SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

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

                    For the fiscal year ended December 31, 2002

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

                   For the transition period from_______to_______

                         Commission file number 2-85829

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

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

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

                    Issuer's telephone number (864) 239-1000

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

                                      None

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

                            Limited Partnership Units
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act of 1934 during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes X No ___

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

State issuer's revenues for its most recent fiscal year $1,718,000

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, 2002. 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


The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  The discussions of the  Registrant's
business  and  results  of  operations,   including  forward-looking  statements
pertaining to such matters,  do not take into account the effects of any changes
to the  Registrant's  business  and results of  operations.  Actual  results may
differ  materially  from those described in the  forward-looking  statements and
will  be  affected  by  a  variety  of  risks  and  factors  including,  without
limitation:  national and local economic  conditions;  the terms of governmental
regulations that affect the Registrant and interpretations of those regulations;
the competitive  environment in which the Registrant operates;  financing risks,
including the risk that cash flows from  operations may be  insufficient to meet
required  payments of  principal  and  interest;  real estate  risks,  including
variations  of real  estate  values and the  general  economic  climate in local
markets and competition for tenants in such markets; and possible  environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.
                                     PART I

Item 1.     Description of Business

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

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

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

The 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.

Risk Factors

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

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

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

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

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

Insurance  coverage is becoming  more  expensive  and  difficult to obtain.  The
current  insurance market is  characterized by rising premium rates,  increasing
deductibles,  and more restrictive  coverage language.  Recent developments have
resulted in  significant  increases in insurance  premiums and have made it more
difficult to obtain  certain types of insurance.  As an example,  many insurance
carriers are excluding  mold-related  risks from their policy coverages,  or are
adding  significant  restrictions to such coverage.  Continued  deterioration in
insurance   market  place   conditions  may  have  a  negative   effect  on  the
Partnership's operating results.

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


<PAGE>



Item 2.     Description of Property

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

<TABLE>
<CAPTION>

                                  Date of
Property                          Purchase      Type of Ownership           Use

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

Schedule of Property

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

<TABLE>
<CAPTION>

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

<S>                      <C>          <C>         <C>                      <C>
Presidential House       $8,552       $6,487      5-31.5 yrs     SL        $ 2,007
</TABLE>

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

Schedule of Property Indebtedness

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

<TABLE>
<CAPTION>

                            Principal
                            Balance At
                           December 31,       Interest       Period       Maturity
Property                     2002 (1)           Rate       Amortized        Date
                          (in thousands)

<S>                           <C>               <C>          <C>          <C>   <C>
Presidential House            $3,972            7.96%        20 yrs       07/01/20
</TABLE>

     (1)  See "Item 7. Financial Statements - Note C" for specific details about
          the loan.


<PAGE>


Rental Rates and Occupancy

Average  annual  rental rate and  occupancy  for 2002 and 2001 for the  property
were:

                                     Average Annual              Average Annual
                                      Rental Rates                  Occupancy
                                   (per unit)
Property                          2002            2001          2002        2001

Presidential House               $8,585          $8,445          95%         97%

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 2002 for the property were:

                                         2002                 2002
                                        Billing               Rate
                                   (in thousands)

       Presidential House                $132                 2.10%

Capital Improvements

Presidential House

During the year ended December 31, 2002, the Partnership completed approximately
$166,000 of capital improvements  consisting primarily of plumbing enhancements,
office  computers,  air  conditioning  replacements,  electrical,  fire  safety,
elevator repair,  swimming pool  improvements,  and appliance and floor covering
replacements.  These  improvements  were funded from  operating  cash flow.  The
Partnership  is  currently  evaluating  the  capital  improvement  needs  of the
property for the upcoming  year and  currently  expects to budget  approximately
$60,000.  Additional  improvements may be considered during 2003 and will depend
on the physical  condition of the property as well as  Partnership  reserves 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, 2002, no matter was submitted to a vote of
unit holders through the solicitation of proxies or otherwise.


<PAGE>


                                     PART II

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

The Partnership,  a publicly-held  limited partnership,  offered and sold 37,273
Units during its offering period through October 1984. The Partnership currently
has 1,138 holders of record  owning an aggregate of 37,273 Units.  Affiliates of
the General Partner owned 13,334 Units or 35.77% at December 31, 2002. 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, 2001 and 2002 (see "Item 6. Management's Discussion and
Analysis or Plan of Operation" for further details):

                                                Distributions
                                                           Per Limited
                                        Aggregate        Partnership Unit
                                      (in thousands)
       01/01/01 - 12/31/01               $ 340 (1)            $ 9.12
       01/01/02 - 12/31/02                   --                   --

(1) Consists of 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  cash available
for  distribution  is reviewed on a monthly  basis.  There can be no  assurance,
however,  that the Partnership  will generate  sufficient  funds from operations
after required capital  expenditures to permit any distributions to its partners
in the year 2003 or subsequent periods.

As of December 31, 2002, the remaining unpaid preferred return arrearage totaled
approximately $10,723,000 or approximately $288 per Unit.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates owned 13,334 limited partnership Units in
the Partnership  representing  35.77% of the  outstanding  units at December 31,
2002. A number of these Units were  acquired  pursuant to tender  offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional units of limited  partnership  interest in the Partnership in
exchange  for  cash  or a  combination  of  cash  and  units  in  the  operating
partnership of AIMCO either through  private  purchases or tender offers.  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 voting on certain amendments to the Partnership  Agreement and voting to
remove the General  Partner.  Although the General Partner owes fiduciary duties
to the  limited  partners of the  Partnership,  the  General  Partner  also owes
fiduciary duties to AIMCO as its sole  stockholder.  As a result,  the duties of
the General  Partner,  as general  partner,  to the  Partnership and its limited
partners may come into conflict with the duties of the General Partner to AIMCO,
as its sole stockholder.


<PAGE>


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

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

Results of Operations

The Partnership  realized net income of approximately  $366,000 and $263,000 for
the years ended  December 31, 2002 and 2001,  respectively.  The increase in net
income is primarily due to a decrease in total expenses.  Total revenues for the
year ended  December 31, 2002 were  comparable to the prior year.  Rental income
decreased  as an  increase  in  average  rental  rate was more than  offset by a
decrease in average occupancy for the investment property and an increase in bad
debt  expense.  The  increase  in other  revenues is due to an increase in lease
cancellation fees, late charges, administration fees, cleaning and damage fees.

The decrease in total  expenses is primarily due to a decrease in  depreciation,
operating,  general and  administrative and interest expense partially offset by
an increase in property tax expense. The decrease in depreciation expense is due
to  assets  becoming  fully  depreciated   during  2001  at  Presidential  House
Apartments. Operating expenses decreased primarily due to decreases in property,
advertising,  maintenance and  administrative  expenses  partially  offset by an
increase in insurance  expense.  Property expense decreased due to a decrease in
employee salaries and benefits.  Advertising expense decreased due to a decrease
in  the  use  of  newspaper  and  periodical  advertising.  Maintenance  expense
decreased due to the reduction in contract  labor used for yards and grounds and
an increase in the  capitalization of certain direct and indirect project costs,
primarily  payroll  related  costs,  at the  property  (see  "Item 7.  Financial
Statements,  Note  A  -  Organization  and  Significant  Accounting  Policies.")
Administrative expense decreased due to a decrease in legal and eviction fees.

Insurance  expense  increased  due to an increase in  insurance  premiums on the
policy covering the investment  property.  General and  administrative  expenses
decreased  primarily  due to reduced  costs of services  included in  management
reimbursements  to the General Partner allowed under the Partnership  Agreement.
Also included in general and  administrative  expenses at both December 31, 2002
and 2001, are costs associated with the quarterly and annual communications with
investors  and  regulatory  agencies  and  the  annual  audit  required  by  the
Partnership  Agreement.  Interest expense decreased due to principal payments on
the mortgage encumbering the Partnership's investment property.

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,  2002,  the  Partnership  had  cash and  cash  equivalents  of
approximately  $295,000 as compared to  approximately  $177,000 at December  31,
2001. For the year ended December 31, 2002, cash and cash equivalents  increased
approximately  $118,000 from the Partnership's year ended December 31, 2001. The
increase in cash and cash equivalents is due to  approximately  $384,000 of cash
provided by operating activities  partially offset by approximately  $100,000 of
cash used in financing  activities  and  approximately  $166,000 of cash used in
investing activities. Cash used in financing activities consisted of payments on
the mortgage encumbering  Presidential House Apartments.  Cash used in investing
activities consisted of 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 asset
and other operating needs of the Partnership and to comply with Federal,  state,
and local  legal and  regulatory  requirements.  The  General  Partner  monitors
developments in the area of legal and regulatory  compliance and is studying new
federal laws,  including the  Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act
of 2002  mandates  or suggests  additional  compliance  measures  with regard to
governance,  disclosure,  audit and other areas. In light of these changes,  the
Partnership  expects that it will incur higher  expenses  related to compliance,
including increased legal and audit fees. Capital  improvements  planned for the
Partnership's  investment  property  are  detailed  below.  The  Partnership  is
currently  evaluating  the capital  improvement  needs of the  property  for the
upcoming year and currently expects to budget approximately $60,000.  Additional
improvements may be considered and will depend on the physical  condition of the
property as well as anticipated cash flow generated by the property. The capital
expenditures  will be incurred only if cash is available from operations or from
Partnership  reserves. To the extent that such budgeted capital improvements are
completed,  the Registrant's  distributable  cash flow, if any, may be adversely
affected at least in the short term.

The  Registrant's  assets are thought to be sufficient  for any near-term  needs
(exclusive of capital  improvements) of the  Partnership.  At December 31, 2002,
the mortgage indebtedness of approximately $3,972,000 requires monthly principal
and interest  payments  until July 1, 2020 at which it will be fully  amortized.
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.

The  Partnership  distributed  the  following  amounts  during  the years  ended
December 31, 2002 and 2001 (in the thousands, except per unit data):

<TABLE>
<CAPTION>

                       Year Ended      Per Limited      Year Ended      Per Limited
                      December 31,     Partnership     December 31,     Partnership
                          2002             Unit            2001             Unit

<S>                     <C>              <C>               <C>             <C>
Operations              $   --           $   --            $340            $ 9.12
</TABLE>

The  Partnership's  cash  available  for  distribution  is reviewed on a monthly
basis. Future cash distributions will depend on the levels of net cash generated
from  operations,  availability  of cash  reserves  and the  timing  of the debt
maturity, refinancing, and/or property sale. There can be no assurance, however,
that the  Partnership  will  generate  sufficient  funds from  operations  after
required capital expenditures to permit any distributions to its partners in the
year 2003 or subsequent periods.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates owned 13,334 limited partnership Units in
the Partnership  representing  35.77% of the  outstanding  units at December 31,
2002. A number of these Units were  acquired  pursuant to tender  offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional units of limited  partnership  interest in the Partnership in
exchange  for  cash  or a  combination  of  cash  and  units  in  the  operating
partnership of AIMCO either through  private  purchases or tender offers.  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 voting on certain amendments to the Partnership  Agreement and voting to
remove the General  Partner.  Although the General Partner owes fiduciary duties
to the  limited  partners of the  Partnership,  the  General  Partner  also owes
fiduciary duties to AIMCO as its sole  stockholder.  As a result,  the duties of
the General  Partner,  as general  partner,  to the  Partnership and its limited
partners may come into conflict with the duties of the General Partner to AIMCO,
as its sole stockholder.

Critical Accounting Policies and Estimates

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

Impairment of Long-Lived Assets

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

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's   investment  property.  These  factors  include  changes  in  the
national,  regional and local economic  climate;  local  conditions,  such as an
oversupply  of  multifamily   properties;   competition   from  other  available
multifamily  property  owners and changes in market  rental  rates.  Any adverse
changes in these factors could cause an impairment in the Partnership's assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
Rental income  attributable to leases is recognized  monthly as it is earned and
the Partnership  fully reserves all balances  outstanding  over thirty days. The
Partnership will offer rental concessions during  particularly slow months or in
response  to  heavy  competition  from  other  similar  complexes  in the  area.
Concessions are charged to income as incurred.


<PAGE>


Item 7.     Financial Statements

DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II

LIST OF FINANCIAL STATEMENTS


Report  of Ernst & Young  LLP,  independent  auditors  as of and for the year
 ended December 31, 2002

Independent auditors' report - KPMG LLP - for the year ended December 31, 2001

Balance Sheet - December 31, 2002

Statements of Operations - Years ended December 31, 2002 and 2001

Statements of Changes in Partners'  Capital (Deficit) - Years ended December 31,
 2002 and 2001

Statements of Cash Flows - Years ended December 31, 2002 and 2001

Notes to Financial Statements



<PAGE>


                 Report of Ernst & Young LLP, Independent Auditors



The Partners
Drexel Burnham Lambert Real Estate Associates II


We have audited the  accompanying  balance sheet of Drexel Burnham  Lambert Real
Estate  Associates  II as of December 31, 2002,  and the related  statements  of
operations,  changes in partners' capital (deficit), and cash flows for the year
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 audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Drexel Burnham  Lambert Real
Estate  Associates II as of December 31, 2002, and the results of its operations
and its  cash  flows  for the year  then ended, in  conformity  with  accounting
principles generally accepted in the United States.


                                                            /s/Ernst & Young LLP


Greenville, South Carolina
February 14, 2003


<PAGE>


                          Independent Auditors' Report



The Partners
Drexel Burnham Lambert Real Estate Associates II


We have audited the accompanying statements of operations,  changes in partners'
capital  (deficit)  and  cash  flows  of  Drexel  Burnham  Lambert  Real  Estate
Associates II (the  "Partnership")  for the year ended December 31, 2001.  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 audit.

We conducted our audit 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  audit  provides  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  results  of  operations  and  cash  flows  of the
Partnership  for the year ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States of America.


                                                                     /s/KPMG LLP


Greenville, South Carolina
February 28, 2002


<PAGE>





                  DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II

                                  BALANCE SHEET
                        (in thousands, except unit data)

                                December 31, 2002

<TABLE>
<CAPTION>


Assets
<S>                                                                       <C>
  Cash and cash equivalents                                               $ 295
  Receivables and deposits                                                    15
  Other assets                                                               174
  Investment property (Notes C and F):
       Land                                               $ 1,287
       Buildings and related personal property              7,265
                                                            8,552
       Less accumulated depreciation                       (6,487)         2,065
                                                                         $ 2,549

Liabilities and Partners' Capital (Deficit)

Liabilities
  Accounts payable                                                        $ 15
  Tenant security deposit liabilities                                         80
  Other liabilities                                                           25
  Mortgage note payable (Note C)                                           3,972

Partners' Capital (Deficit)
  General partner                                           $ 41
  Limited partners (37,273 units issued
       and outstanding)                                    (1,584)        (1,543)
                                                                         $ 2,549


                   See Accompanying Notes to Financial Statements
</TABLE>


<PAGE>



                  DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II

                            STATEMENTS OF OPERATIONS
                      (in thousands, except per unit data)

<TABLE>
<CAPTION>


                                                                     Years Ended
                                                                    December 31,
                                                                2002          2001

Revenues:
<S>                                                           <C>           <C>
  Rental income                                               $ 1,593       $ 1,636
  Other income                                                    125            88
     Total revenues                                             1,718         1,724

Expenses:
  Operating                                                       616           665
  General and administrative                                      115           131
  Depreciation                                                    155           200
  Interest                                                        329           336
  Property taxes                                                  137           129
     Total expenses                                             1,352         1,461

Net income                                                     $ 366         $ 263

Net income allocated to general partner (1%)                    $ 3           $ 3
Net income allocated to limited partners (99%)                    363           260
                                                               $ 366         $ 263

Net income per limited partnership unit                        $ 9.74        $ 6.98

Distributions per limited partnership unit                      $ --         $ 9.12

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

Distribution to limited partners              --           --         (340)       (340)

Net income for the year
  ended December 31, 2001                     --            3          260         263

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

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

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


                   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,
                                                                 2002         2001

Cash flows from operating activities:
<S>                                                              <C>          <C>
  Net income                                                     $ 366        $ 263
  Adjustments to reconcile net income to net cash provided
   by operating activities:
     Depreciation                                                   155          200
     Amortization of loan costs                                       8            8
     Change in accounts:
      Receivables and deposits                                       (5)           2
      Other assets                                                    2           (7)
      Accounts payable                                              (29)         (31)
      Tenant security deposit payable                                (3)           9
      Other liabilities                                            (110)          49
          Net cash provided by operating activities                 384          493

Cash flows from investing activities:
  Property improvements and replacements                           (166)        (204)
          Net cash used in investing activities                    (166)        (204)

Cash flows from financing activities:
  Payments of mortgage note payable                                (100)         (92)
  Distributions to partners                                          --         (340)
          Net cash used in financing activities                    (100)        (432)

Net increase (decrease) in cash and cash equivalents                118         (143)

Cash and cash equivalents at beginning of year                      177          320
Cash and cash equivalents at end of year                         $ 295        $ 177

Supplemental disclosure of cash flow information:
  Cash paid for interest                                         $ 321        $ 355

                   See Accompanying Notes to Financial Statements
</TABLE>

<PAGE>


                  DREXEL BURNHAM LAMBERT REAL ESTATE ASSOCIATES II

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 2002


Note A - Organization and Significant Accounting Policies

Organization:

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

As of December 31, 2002, the Partnership  owns and operates  Presidential  House
Apartments at Sky Lake  ("Presidential") a residential apartment complex located
in North Miami Beach, Florida.

Use of Estimates:

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

Fair Value of Financial Instruments:

Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures about
Fair Value of Financial  Instruments",  as amended by SFAS No. 119, "Disclosures
about Derivative Financial Instruments and Fair Value of Financial Instruments",
requires  disclosure  of fair value  information  about  financial  instruments,
whether or not recognized in the balance  sheet,  for which it is practicable to
estimate  fair  value.  Fair value is defined in the SFAS as the amount at which
the  instruments  could be exchanged in a current  transaction  between  willing
parties,  other than in a forced or liquidation  sale. The Partnership  believes
that the  carrying  amount of its  financial  instruments  (except for long term
debt)  approximates  their fair value due to the short  term  maturity  of these
instruments.  The fair value of the Partnership's long term debt at December 31,
2002,  after  discounting  the  scheduled  loan  payments  to  maturity  at  the
Partnership's incremental borrowing rate, was approximately $4,523,000.

Cash and Cash Equivalents:

Cash and cash  equivalents  include cash on hand and in banks. At certain times,
the amount of cash deposited at a bank may exceed the limit on insured deposits.
Cash  balances  included  approximately  $269,000 at December  31, 2002 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. Expenditures
in excess of $250 that  maintain  an  existing  asset which has a useful life of
more than one year are  capitalized  as  capital  replacement  expenditures  and
depreciated  over the  estimated  useful  life of the  asset.  Expenditures  for
ordinary  repairs,  maintenance  and  apartment  turnover  costs are expensed as
incurred.  In accordance  with SFAS No. 144,  "Accounting  for the Impairment or
Disposal of Long-Lived  Assets",  the Partnership  records  impairment losses on
long-lived assets used in operations when events and circumstances indicate that
the assets might be impaired  and the  undiscounted  cash flows  estimated to be
generated by those assets are less than the  carrying  amounts of those  assets.
Costs of apartment  properties that have been impaired have been written down to
appraised  value.  No  adjustments  for impairment of value were recorded in the
years ended December 31, 2002 or 2001.

During 2001, AIMCO, an affiliate of the General Partner,  commissioned a project
to study process  improvement ideas to reduce operating costs. The result of the
study led to a re-engineering of business processes and eventual redeployment of
personnel and related capital spending. The implementation of these plans during
2002, accounted for as a change in accounting estimate, resulted in a refinement
of the  Partnership's  process  for  capitalizing  certain  direct and  indirect
project costs (principally  payroll related costs) and increased  capitalization
of such costs by approximately $17,000 in 2002 compared to 2001.

Depreciation:

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

Loan Costs:

Loan  costs  of  approximately  $168,000,   less  accumulated   amortization  of
approximately  $20,000,  are included in other  assets and are  amortized by the
straight-line method over the life of the loan. Amortization expense is included
in interest expense for the year ended December 31, 2002.  Amortization  expense
is expected to be approximately $8,000 for each of the years 2003 through 2007.

Leases:

The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership  recognizes  income as earned on these leases and fully reserves
all balances  outstanding over thirty days. 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  $23,000  in 2002 and  $29,000 in 2001 were
charged to expense as incurred and are included in operating expenses.

Segment Reporting:

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

Recent Accounting Pronouncements

In August 2001, the Financial  Accounting  Standards  Board issued SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived  Assets".  SFAS No. 144
provides  accounting  guidance for  financial  accounting  and reporting for the
impairment or disposal of long-lived  assets.  SFAS No. 144 supersedes  SFAS No.
121,  "Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to be Disposed Of". SFAS No. 144 is effective for fiscal years  beginning
after December 15, 2001. The Partnership  adopted SFAS No. 144 effective January
1, 2002. The adoption did not have a material  effect on the financial  position
or results of operations of the Partnership.

In April 2002, the Financial  Accounting  Standards,  Board issued SFAS No. 145,
"Rescission of FASB  Statements  No. 4, 44 and 64". SFAS No. 4 "Reporting  Gains
and Losses from Extinguishment of Debt," required that all gains and losses from
extinguishment  of  debt  be  aggregated  and,  if  material,  classified  as an
extraordinary item. SFAS No. 145 rescinds SFAS No. 4, and accordingly, gains and
losses from extinguishment of debt should only be classified as extraordinary if
they are  unusual in nature and occur  infrequently.  Neither of these  criteria
applies to the  Partnership.  SFAS 145 is effective  for fiscal years  beginning
after May 15, 2002 with early adoption an option.  The Partnership  adopted SFAS
No. 145 effective  April 1, 2002. The adoption did not have a material effect on
the financial position or results of operations of the Partnership.

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 (i) payments to affiliates for services
and (ii) reimbursement of certain expenses incurred by affiliates of the General
Partner on behalf of the Partnership.

During the years ended  December  31, 2002 and 2001,  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  $86,000 and $91,000 for the years ended
December 31, 2002 and 2001, respectively.

An  affiliate  of the General  Partner  received  reimbursement  of  accountable
administrative  expenses amounting to approximately $69,000 and $184,000 for the
years ended  December  31, 2002 and 2001,  respectively,  which are  included in
general and administrative  expenses and investment property.  Included in these
amounts are fees  related to  construction  management  services  provided by an
affiliate of the General  Partner of  approximately  $9,000 and $121,000 for the
years  ended  December  31,  2002  and  2001,  respectively.   The  construction
management  service  fees  are  calculated  based  on a  percentage  of  current
additions to the investment property.

Beginning in 2001,  the  Partnership  began  insuring its property up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability.  The Partnership  insures its property above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated with the General Partner.  During the years ended December 31, 2002
and 2001, the Partnership  paid AIMCO and its affiliates  approximately  $32,000
and $24,000,  respectively,  for  insurance  coverage and fees  associated  with
policy claims administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates owned 13,334 limited partnership Units in
the Partnership  representing  35.77% of the  outstanding  units at December 31,
2002. A number of these Units were  acquired  pursuant to tender  offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional units of limited  partnership  interest in the Partnership in
exchange  for  cash  or a  combination  of  cash  and  units  in  the  operating
partnership of AIMCO either through  private  purchases or tender offers.  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 voting on certain amendments to the Partnership  Agreement and voting to
remove the General  Partner.  Although the General Partner owes fiduciary duties
to the  limited  partners of the  Partnership,  the  General  Partner  also owes
fiduciary duties to AIMCO as its sole  stockholder.  As a result,  the duties of
the General  Partner,  as general  partner,  to the  Partnership and its limited
partners may come into conflict with the duties of the General Partner to AIMCO,
as its sole stockholder.

Note C - Mortgage Note Payable

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

<TABLE>
<CAPTION>

                                Principal Monthly
                               Balance At Payment
                          December 31,       Including      Interest       Maturity
Property                      2002           Interest         Rate           Date
                                 (in thousands)
<S>                         <C>                <C>            <C>          <C>   <C>
Presidential House          $ 3,972            $ 35           7.96%        07/01/20
</TABLE>

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, 2002, are as follows (in thousands):

                                   2003          $ 108
                                   2004             117
                                   2005             127
                                   2006             137
                                   2007             148
                                Thereafter        3,335
                                                $ 3,972

Note D - 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, 2002, the unpaid preferred return arrearage  totaled  approximately
$10,723,000.


<PAGE>



Note E - Income Taxes

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

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

                                                    Years Ended December 31,
                                                        2002         2001

      Net income as reported                           $ 366        $ 263
      Depreciation and amortization differences           (47)         (20)
      Others                                               30          (22)
      Federal taxable net income                       $ 349        $ 221

      Federal taxable income per limited
        partnership unit                               $ 9.28       $ 5.88

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

                                                         2002

      Net liabilities as reported                      $ (1,542)
        Fixed assets                                       (204)
        Accumulated depreciation                            147
         Syndication costs                                2,051
         Other assets & liabilities                          36

      Net assets - tax basis                           $    488



<PAGE>


Note F - Real Estate and Accumulated Depreciation

<TABLE>
<CAPTION>

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

<S>                         <C>            <C>            <C>             <C>
Presidential House          $ 3,972        $ 1,510        $ 6,037         $ 1,005
</TABLE>

                 Gross Amount At Which
                        Carried
                   At December 31, 2002
                     (in thousands)
<TABLE>
<CAPTION>

                       Buildings
                      And Related
                       Personal             Accumulated     Year of      Date   Depreciable
Description    Land    Property    Total    Depreciation  Construction Acquired    Life
                                           (in thousands)
Presidential
<S>           <C>       <C>       <C>         <C>          <C>  <C>    <C>     <C>
  House       $ 1,287   $ 7,265   $ 8,552     $ 6,487      1967-1974   10/84   5-31.5 yrs
</TABLE>

Reconciliation of investment property and accumulated depreciation:

                                              December 31,
                                           2002           2001
                                             (in thousands)
Investment Property
Balance at beginning of year             $ 8,386        $ 8,182
  Property improvements                      166            204
Balance at end of year                     8,552          8,386

Accumulated Depreciation
Balance at beginning of year             $ 6,332        $ 6,132
  Additions charged to expense               155            200
Balance at end of year                   $ 6,487        $ 6,332

The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  2002  and  2001,  is  approximately  $8,348,000  and  $8,182,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December  31, 2002 and 2001,  is  approximately  $6,341,000  and  $6,138,000,
respectively.

<PAGE>

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

Effective  June  27,  2002,  the  Registrant  dismissed  its  prior  Independent
Auditors, KPMG LLP ("KPMG") and retained as its new Independent Auditors,  Ernst
& Young LLP. KPMG's Independent  Auditors' Report on the Registrant's  financial
statements  for the  calendar  year ended  December  31, 2001 did not contain an
adverse opinion or a disclaimer of opinion, and was not qualified or modified as
to  uncertainty,  audit scope or accounting  principles.  The decision to change
Independent  Auditors was approved by DBL's directors.  During the calendar year
ended 2001 and through June 27, 2002,  there were no  disagreements  between the
Registrant  and  KPMG on any  matter  of  accounting  principles  or  practices,
financial   statement   disclosure,   or  auditing  scope  or  procedure   which
disagreements  if not resolved to the satisfaction of KPMG, would have caused it
to make reference to the subject matter of the  disagreements in connection with
its reports.

Effective  June  27,  2002,  the  Registrant  engaged  Ernst & Young  LLP as its
Independent  Auditors.  During the last two calendar  years and through June 27,
2002,  the  Registrant  did not consult  Ernst & Young LLP  regarding any of the
matters or events set forth in Item 304 (a)(2)(i) and (ii) of Regulation S-B.


<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,
2002,  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              45    Executive Vice President and Director
Ronald D. Monson             46    Director
Paul J. McAuliffe            46    Executive Vice President and Chief
                                     Financial Officer
Thomas C. Novosel            44    Senior Vice President and Chief Accounting
                                     Officer


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,  where he is responsible  for  continuous  improvement,
acquisitions of partnership securities, consolidation of minority interests, and
corporate and other acquisitions.  Prior to joining AIMCO, Mr. Foye was a Merger
and Acquisitions Partner in the law firm of Skadden, Arps, Slate, Meagher & Flom
LLP from 1989 to 1998.

Ronald D. Monson has been a Director of the General Partner since April 1, 2002.
Mr. Monson has been Executive Vice President and Head of Property  Operations of
AIMCO since February 2001. Previously, he served as Regional Vice President from
March 1997 to May 1998,  when he was  promoted to Senior Vice  President  of the
Midwest  Division.  Mr.  Monson  served as Senior Vice  President of the Midwest
Division until January 1999, when he was appointed  Senior Vice President of the
Far West  Division.  From April 1994 to February 1997, Mr. Monson was a Regional
Vice President for Great Atlantic Property Management.

Paul J. McAuliffe has been Executive Vice President and Chief Financial  Officer
of the  General  Partner  since  April 1,  2002.  Mr.  McAuliffe  has  served as
Executive  Vice  President  of AIMCO  since  February  1999 and Chief  Financial
Officer of AIMCO since  October 1999.  From May 1996 until he joined AIMCO,  Mr.
McAuliffe was Senior Managing Director of Secured Capital Corp.

Thomas C. Novosel has been Senior Vice President and Chief Accounting Officer of
the General  Partner since April 1, 2002.  Mr. Novosel has served as Senior Vice
President and Chief  Accounting  Officer of AIMCO since April 2000. From October
1993  until he joined  AIMCO,  Mr.  Novosel  was a partner at Ernst & Young LLP,
where he  served  as the  director  of real  estate  advisory  services  for the
southern Ohio Valley area offices but did not work on any assignments related to
AIMCO or the Partnership.

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  directors  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 directors 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 directors 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 have approved the inclusion of the
audited financial  statements in the Form 10-KSB for the year ended December 31,
2002 for filing with the Securities and Exchange Commission.

The General Partner has reappointed Ernst & Young LLP as independent auditors to
audit the financial  statements of the  Partnership for 2003. Fees for 2002 were
audit services of approximately $31,000 and non-audit services  (tax-related) of
approximately $13,000.

Item 10.    Executive Compensation

Neither the directors nor officers  received any  remuneration  from the General
Partner during the year ended December 31, 2002.



<PAGE>


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, 2002.

                                            Number
       Entity                              of Units            Percentage

       Insignia Properties LP                   10                0.02%
         (an affiliate of AIMCO)
       AIMCO Properties LP                  13,324               35.75%
         (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 Stanford  Place 3, 4582 S. Ulster St.  Parkway,  Suite 1100,  Denver,
Colorado 80237.

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

Item 12.    Certain Relationships and Related Transactions

The 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 (i) payments to affiliates for services
and (ii) reimbursement of certain expenses incurred by affiliates of the General
Partner on behalf of the Partnership.

During the years ended  December  31, 2002 and 2001,  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  $86,000 and $91,000 for the years ended
December 31, 2002 and 2001, respectively.

An  affiliate  of the General  Partner  received  reimbursement  of  accountable
administrative  expenses amounting to approximately $69,000 and $184,000 for the
years ended  December  31, 2002 and 2001,  respectively,  which are  included in
general and administrative  expenses and investment property.  Included in these
amounts are fees  related to  construction  management  services  provided by an
affiliate of the General  Partner of  approximately  $9,000 and $121,000 for the
years  ended  December  31,  2002  and  2001,  respectively.   The  construction
management  service  fees  are  calculated  based  on a  percentage  of  current
additions to the investment property.

Beginning in 2001,  the  Partnership  began  insuring its property up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability.  The Partnership  insures its property above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated with the General Partner.  During the years ended December 31, 2002
and 2001, the Partnership  paid AIMCO and its affiliates  approximately  $32,000
and $24,000,  respectively,  for  insurance  coverage and fees  associated  with
policy claims administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates owned 13,334 limited partnership Units in
the Partnership  representing  35.77% of the  outstanding  units at December 31,
2002. A number of these Units were  acquired  pursuant to tender  offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional units of limited  partnership  interest in the Partnership in
exchange  for  cash  or a  combination  of  cash  and  units  in  the  operating
partnership of AIMCO either through  private  purchases or tender offers.  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 voting on certain amendments to the Partnership  Agreement and voting to
remove the General  Partner.  Although the General Partner owes fiduciary duties
to the  limited  partners of the  Partnership,  the  General  Partner  also owes
fiduciary duties to AIMCO as its sole  stockholder.  As a result,  the duties of
the General  Partner,  as general  Partner,  to the  Partnership and its limited
partners may come into conflict with the duties of the General Partner to AIMCO,
as its sole stockholder.

Item 13.    Exhibits and Reports on Form 8-K

            a)    Exhibits

                  See Exhibit Index attached.

            (b)   Reports  on Form  8-K  filed  during  the  fourth  quarter  of
                  calendar year 2002:

                  None.

Item 14.    Controls and Procedures

The principal  executive officer and principal  financial officer of the General
Partner, who are the equivalent of the Partnership's principal executive officer
and  principal  financial  officer,  respectively,  have,  within 90 days of the
filing  date  of  this  annual  report,   evaluated  the  effectiveness  of  the
Partnership's  disclosure  controls and  procedures  (as defined in Exchange Act
Rules 13a-14(c) and 15d-14(c)) and have determined that such disclosure controls
and  procedures  are  adequate.  There have been no  significant  changes in the
Partnership's  internal  controls or in other  factors that could  significantly
affect the  Partnership's  internal  controls since the date of evaluation.  The
Partnership does not believe any significant deficiencies or material weaknesses
exist in the Partnership's internal controls. Accordingly, no corrective actions
have been taken.



<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/Thomas C. Novosel
                                          Thomas C. Novosel
                                          Senior Vice President and
                                          Chief Accounting Officer

                                    Date: March 28, 2003


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

/s/Patrick J. Foye      Executive Vice President   Date: March 28, 2003
Patrick J. Foye         and Director

/s/Thomas C. Novosel    Senior Vice President      Date: March 28, 2003
Thomas C. Novosel       and Chief Accounting Officer

<PAGE>



                                  CERTIFICATION


I, Patrick J. Foye, certify that:


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


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


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


4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


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


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      annual report (the "Evaluation Date"); and


      c) Presented in this annual report our conclusions about the effectiveness
      of the disclosure  controls and  procedures  based on our evaluation as of
      the Evaluation Date;


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


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: March 28, 2003

                                /s/Patrick J. Foye
                                Patrick J. Foye
                                Executive   Vice  President  of  DBL  Properties
                                Corporation,  equivalent of the chief  executive
                                officer of the Partnership

<PAGE>

                                  CERTIFICATION


I, Paul J. McAuliffe, certify that:


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


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


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


4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


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


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      annual report (the "Evaluation Date"); and


      c) Presented in this annual report our conclusions about the effectiveness
      of the disclosure  controls and  procedures  based on our evaluation as of
      the Evaluation Date;


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


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: March 28, 2003

                                    /s/Paul J. McAuliffe
                                    Paul J. McAuliffe
                                    Executive Vice President and Chief Financial
                                    Officer  of  DBL   Properties   Corporation,
                                    equivalent of the chief financial officer of
                                    the Partnership


<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").

    10.10     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.

     99   Certification of Chief Executive Officer and Chief Financial Officer

    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.

    99.9      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  is  hereby  incorporated  herein  by
              reference.


<PAGE>


Exhibit 99


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



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

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

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


                                           /s/Patrick J. Foye
                                    Name:  Patrick J. Foye
                                    Date:  March 28, 2003


                                           /s/Paul J. McAuliffe
                                    Name:  Paul J. McAuliffe
                                    Date:  March 28, 2003



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