,
                                   General Partner


                                    By:_________________________________
                                       Harry Alcock,
                                       Executive Vice President

                                                "DBL"