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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


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

                  For the quarterly period ended September 30, 1996

                         Commission file number: 0-25780

                             PRESIDIO CAPITAL CORP.

             (Exact name of registrant as specified in its charter)

      British Virgin Islands                                 N/A
(State or other jurisdiction of                       (I.R.S. Employer
 incorporation or organization)                      Identification No.)

c/o Hemisphere Management (Cayman) Limited
Zephyr House, Mary Street, Grand Cayman,
Cayman Islands, British West Indies                           N/A
(Address of principal executive offices)                  (Zip Code)


Registrant's telephone number, including area code: (441) 295-9166

Former name, former address and former fiscal year, if changed since last report
                                 N/A

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  and Exchange Act
of 1934  during the  preceding  12 months (or for such  shorter  period that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                     Yes    [ X ]     No    [   ]

  Indicate the number of shares outstanding of each of the issuer's classes of
                common stock, as of the latest practicable date:

       As of November 2, 1996, there were 8,766,569 Class A Common Shares, 
                       U.S. $0.01 par value, outstanding.
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<PAGE>
                     PRESIDIO CAPITAL CORP. AND SUBSIDIARIES

                                TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION     

Item 1.       Financial Statements

              Consolidated  Statements  of  Net  Assets  in  Liquidation  as  of
              September 30, 1996 (unaudited) and December 31, 1995 (audited)

              Unaudited  Consolidated  Statements  of  Changes  in Net Assets in
              Liquidation  for the Three and Nine Month Periods Ended  September
              30, 1996 and 1995

              Notes to Consolidated Financial Statements


Item 2.      Management's Discussion and Analysis of Financial Condition 
             and Liquidation Activities

Part II  - OTHER INFORMATION

Item 1.           Legal Proceedings  

Item 6.           Exhibits and Reports on Form 8-K     


SIGNATURES
<PAGE>
<TABLE>
<CAPTION>
                                      PRESIDIO CAPITAL CORP. AND SUBSIDIARIES

                                CONSOLIDATED STATEMENTS OF NET ASSETS IN LIQUIDATION

                                 (Expressed in thousands of United States dollars)

                                                                                 September 30,          December 31,
                                                                                      1996                 1995
                                                                                  (unaudited)            (audited)
<S>                                                                                 <C>                   <C>
Assets:

Cash and cash equivalents (including restricted
    cash of $22,108 and $21,603) ...............................................    $ 82,473              $120,613
Investments ....................................................................      30,518                32,769
Contract rights ................................................................      34,233               235,681
Notes and other receivables (net of non-recourse
    indebtedness of $0 and $17,599) ............................................      82,310                76,193
Other assets ...................................................................       3,372                 5,519
                                                                                    --------              --------
                      Total assets .............................................    $232,906              $470,775
                                                                                    ========              ========


Liabilities:

Debt ...........................................................................    $    900              $  4,895
Dividends payable ..............................................................      24,934                10,014
Estimated costs of liquidation .................................................      47,963                64,638
Estimated tax liability ........................................................       4,702                 6,000
                                                                                    --------              --------
                      Total liabilities ........................................      78,499                85,547
                                                                                    --------              --------

                              Net Assets in Liquidation ........................    $154,407              $385,228
                                                                                    ========              ========


                                   See notes to consolidated financial statements

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                               PRESIDIO CAPITAL CORP. AND SUBSIDIARIES

                                           UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN
                                                      NET ASSETS IN LIQUIDATION

                                          (Expressed in thousands of United States dollars)



                                                                     Three Month Period                       Nine Month Period
                                                                     Ended September 30,                     Ended September 30,
                                                               -----------------------------          ----------------------------
                                                                  1996                1995                1996                1995
                                                                  ----                ----                ----                ----
<S>                                                            <C>                 <C>                <C>                 <C>

Net Assets in Liquidation,
    beginning of period .............................          $ 208,987           $ 343,474          $ 385,228           $ 399,396


    Dividends paid / accrued ........................            (59,990)               --             (252,753)            (74,986)

    Increase from revaluation of
       assets and liabilities .......................              4,311               9,768             17,388              24,375

    Interest income .................................              1,099               1,346              4,544               5,803
                                                               ---------           ---------          ---------           ---------

Net Assets in Liquidation,
    end of period ...................................          $ 154,407           $ 354,588          $ 154,407           $ 354,588
                                                               =========           =========          =========           =========


                                           See notes to consolidated financial statements
</TABLE>
<PAGE>
                     PRESIDIO CAPITAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Presidio Capital Corp. ("Presidio" and, collectively with its subsidiaries,  the
"Company") was organized on August 29, 1994, in the British Virgin Islands under
the International  Business  Companies Act (Cap. 291), to purchase,  directly or
through  its  subsidiaries,  substantially  all  of  the  assets  of  Integrated
Resources,  Inc.  ("Integrated") for the purpose of liquidation and distribution
of capital to shareholders.  The Company was formed in accordance with the Sixth
Amended  Plan  of  Reorganization   submitted  by  the  Official   Committee  of
Subordinated Bondholders and the Steinhardt Group, (the "Plan") confirmed by the
United States  Bankruptcy  Court for the Southern  District of New York by order
dated  August  8,  1994.  The Plan was  consummated  on  November  3,  1994 (the
"Consummation Date").

Reference is made to the notes to the consolidated  financial statements for the
year ended  December 31, 1995,  included in the Company's  Annual Report on Form
10-K ( the  "Form  10-K")  for  information  with  regard  to the  organization,
significant  accounting  policies and disclosures made pursuant to the rules and
regulations of the Securities and Exchange Commission.

The interim financial data is unaudited;  however, in the opinion of management,
the Company's  interim financial data for the three and nine month periods ended
September 30, 1996 and 1995, includes all adjustments (consisting only of normal
recurring  adjustments)  necessary for a fair presentation of the results of the
interim  period.  These  consolidated  interim  financial  statements  and notes
thereto should be read in conjunction with the consolidated financial statements
and notes to consolidated  financial  statements  included in the Form 10-K, and
the Form 10-Q filed for the quarters ended March 31, 1996 and June 30, 1996.

Liquidation Basis

The Company's  financial  statements  are prepared on the  liquidation  basis of
accounting.  The liquidation basis of accounting is appropriate when liquidation
appears  imminent and the Company is no longer viewed as a going concern.  Under
this method of accounting,  assets are stated at their  estimated net realizable
values and liabilities are stated at their anticipated  settlement amounts.  The
valuations presented in these financial statements are presented in U.S. dollars
under U.S. generally accepted accounting principles.

The valuation of assets and liabilities requires many estimates and assumptions.
The actual value of any liquidating  distributions will depend upon a variety of
factors including, among others, the actual market prices of any assets that may
be  distributed  in kind,  the  proceeds  from the sale of any of the  Company's
assets  and  the  timing  of  distributions.  The  valuations  presented  in the
accompanying  Statements of Net Assets in Liquidation represent estimates at the
dates shown,  based on current  facts and  circumstances,  of the  estimated net
realizable  value of assets and estimated costs of  implementation  of the Plan.
The net values  ultimately  realized and costs actually incurred could be higher
or lower than the amounts recorded.
<PAGE>
NOTE 2 - INVESTMENTS

During the third  quarter,  the Company  purchased  units in certain real estate
limited  partnerships,  wherein  subsidiaries  of the  Company  are the  General
Partner.  Through  September  30,  1996,  total  investment  made in real estate
limited  partnerships  was  approximately  $2.5 million.  These  purchases  were
intended to be consistent  with,  and  incidental  to the Company's  liquidation
strategy, as these purchases have been made to protect and enhance the values of
the respective general partnership positions.

NOTE 3 - CONTRACT RIGHTS

During the three  months ended  September  30, 1996,  one tenant  purchased  its
leased  property from the Company,  as permitted under the terms of their lease,
for $2.1 million.

NOTE 4 - NOTES AND OTHER RECEIVABLES

In 1990,  Integrated sold the majority of its core financial services businesses
(including its insurance  subsidiary  Integrated Resources Life Co. ("Life")) to
Broad, Inc. In connection with the sale,  certain cash in Life was restricted by
order of the Iowa Insurance  Commissioner  from being distributed to Integrated.
Approval for  distribution  was  contingent,  in part,  upon the  resolution  of
various contingent  liabilities,  including  contingent claims relating to state
guarantee  funds for failed  insurance  companies.  The right to this  remaining
receivable from Life was  transferred to an indirect wholly owned  subsidiary of
Presidio,  in connection with the consummation of the Plan. On July 1, 1996, the
Iowa Insurance  Commissioner  concluded that all contingent liabilities had been
satisfied,  and  approved the  transfer of all  remaining  cash from Life to the
Company.  As a result, the Company received  approximately $13.4 million on July
2, 1996.

NOTE 5 - DIVIDENDS

On August 9, 1996,  dividends of approximately $35 million,  or $3.50 per share,
were paid to all  shareholders  of record as of August 2, 1996. On September 25,
1996,  the Board of  Directors  of  Presidio  authorized  a dividend  payable on
October  7, 1996,  of  approximately  $25  million,  or $2.49 per share,  to all
shareholders of record as of September 30, 1996.
<PAGE>
NOTE 6 - REVALUATION OF ASSETS AND LIABILITIES

The increase in Net Assets in Liquidation  resulting from  revaluation of assets
and  liabilities  for the three and nine month periods ended  September 30, 1996
and 1995 is as follows:
<TABLE>
<CAPTION>
                                                                           (000's)
                                                                     Three Month Period                        Nine Month Period
                                                                       Ended September                         Ended September 30,
                                                                    1996                1995              1996                1995
                                                                    ----                ----              ----                ----
<S>                                                             <C>                 <C>                 <C>                <C>
Increase in estimated net
    realizable value of assets ......................           $  4,425            $  8,693            $ 13,269           $ 14,031

Decrease (increase) in
    estimated costs of liquidation ..................               --                   (29)                238             (2,047)

(Payment) Return of overpayments and
    bankruptcy settlements ..........................               (114)              2,604               3,881             12,891

(Increase) in estimated tax
    liability .......................................               --                (1,500)               --                 (500)
                                                                --------            --------            --------           ---------

                                                                $  4,311            $  9,768            $ 17,388           $ 24,375
                                                                ========            ========            ========           ========
</TABLE>

The significant  components relating to the increase in estimated net realizable
value of assets in the quarter  ended  September  30,  1996,  were an accrual of
approximately  $2 million of interest on loans  receivable,  as well as proceeds
received on assets that were in excess of their carrying values.


NOTE 7 - LITIGATION

At a hearing  in the case of Mark  Erwin,  Trustee,  et. al. v.  Resources  High
Equity,  Inc., et. al. (the "HEP  Action"),  filed at the Superior Court for the
State of  California  for the County of Los  Angeles  (the  "Court"),  the Court
ordered the parties to brief certain  valuation issues,  the requisite  consents
required from limited  partners to approve the Exchange and  Settlement  and the
applicability of exemptions from the California  securities law. Thereafter,  in
response to the expert's report, the proposed  settlement was further revised to
require independent appraisals of all assets of the HEP Partnerships.

On July 18,  1996,  the  Court  preliminarily  approved  the  proposed,  revised
settlement of the HEP Action,  and made a preliminary  finding that the proposed
revised  settlement is fair,  adequate and  reasonable to the class,  and that a
settlement  class should be conditionally  certified.  After a hearing on August
19, 1996, the Court  approved the form and method of notice to limited  partners
regarding  the  proposed,  revised  settlement,  which has been sent to  limited
partners.
<PAGE>
At a hearing on October 23,  1996,  the Court  stated that it wished to consider
late-filed  briefs from certain  objectors  which were filed up to and including
the date of the  hearing.  The Court also  invited a further  response  from the
plaintiffs  to such  briefs.  On  November  4, 1996,  the Court  issued an order
seeking  comment on the final  version  of the  settlement  from the  California
Department of Corporations. The Court requested a response within 17 days of its
order. Upon final approval of the settlement,  a Consent Solicitation  Statement
concerning the Exchange would be sent to all limited partners. There would be at
least a 60 day solicitation period, and a reorganization of the HEP Partnerships
cannot be  consummated  unless a majority  of the  limited  partners  of the HEP
Partnerships affirmatively vote to approve it.

NOTE 8 - PENDING TRANSACTION

Presidio has initiated efforts to sell in a private securitization  transaction,
the Company's rights to a deferred payment stream which was originally generated
by Integrated's  tax shelter annuity business (the "TSA Payment  Stream").  This
transaction is expected to yield proceeds before expenses of  approximately  $21
million,  and is  scheduled  to  close  in  the  fourth  quarter  of  1996.  The
securitization  notes will not and have not been registered under the Securities
Act of  1933,  and  may not be  offered  or sold  in the  United  States  absent
registration or applicable exemption of registration requirement.

As part of this transaction,  certificates evidencing 99% of the entire residual
beneficial   interest   in  the  TSA  Payment   Stream,   will  be  issued  (the
"Certificates"),  and will be sold to T-Two TSA,  LLC (the  "Certificateholder")
and  Certificates(s)  evidencing the remaining 1% beneficial  ownership interest
will be sold to  T-Two  TSA II LLC  (the  "Affiliated  Purchaser").  Each of the
Affiliated  Purchaser and the  Certificateholder is a Delaware limited liability
company  whose  members  are  T-Two  Management,  LLC and  T-Two  Holding,  LLC,
("Holding").  Holding is also the indirect  99% owner of the residual  interests
resulting from the contract right securitization  completed in March 1996 and is
obligated to undertake a rights  offering of its equity to  shareholders  of the
Company  (the  "Rights  Offering").   Each  of  the  Certificateholder  and  the
Affiliated  Purchaser  will  purchase its  Certificate(s)  for cash equal to the
estimated  fair  value  thereof.  PCC and  Holding,  will  enter into a loan and
transaction  pursuant  to which PCC will loan to  Holding  $1,000,000  (the "TSA
Loan"),  with  interest  at 15%  per  annum,  the  proceeds  of  which  will  be
contributed to the Certificateholder  and used to acquire the Certificates.  The
TSA Loan matures on the earlier of March 31, 2001, or the successful  completion
of the Rights Offering. The proceeds from the Rights Offering, which the Company
believes  may not occur  until  1997,  will be used in part to repay  Holdings's
obligation to Presidio.
<PAGE>
ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND LIQUIDATION ACTIVITIES

The following section includes a discussion and analysis of financial  condition
and  liquidation  activities of the Company for the three and nine periods ended
September 30, 1996.

Liquidity and Capital Resources

The  Company's  primary  objectives  are to liquidate its assets in the shortest
time period  possible  while  realizing  the maximum  values for such assets and
reduction of operating costs. Although the Company considers its assumptions and
estimates as to the values and timing of such liquidations to be reasonable, the
period of time to  liquidate  the assets and  distribute  the  proceeds  of such
assets  is  subject  to   significant   business,   economic   and   competitive
uncertainties and contingencies, many of which are beyond the Company's control.

Cash  available for  distributions,  defined as cash and cash  equivalents  less
restricted cash,  decreased by  approximately  $19 million for the quarter ended
September  30, 1996,  primarily due to dividends  paid of $35 million  offset by
proceeds collected on an outstanding  receivable of one of its subsidiaries (see
Liquidation  Activities - IR Life Co.) and an increase in operating cash flow in
the quarter.

Restricted  cash at  September  30,  1996 was  $22.1  million  and is  primarily
comprised  of reserves  for  bankruptcy  claims of $4.1 million and deposits for
escrow accounts as security for  indemnification  of certain former officers and
directors of  Integrated  and the Class A Directors of Presidio of $16.8 million
(see A) and B) below).

A)       The  indemnity  for the former  officers and  directors  of  Integrated
         ("Qualified Indemnity") is collateralized by cash and all the stock and
         partnership interests in the Company's non-U.S.  subsidiaries under the
         Indemnification  Agreements  (the  "Indemnification  Agreements").  All
         distributions made by the Company are limited by a requirement that the
         Company have certain minimum net assets after distribution to discharge
         any pending and expected Qualified Indemnity  obligations.  The balance
         in the  Qualified  Indemnity  escrow  account at September 30, 1996 was
         $11.0 million.

         Presidio's  ability  to  make  distributions  to  stockholders  remains
         limited in accordance with the terms of the indemnification obligations
         of the former officers and directors of Integrated and its subsidiaries
         under  the  Indemnification  Agreements.  Presidio  has  no  basis  for
         believing  that  any  of  those  indemnification  obligations  will  be
         material and, to date, no claim for such indemnification has been made.
         However,  pursuant  to the  terms  of the  Indemnification  Agreements,
         Presidio  is required to notify  beneficiaries  thereunder  of proposed
         dividends and certain other proposed  transfers of cash made by certain
         subsidiaries   of  Presidio  to  Presidio,   and  by  Presidio  to  its
         shareholders,  and to retain the value of certain collateral granted as
         security for such indemnification obligations. Presidio provided notice
         to  the  beneficiaries  of  the  Indemnification  Agreements  prior  to
         distribution  of all dividends paid and declared during the nine months
         ended September 30, 1996.
<PAGE>
B)       The Plan also provided for  indemnification of the Class A Directors of
         Presidio. The indemnification  amounts are secured by an initial escrow
         deposit made on the  Consummation  Date.  Presidio is also  required to
         make quarterly escrow deposits equal to the greater of (i) $750,000, or
         (ii) 1% of any amounts  distributed to  shareholders  of Presidio,  for
         additional indemnification security. In accordance therewith,  Presidio
         deposited  $2,250,000  during the first  three  quarters  of 1996.  The
         escrowed amounts will not be available for distribution to shareholders
         until the indemnification agreement expires. The balance in the Class A
         Directors escrow account at September 30, 1996 was $5.8 million.

Presidio  believes  that cash on hand,  revenues  generated  from  interests  in
businesses  that  continue to operate and proceeds from selling  businesses  and
other assets will be sufficient to support the Company's operations and meet its
obligations.

Liquidation Activities

The Company's cash and cash  equivalents  decreased by  approximately  $19.1 and
$38.1  million for the three and nine month  period  ended  September  30, 1996,
respectively, as compared to an increase of $8.6 and a decrease of $60.4 million
for the same  periods of the prior year,  respectively.  The  components  of the
change in cash and cash equivalents, are as follows:
<TABLE>
<CAPTION>
                                                                                    (Millions)
                                                                   (unaudited)                      (unaudited)
                                                               Three Month Period                Nine Month Period
                                                                  September 30,                    September 30,
                                                              1996            1995              1996          1995
                                                              ----            ----              ----          ----
<S>                                                       <C>             <C>               <C>           <C>
Cash Inflows
Contract rights securitization proceeds, net              $     --        $     --          $  205.1      $    --
Operating cash inflows                                        23.9            11.4              57.5          48.9
Interest income                                                1.1             1.3               4.5           5.8
                                                          --------        --------          --------      --------
     Total Cash Inflows                                       25.0            12.7             267.1          54.7
                                                          --------        --------          --------      --------

Cash Outflows
Dividends paid                                                35.0              --             237.8          75.0
Loans to affiliates                                             --              --              31.5          --
Legal and other expenses - contract rights                     0.2             1.5              16.3           2.3
Legal, accounting and consulting fees                          1.9             0.4               5.2           5.5
Miscellaneous general and administrative costs                 1.9             1.2               8.7           8.9
Bankruptcy claims paid                                         2.5             1.0               3.0          21.3
Other                                                          2.6              --               2.6            --
Steinhardt Management Co.
     expense reimbursement                                      --              --               0.1           2.1
                                                          --------        --------          --------      -------- 
     Total Cash Outflows                                      44.1             4.1             305.2         115.1
                                                          --------        --------         ---------      --------
Increase (decrease) in cash and cash equivalents             (19.1)            8.6             (38.1)        (60.4)
Cash and cash equivalents, beginning of period               101.6           104.9             120.6         173.9
                                                          --------        --------         ---------      ---------
Cash and cash equivalents, end of period                  $   82.5        $  113.5         $    82.5      $  113.5
                                                          ========        ========         =========      ======== 
</TABLE>
<PAGE>
On August 9, 1996,  dividends of approximately $35 million,  or $3.50 per share,
were paid to all  shareholders  of record as of August 2, 1996. On September 25,
1996,  the Board of  Directors  of  Presidio  authorized  a dividend  payable on
October  7, 1996,  of  approximately  $25  million,  or $2.49 per share,  to all
shareholders of record as of September 30, 1996.

Current Operations

Operating  cash  inflows  from  period to period are not  comparable  due to the
timing of liquidation activities.

Interest  income  decreased in the quarter and nine months ended  September  30,
1996 as  compared  to the same  periods  of the  prior  year  due to lower  cash
balances resulting from increased distributions made to shareholders in 1996.

During the quarter ended  September  30, 1996,  payments were made in connection
with the resolution of certain remaining disputed  bankruptcy claims against the
Integrated Estate of $2.5 million. The payments were made in accordance with the
Plan.

Legal,   accounting  and  consulting   fees,  and   miscellaneous   general  and
administrative  expenses  increased in the quarter ended September 30, 1996, but
is slightly less for the nine months ended for the current  period,  as compared
to the same  periods  of the prior  year due to timing  of  various  liquidating
activities.

For the three months ended September 30, 1996

Investments
During the third  quarter,  the Company  purchased  units in certain real estate
limited  partnerships,  wherein  subsidiaries  of the  Company  are the  General
Partner.  Through  September  30, 1996 total  investment is  approximately  $2.5
million.  These purchases were intended to be consistent with, and incidental to
the Company's liquidation strategy, as these purchases have been made to protect
and enhance the values of the respective general partnership positions.

IR Life Co.
In 1990,  Integrated sold the majority of its core financial services businesses
(including its insurance  subsidiary  Integrated Resources Life Co. ("Life")) to
Broad, Inc. In connection with the sale,  certain cash in Life was restricted by
order of the Iowa Insurance  Commissioner  from being distributed to Integrated.
Approval for  distribution  was  contingent,  in part,  upon the  resolution  of
various contingent  liabilities,  including  contingent claims relating to state
guarantee  funds for failed  insurance  companies.  The right to this  remaining
receivable from Life was  transferred to an indirect wholly owned  subsidiary of
Presidio,  in connection with the consummation of the Plan. On July 1, 1996, the
Iowa Insurance  Commissioner  concluded that all contingent liabilities had been
satisfied,  and  approved the  transfer of all  remaining  cash from Life to the
Company.  As a result, the Company received  approximately $13.4 million on July
2, 1996.

Contract Rights
During the three  months ended  September  30, 1996,  one tenant  purchased  its
leased  property from the Company,  as permitted under the terms of their lease,
for $2.1 million.
<PAGE>
For the nine months ended September 30, 1996

Contract Rights
In May 1995,  Presidio  hedged future  Contract Right  transactions  through the
short sales of ten-year  U.S.  government  Notes  maturing in February and March
2005, and having an aggregate notional value of $225 million.  In March 1996 the
Company settled its position with regard to the Hedges  realizing a loss of $2.6
million.

In a private securitization transaction completed on March 28, 1996, the Company
sold 117 of the 123 Contract Rights owned directly or indirectly by the Company.
Such securitized transaction, which was unanimously approved by Presidio's Board
of Directors,  yielded  proceeds before  expenses and reserves of  approximately
$233  million,  approximately  $205  million  of which has been  distributed  to
Presidio or one of its subsidiaries.

The securitization  certificates that were sold are secured by substantially all
of the payment stream from the primary term of the related Contract Rights.  The
certificates sold in the securitization  are not backed by the Company.  Most of
the  remaining  payment  stream,  which  is  effectively   subordinated  to  the
certificates  sold in the  securitization,  will be used to make  payment to the
holder of another  certificate,  (the "T-Two Holder") 99% of which was sold to a
newly formed company, T-Two Holding, LLC ("the LLC"), an entity owned by certain
affiliates of Presidio (the  "Affiliates").  These  Affiliates are controlled by
the Chairman of the Board and the  President of Presidio.  On the Closing  Date,
Presidio made a $31.5 million  recourse loan to the Affiliates;  the proceeds of
which were used to  purchase  the  Affiliates  interests  in the LLC.  This loan
accrues  interest at 25% per annum,  and is reflected in the Company's Notes and
Receivables  balance at September  30, 1996.  As of September  30, 1996 interest
accrued on the loan is approximately $4.1 million. The LLC will conduct a rights
offering  directed to the Company's  shareholders as soon as practicable,  which
the Company  believes  may not occur until early 1997,  enabling  the  Company's
shareholders to acquire all of the LLC.

The  proceeds  of  such  rights  offering  will  be  used  in part by the LLC to
repurchase the membership  interests  initially acquired by the Affiliates,  who
will in turn, be obligated at that time to repay the $31.5 million Presidio loan
plus accrued interest.

HEP Action

At a hearing  in the case of Mark  Erwin,  Trustee,  et. al. v.  Resources  High
Equity,  Inc., et. al. (the "HEP  Action"),  filed at the Superior Court for the
State of  California  for the County of Los  Angeles  (the  "Court"),  the Court
ordered the parties to brief certain  valuation issues,  the requisite  consents
required from limited  partners to approve the Exchange and  Settlement  and the
applicability of exemptions from the California  securities law. Thereafter,  in
response to the expert's report, the proposed  settlement was further revised to
require independent appraisals of all assets of the HEP Partnerships.

On July 18,  1996,  the  Court  preliminarily  approved  the  proposed,  revised
settlement of the HEP Action,  and made a preliminary  finding that the proposed
revised  settlement is fair,  adequate and  reasonable to the class,  and that a
settlement  class should be conditionally  certified.  After a hearing on August
19, 1996, the Court  approved the form and method of notice to limited  partners
regarding  the  proposed,  revised  settlement,  which has been sent to  limited
partners.
<PAGE>
At a hearing on October 23,  1996,  the Court  stated that it wished to consider
late-filed  briefs from certain  objectors  which were filed up to and including
the date of the  hearing.  The Court also  invited a further  response  from the
plaintiffs  to such  briefs.  On  November  4, 1996,  the Court  issued an order
seeking  comment on the final  version  of the  settlement  from the  California
Department of Corporations. The Court requested a response within 17 days of its
order. Upon final approval of the settlement,  a Consent Solicitation  Statement
concerning the Exchange would be sent to all limited partners. There would be at
least a 60 day solicitation period, and a reorganization of the HEP Partnerships
cannot be  consummated  unless a majority  of the  limited  partners  of the HEP
Partnerships affirmatively vote to approve it.


PENDING TRANSACTION

Presidio has initiated efforts to sell in a private securitization  transaction,
the Company's rights to a deferred payment stream which was originally generated
by Integrated's  tax shelter annuity business (the "TSA Payment  Stream").  This
transaction is expected to yield proceeds before expenses of  approximately  $21
million,  and is  scheduled  to  close  in  the  fourth  quarter  of  1996.  The
securitization  notes will not and have not been registered under the Securities
Act of  1933,  and  may not be  offered  or sold  in the  United  States  absent
registration or applicable exemption of registration requirement.

As part of this transaction,  certificates evidencing 99% of the entire residual
beneficial   interest   in  the  TSA  Payment   Stream,   will  be  issued  (the
"Certificates"),  and will be sold to T-Two TSA,  LLC (the  "Certificateholder")
and  Certificates(s)  evidencing the remaining 1% beneficial  ownership interest
will be sold to  T-Two  TSA II LLC  (the  "Affiliated  Purchaser").  Each of the
Affiliated  Purchaser and the  Certificateholder is a Delaware limited liability
company  whose  members  are  T-Two  Management,  LLC and  T-Two  Holding,  LLC,
("Holding").  Holding is also the indirect  99% owner of the residual  interests
resulting from the contract right securitization  completed in March 1996 and is
obligated to undertake a rights  offering of its equity to  shareholders  of the
Company  (the  "Rights  Offering").   Each  of  the  Certificateholder  and  the
Affiliated  Purchaser  will  purchase its  Certificate(s)  for cash equal to the
estimated  fair  value  thereof.  PCC and  Holding,  will  enter into a loan and
transaction  pursuant  to which PCC will loan to  Holding  $1,000,000  (the "TSA
Loan"),  with  interest  at 15%  per  annum,  the  proceeds  of  which  will  be
contributed to the Certificateholder  and used to acquire the Certificates.  The
TSA Loan matures on the earlier of March 31, 2001, or the successful  completion
of the Rights Offering. The proceeds from the Rights Offering, which the Company
believes  may not occur  until  1997,  will be used in part to repay  Holdings's
obligation to Presidio.
<PAGE>

                     PRESIDIO CAPITAL CORP. AND SUBSIDIARIES

                           PART II - OTHER INFORMATION


Item 1.   Legal Proceedings

The  following  information  should be read in  conjunction  with Item 3. "Legal
Proceedings" of the Company's December 31, 1995 Form 10-K.

Mark Erwin,  Trustee,  et al v.  Resources  High Equity,  Inc.,  et al (the "HEP
Action")

Reference is made to Note 7 of the Consolidated  Financial Statements in Part I,
Item 1, Financial Statements.

Item 6.  Exhibits and Reports on Form 8-K

         (a)    Not applicable

         (b)    The  Company  was not  required  to file any reports on Form 8-K
                during the quarter ended September 30, 1996.
<PAGE>

                                                        SIGNATURES

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

                                           PRESIDIO CAPITAL CORP. (Registrant)

Date: November 14, 1996            By:/s/  Joseph M. Jacobs
                                           ---------------- 
                                           Joseph M. Jacobs
                                           Chief Executive Officer and President


Date: November 14, 1996           By:/s/  Jay L.   Maymudes
                                          -----------------
                                          Jay L. Maymudes
                                          Vice President, Treasurer and Chief
                                          Financial  Officer