<PAGE>   1

                                    FORM 10-K

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

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 1998

                         Commission File Number 0-21276

                      DATRONIC FINANCE INCOME FUND I, L.P.
             (Exact name of Registrant as specified in its charter)

    Delaware                                                   36-3744792
----------------------                                     ------------------
   State or other                                           (I.R.S. Employer
   jurisdiction of                                         Identification No.)
   incorporation or
   organization

1300 E. Woodfield Road, Suite 312, Schaumburg, Illinois           60173 
-------------------------------------------------------         ----------
(Address of principal executive offices)                        (Zip Code)

Registrant's telephone number, including area code: (847) 240-6200
                                                    --------------

Securities registered pursuant to Section 12(b) of the Act:

Title of each class                  Name of each exchange on which registered
       NONE                                              NONE
-------------------                  -----------------------------------------

Securities registered pursuant to Section 12(g) of the Act:

                      Units of Limited Partnership Interest
                      -------------------------------------
                                (Title of class)

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 Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such report(s)), and (2) has been subject to such filing
requirements for the past 90 days. Yes  x   No
                                      -----    -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. [x]




<PAGE>   2


                                     PART I


ITEM 1 - BUSINESS

Datronic Finance Income Fund I, L.P. (the "Partnership"), a Delaware Limited
Partnership, was formed on November 21, 1990. The Partnership offered Units of
Limited Partnership Interests (the "Units") during 1991 and early 1992 raising
$29,117,000 of limited partner funds.

As more fully described in Part II, Item 8, Notes 1, 4 and 7, during the second
calendar quarter of 1992, it was learned that Edmund J. Lopinski, Jr., the
president, director and majority stockholder of Datronic Rental Corp. ("DRC"),
the then general partner, in conjunction with certain other parties, may have
diverted approximately $13.3 million of assets from the Datronic Partnerships
and Transamerica Equipment Leasing Income Fund, L.P.("TELIF") for his/their
direct or indirect benefit. During 1992, a class action lawsuit was filed and
subsequently certified on behalf of the limited partners in the Datronic
Partnerships against DRC, various officers of DRC and various other parties. On
March 4, 1993, a settlement was approved to resolve certain portions of the suit
to enable the operations of the Datronic Partnerships to continue while
permitting the ongoing pursuit of claims against alleged wrongdoers (the
"Settlement"). In connection with the Settlement, DRC was replaced by Lease
Resolution Corporation ("LRC") as the general partner of the Partnership.

The Partnership was formed to acquire finance leases for a variety of
low-technology, high-technology and other equipment. The cash generated during
the Partnership's Operating Phase from such investments was used to pay the
operating costs of the Partnership, make distributions to the limited partners
and the general partner (subject to certain limitations) and reinvest in
additional finance leases. During the Partnership's Liquidating Phase, which
began October 1, 1996, the cash generated from such investments is used to pay
the liquidating costs of the Partnership and make cash distributions to the
limited partners and the general partner (subject to certain limitations).
Concurrent with the commencement of the Liquidating Phase, the Partnership began
the orderly liquidation of the Partnership's assets.

A presentation of information about industry segments, geographic regions, raw
materials or seasonality is not applicable and would not be material to an
understanding of the Partnership's business taken as a whole. Since the
Partnership ceased investing in leases effective October 1995, a discussion of
sources and availability of leases, backlog and competition is not material to
an understanding of the Partnership's future activity.


                                       2

<PAGE>   3

The Partnership has no employees. LRC, the General Partner, employed 27 persons
at December 31, 1998 all of whom attend to the operations of the Datronic
Partnerships.

ITEM 2 - PROPERTIES

The Partnership's operations are located in leased premises of approximately
15,000 square feet in Schaumburg, Illinois.

LRC occupies approximately 3,800 square feet of office space in Schaumburg,
Illinois in a real estate property that is a Recovered Asset (see Part II, Item
8, Note 4) held for the benefit of the Datronic Partnerships.

ITEM 3 - LEGAL PROCEEDINGS

Reference is made to Part II, Item 8, Note 7 for a discussion of material legal
proceedings involving the Partnership.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of limited partners during the fourth
quarter of the fiscal year covered by this report through the solicitation of
proxies or otherwise.




                                       3

<PAGE>   4


                                    PART II


ITEM 5 - MARKET FOR THE REGISTRANT'S LIMITED PARTNERSHIP UNITS AND RELATED
LIMITED PARTNER AND GENERAL PARTNER MATTERS

                               Market Information

The Units are not listed on any exchange or national market system, and there is
no established public trading market for the Units. To the best of LRC's
knowledge, no trading market exists for the Units that would jeopardize the
Partnership's status for federal income tax purposes.

As of March 16, 1999, the Partnership estimates that there were approximately
1,572 record owners of Units.

                                 Distributions

Reference is made to Part II, Item 8, Notes 6 and 9 for a discussion of Classes
of Limited Partners and distributions paid to limited partners and the general
partner.

ITEM 6 - SELECTED FINANCIAL DATA

The following table sets forth selected financial data as of December 31, 1998,
1997, 1996, 1995, and 1994 and for the five years then ended. The amounts
presented are aggregated for all Classes (A, B, and C) of Limited Partners,
unless otherwise noted. This information should be read in conjunction with the
financial statements included in Item 8 which also reflects amounts for each of
the classes of limited partners.




                                       4


<PAGE>   5

Statements of Revenue and Expenses Data
---------------------------------------
 (in thousands, except for
  Unit amounts)

                                        For the years ended December 31,
                              -------------------------------------------------
                                1998      1997      1996      1995       1994
                                ----      ----      ----      ----       ----


Total revenue                 $   536    $   381   $   659   $ 1,177    $ 1,367

Total expenses                    789        761     2,067     2,000      2,278
                              -------    -------   -------   -------    -------

Net loss                         (253)   $  (380)  $(1,408)  $  (823)   $  (911)
                              =======    =======   ========  =======    =======

Net loss
 per Unit

 Class A                         (5.29)  $ (9.37)  $(25.07)  $(13.64)   $(15.21)
                               =======   =======   =======   =======    =======
 Class B                         (4.15)  $ (6.03)  $(23.76)  $(14.05)   $(15.53)
                               =======   =======   =======   =======    =======
 Class C                         (4.15)  $ (6.03)  $(23.76)  $(14.05)   $(15.53)
                               =======   =======   =======   =======    =======


Distributions per Unit
 (per year)

 Class A                          -      $  -      $   -     $  4.20    $114.44
                              =======    =======   =======   =======    =======
 Class B                          -      $ 15.44   $ 30.26   $ 56.00    $ 62.49
                              =======    =======   =======   =======    =======
 Class C                          -      $ 12.21   $ 28.78   $ 56.00    $ 62.49
                              =======    =======   =======   =======    =======

Weighted average number
 of Units outstanding

 Class A                        7,699      7,699     7,699     7,699      7,699
                              =======    =======   =======   =======    =======
 Class B                       50,475     50,475    50,475    50,475     50,475
                              =======    =======   =======   =======    =======
 Class C                           60         60        60        60         60
                              =======    =======   =======   =======    ========


Balance Sheet Data
------------------
 (in thousands, except)
  for unit amounts
                                                  As of December 31, 
                              -------------------------------------------------
                               1998        1997      1996     1995       1994
                               ----        ----      ----     ----       ----

Total assets                  $ 4,220    $ 4,516   $ 5,857   $ 9,003    $12,870
                              =======    =======   =======   =======    =======

Total liabilities             $    41    $    84   $   262   $   450    $   552
                              =======    =======   =======   =======    =======

Partners' equity              $ 4,179    $ 4,432   $ 5,595   $ 8,553    $12,318
                              =======    =======   =======   =======    =======

Book value per Unit

  Class A                     $ 55.57    $ 60.86   $ 70.23    $ 95.30   $112.15
                              =======    =======   =======    =======   =======
  Class B                     $ 79.57    $ 83.72   $105.18    $159.18   $228.04
                              =======    =======   =======    =======   =======
  Class C                     $ 86.96    $ 92.44   $113.90    $167.90   $236.76
                              =======    =======   =======    =======   =======


                                       5

<PAGE>   6


ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion and analysis presents information pertaining to the
Partnership's operating results and financial condition.

RESULTS OF OPERATIONS

The Partnership had a net loss of $253,000 in 1998 in the aggregate for all
classes of partners. This compares to aggregate net losses in 1997 and 1996 of
$381,000 and $1,408,000, respectively. Differences in operating results between
Liquidating and Continuing Limited Partners are attributable to lease income and
expenses associated with new lease investments made since the March 4, 1993
Settlement. Liquidating Limited Partners do not participate in these post
Settlement activities. Significant factors affecting overall operating results
for the three years ended December 31, 1998 include the following:

Lease income:
Since October 1996, the Partnership has been in its Liquidating Phase which
prohibits investing in any new leases. Accordingly, the lease portfolio has
continued to decrease as collections are made, resulting in a continued decline
in lease income over the three years ended December 31, 1998. This trend will
continue as the Partnership liquidates its remaining leases. An additional
factor affecting year-to-year comparisons was a $85,000 reduction of lease
income in 1996 due to the return of lease overpayments that were recognized as
revenue in earlier periods.

Litigation proceeds:
Litigation proceeds represent the Partnership's proportionate share of
recoveries received in connection with the resolution of litigation against its
former accountants. See Note 7 to the Partnership's financial statements
included in Item 8.

Recovery of Datronic Assets:
Recovery of Datronic Assets represents the Partnership's 10.2% share of
previously reserved cash balances held by a nominee company for the benefit of
the Datronic Partnerships. During 1998, potential claims against these funds
were resolved and a total of $750,000 was distributed proportionately to each of
the Datronic Partnerships. See Note 5 to the Partnership's financial statements
included in Item 8.

Interest income:
Interest income for all three years includes earnings on invested cash balances.
In addition, 1996 includes interest of $54,000 previously earned on restricted
cash balances.

Amortization of organization and lease acquisition costs:
Amortization of organization and lease acquisition costs ended as of September
1996 when these costs became fully amortized.


                                       6



<PAGE>   7


Management fees - New Era:
These fees were paid to New Era Funding for managing the day-to-day operations
of the Partnership under a Management Agreement that was terminated effective
June 30, 1996. Accordingly, 1998 and 1997 reflect no New Era management fees and
1996 results reflect only six months of such fees plus $550,000 in termination
and non-compete fees. Effective July 1, 1996, LRC assumed responsibility for the
day-to-day management of the Partnership and the related expenses are included
in General Partner's expense reimbursement (see Note 8 to the Partnership's
financial statements included in Item 8).

General Partner's expense reimbursement:
General Partner's expense reimbursement includes payments to LRC for expenses it
incurred as general partner in excess of those covered by its partner
distributions. Effective July 1, 1996, these expenses include additional
expenses incurred by LRC in its management of the day-to-day operations of the
Partnership. Included in 1997 expenses is $35,000 of insurance premiums for
coverage that extends through the ultimate liquidation of the Partnership and
$19,000 of one-time charges for relocating the former New Era staff to reduced
office space. See Note 9 to the Partnership's financial statements included in
Item 8.

Professional fees - litigation:
Professional fees - litigation represent fees paid in connection with the
Partnership's litigation which is described in Note 7 to the Partnership's
financial statements included in Item 8. The 1998 and 1997 increases reflect
fees paid in connection with the litigation against the Partnership's former
accountants. Included in the 1998 amount are contingent fees paid or accrued
based on amounts recovered.

Professional fees - other:
Professional fees - other for the three years ended December 31, 1998 reflect a
decreasing level of professional services required as a result of the decrease
in the Partnership's lease portfolio and related activities.

Provision (credit) for lease loss:
This provision (credit) reflects Management's ongoing assessment of the
potential losses inherent in the lease portfolio.

Provision (credit) for loss on Diverted and other assets:
This provision (credit) represents the Partnership's share of any decrease
(recovery) in the estimated net realizable value of various assets held for the
benefit of the Datronic Partnerships. The credit in 1997 reflects a recovery of
amounts previously reserved for in 1995. Because of the fluctuating nature of
real estate values and the inherent difficulty of estimating the affects of
future events, the amounts ultimately realized from these assets could differ



                                       7



<PAGE>   8


significantly from their recorded amounts. See Note 4 to the Partnership's
financial statements included in Item 8.

LIQUIDITY AND CAPITAL RESOURCES

During 1998, Partnership assets continued to be converted to cash in order to
pay Partnership operating expenses and to provide for the ultimate liquidation
of the Partnership. During the year, Partnership cash and cash equivalents
increased by $1,050,000 to $2,929,000 at December 31, 1998 from $1,879,000 at
December 31, 1997. This increase is primarily due to cash receipts from
collections on leases of $905,000 and a distribution of Diverted and other
assets of $577,000, partially offset by cash used in operations of $432,000.

The Partnership's sources of future liquidity are expected to come from
cash-on-hand, the cash receipts from leases owned by the Partnership as well as
the disposition of the remaining Diverted Assets. The ultimate liquidation date
of the Partnership and its associated costs are not yet certain due to various
timing issues relating to the liquidation of the Partnership's remaining assets.
The lease portfolio is scheduled to be fully liquidated by September 2000 and
the remaining Diverted Assets (consisting primarily of an office building in
Schaumburg, Illinois) are expected to be liquidated during 1999.

Through the second quarter of 1998, it appeared unlikely that the Partnership
would make any additional distributions until such time as its remaining assets
were liquidated and the pending litigation resolved. Now that additional assets
have been liquidated, the General Partner has determined that an interim cash
distribution will be paid to the limited partners shortly after the end of the
first quarter of 1999. The General Partner is in the process of determining the
amount that will be available for this distribution and its allocation among
each class of Limited Partner. This distribution will be made to owners of
record as of December 31, 1998 even if their units are subsequently sold.

IMPACT OF INFLATION AND CHANGING PRICES

Inflation is not expected to have any significant direct, determinable effect on
the Partnership's business or financial condition.

IMPACT OF YEAR 2000 ISSUE

LRC has conducted a comprehensive review of the computer systems used to support
the Partnership's operations to determine whether any systems could be affected
by the Year 2000 Issue. The Year 2000 Issue relates to computer programs that
use two digits rather than four to define the year. This could cause
date-sensitive software to recognize the digits "00" as the year 1900 rather
than 2000. LRC does not expect the Partnership to be affected by the Year 2000
Issue because the systems used to support the Partnership's operations are



                                       8



<PAGE>   9




already substantially able to meet the reduced operating requirements of the
Partnership in the Year 2000. Furthermore, the only material relationships the
Partnership has with third parties that could be affected by the Year 2000 are
those with the Partnership's banking institutions. LRC has been advised by the
Partnership's banking institutions that they are Year 2000 compliant.

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information called for in this disclosure is not applicable to the
Registrant.



                                       9



<PAGE>   10


ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                                                      Page(s)
                                                                      ------
Audited Financial Statements:

         Independent Auditors' Report                                  11-12

         Balance Sheets
             In Total for All Classes
             of Limited Partners at December 31,
             1998 and 1997                                                13

             By Class of Limited Partner
               December 31, 1998                                          14

               December 31, 1997                                          15

         Statements of Revenue and Expenses
             In Total for All Classes of Limited Partners
             for the years ended December 31,
             1998, 1997 and 1996                                          16

             By Class of Limited Partner for the years ended
               December 31, 1998                                          17

               December 31, 1997                                          18

               December 31, 1996                                          19

         Statements of Changes in Partners' Equity
             for the years ended December 31,
             1998, 1997, and 1996                                         20

         Statements of Cash Flows
             In Total for All Classes of Limited Partners
             for the years ended December 31,
             1998, 1997 and 1996                                          21

             By Class of Limited Partner for the years ended
               December 31, 1998                                          22

               December 31, 1997                                          23

               December 31, 1996                                          24

         Notes to Financial Statements                                 25-36


                                       10


<PAGE>   11

                          INDEPENDENT AUDITORS' REPORT



The Partners of Datronic
Finance Income Fund I, L.P.

We have audited the accompanying balance sheets in total for all classes of
limited partners of DATRONIC FINANCE INCOME FUND I, L.P. ("the Partnership") as
of December 31, 1998 and 1997 and the related statements of revenue and expenses
in total for all classes of limited partners, of changes in partners' equity and
of cash flows in total for all classes of limited partners for each of the three
years in the period ended December 31, 1998. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Partnership as of December
31, 1998 and 1997, and the results of its operations in total for all classes of
limited partners and its cash flows in total for all classes of limited partners
for each of the three years in the period ended December 31, 1998 in conformity
with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the Partnership's
financial statements taken as a whole. As described in Note 2, the accounting
records of the Partnership are maintained to reflect the interests of each of
the classes of limited partners. Additional information consisting of the
balance sheets by class of limited partner as of December 31, 1998 and 1997, the
statements of revenue and expenses by class of limited partner and the
statements of cash flows by class of limited partner for the three years in the
period ended December 31, 1998 have been prepared by management solely for the
information of the limited partners and are not a required part of the financial
statements. This additional information has been subjected to the auditing



                                       11




<PAGE>   12


procedures applied in the audit of the Partnership's financial statements and,
in our opinion, has been allocated to the respective classes of limited partners
in accordance with the terms of the Amended Partnership Agreement described in
Note 9 and is fairly stated in all material respects in relation to the
Partnership's financial statements taken as a whole.

As explained more fully in Notes 1 and 4, the former President and Majority
Stockholder of Datronic Rental Corporation ("DRC"), the general partner of the
Partnership until March 4, 1993, and others are alleged to have diverted, for
their benefit, approximately $13 million from the Partnership and related
entities -- Datronic Equipment Income Fund XVI, XVII, XVIII, XIX, XX, L.P., and
Transamerica Equipment Leasing Income Fund, L.P. (collectively "the
Partnerships"). Substantially all of the assets known to have been improperly
acquired with the diverted funds have been recovered for the benefit of the
Partnerships.




Altschuler, Melvoin and Glasser LLP

Chicago, Illinois
March 9, 1999



                                       12


<PAGE>   13

                      DATRONIC FINANCE INCOME FUND I, L.P.
                                 BALANCE SHEETS
                  IN TOTAL FOR ALL CLASSES OF LIMITED PARTNERS


                                                    December 31,
                                      ---------------------------------------

                                            1998                     1997
                                            ----                     ----
ASSETS
------
                                                                       
Cash and cash equivalents             $    2,929,708           $    1,879,490
Judgment receivable, net                      38,853                        -
Net investment in direct financing                                           
  leases                                     633,563                1,440,939
Diverted and other assets, net               617,681                1,195,081
Datronic assets, net                               -                        -
                                      --------------           --------------
                                                                             
                                      $    4,219,805           $    4,515,510
                                      ==============           ==============
                                                                             
LIABILITIES AND PARTNERS' EQUITY                                             
--------------------------------
                                             
Accounts payable and accrued                                                 
  expenses                             $      22,879           $       18,455
Lessee rental deposits                        17,737                   65,035
                                      --------------           --------------
                                                                             
     Total liabilities                        40,616                   83,490
                                                                             
Total partners' equity                     4,179,189                4,432,020
                                      --------------           --------------
                                                                             
                                      $    4,219,805           $    4,515,510
                                      ==============           ==============


                See accompanying notes to financial statements.


                                       13

<PAGE>   14


                      DATRONIC FINANCE INCOME FUND I, L.P.
                                 BALANCE SHEETS
                          BY CLASS OF LIMITED PARTNER

                                               December 31, 1998
                                -----------------------------------------------
                                  Liquidating       Continuing
                                   Limited           Limited           Total
                                   Partners          Partners
                                -----------------------------------------------
ASSETS                          
------                                                                     

Cash and cash equivalents       $   325,257      $  2,604,451      $  2,929,708
Judgment receivable, net                                           
                                      5,136            33,717            38,853
Net investment in direct 
  financing leases                        -           633,563           633,563
Diverted and other assets, net       81,657           536,024           617,681
Datronic assets, net                      -                 -                 -
                                -----------      ------------      ------------
                                $   412,050      $  3,807,755      $  4,219,805
                                ===========      ============      ============
                                                                          
LIABILITIES AND PARTNERS' EQUITY                                          
                                                                          
Accounts payable and accrued                                              
  expenses                      $     2,273      $     20,606      $     22,879
Lessee rental deposits                2,345            15,392            17,737
                                -----------      ------------      ------------
                                                                  
     Total liabilities                4,618            35,998            40,616
                                                                  
Total partners' equity              407,432         3,771,757         4,179,189
                                -----------      ------------      ------------
                                $   412,050      $  3,807,755      $  4,219,805
                                ===========      ============      ============



                See accompanying notes to financial statements.


                                       14
<PAGE>   15


                      DATRONIC FINANCE INCOME FUND I, L.P.
                                 BALANCE SHEETS
                          BY CLASS OF LIMITED PARTNER


                                             December 31, 1997
                            --------------------------------------------------
                               Liquidating       Continuing
                                Limited           Limited                    
                                Partners          Partners            Total
                            --------------------------------------------------
ASSETS                      
------

Cash and cash equivalents   $     294,408     $    1,585,082     $   1,879,490
Net investment in direct   
  financing leases                  3,412          1,437,527         1,440,939
Diverted and other 
  assets, net                     157,990          1,037,091         1,195,081
Datronic assets, net                    -                  -                 -
                            -------------     --------------     -------------
                            $     455,810     $    4,059,700     $   4,515,510
                            =============     ==============     =============
                                                                      
LIABILITIES AND PARTNERS' EQUITY                                      
--------------------------------
                                            
Accounts payable and 
  accrued expenses          $       1,197     $       17,258     $      18,455
Lessee rental deposits              6,069             58,966            65,035
                            -------------     --------------     -------------
                                                               
     Total liabilities              7,266             76,224            83,490
                                                               
Total partners' equity            448,544          3,983,476         4,432,020
                            -------------     --------------     -------------
                            $     455,810     $    4,059,700     $   4,515,510
                            =============     ==============     =============


                See accompanying notes to financial statements.


                                       15



<PAGE>   16


                      DATRONIC FINANCE INCOME FUND I, L.P.
                       STATEMENTS OF REVENUE AND EXPENSES
                  IN TOTAL FOR ALL CLASSES OF LIMITED PARTNERS


                                          For the years ended December 31,
                                    -------------------------------------------

                                         1998          1997             1996
                                         ----          ----             ----
Revenue:                                                         
  Lease income                      $   149,342    $   311,239    $     525,104
  Litigation proceeds                   222,122              -                -
  Recovery of Datronic assets            76,500              -                -
  Interest income                        88,593         69,525          133,505
                                    -----------    -----------    -------------
                                        536,557        380,764          658,609
                                    -----------    -----------    -------------
                                                                  
Expenses:                                                         
  Amortization of organization and                                
    lease acquisition costs                   -              -          179,532
  Management fees - New Era                   -              -          955,112
  General Partner's expense                                       
    reimbursement                       543,940        597,112          315,864
  Professional fees - litigation        206,693        109,850           77,894
  Professional fees - other             110,405        132,837          188,782
  Other operating expenses               25,503         22,124           27,414
  Provision (credit) for lease                                    
    losses                              (97,153)             -          250,000
  Provision (credit) for loss on                                  
    Diverted and other assets                 -       (100,548)          71,820
                                    -----------    -----------    -------------

                                        789,388        761,375        2,066,418
                                    -----------    -----------    -------------
                                                                  
Net loss                            $  (252,831)   $  (380,611)   $  (1,407,809)
                                    ===========    ===========    =============
                                                                  
Net loss  - General Partner         $    (2,528)   $    (3,807)   $     (14,078)
                                    ===========    ===========    =============
                                                                  
Net loss - Limited Partners         $  (250,303)   $  (376,804)   $  (1,393,731)
                                    ===========    ===========    =============




                See accompanying notes to financial statements.


                                       16
<PAGE>   17



                      DATRONIC FINANCE INCOME FUND I, L.P.
                       STATEMENTS OF REVENUE AND EXPENSES
                          BY CLASS OF LIMITED PARTNER
                      For the year ended December 31, 1998

                                  Liquidating       Continuing
                                   Limited           Limited
                                   Partners          Partners         Total
                                --------------    ------------    ------------

Revenue:                        
  Lease income                  $          939   $     148,403    $    149,342
  Litigation proceeds                   29,365         192,757         222,122
  Recovery of Datronic assets           10,113          66,387          76,500
  Interest income                       10,086          78,507          88,593
                                --------------    ------------    ------------
                                        50,503         486,054         536,557
                                --------------    ------------    ------------
                                                                              
Expenses:                                                                     
  General Partner's expense                                                   
    reimbursement                       52,279         491,661         543,940
  Professional fees - litigation        27,325         179,368         206,693
  Professional fees - other             13,101          97,304         110,405
  Other operating expenses               3,293          22,210          25,503
  Credit for lease losses               (4,383)        (92,770)        (97,153)
                                --------------    ------------    ------------
                                        91,615         697,773         789,388
                                --------------    ------------    ------------
                                                                              
Net loss                        $      (41,112)   $   (211,719)   $   (252,831)
                                ==============    ============    ============
                                                                             
Net loss - General Partner      $         (411)   $     (2,117)   $     (2,528)
                                ==============    ============    ============
                                                                             
Net loss - Limited Partners     $      (40,701)   $   (209,602)   $   (250,303)
                                ==============    ============    ============
                                                                  
Net loss per limited                                              
  partnership unit              $        (5.29)   $      (4.15)    
                                ==============    ============    
                                                                  
Weighted average number of      
  limited partnership units     
  outstanding                   $        7,699          50,535    
                                ==============    ============    




                See accompanying notes to financial statements.
                                        
                                        
                                       17


<PAGE>   18



                      DATRONIC FINANCE INCOME FUND I, L.P.
                       STATEMENTS OF REVENUE AND EXPENSES
                          BY CLASS OF LIMITED PARTNER
                      For the year ended December 31, 1997


                                    Liquidating     Continuing
                                     Limited         Limited          Total
                                     Partners        Partners
                                    -----------    ------------    ------------

Revenue:
  Lease income                      $     1,100    $    310,139    $    311,239
  Interest income                         6,961          62,564          69,525
                                    -----------    ------------    ------------ 

                                          8,061         372,703         380,764
                                    -----------    ------------    ------------ 

Expenses:
  General Partner's expense                                         
    reimbursement                        61,792         535,320         597,112
  Professional fees - litigation         14,522          95,328         109,850
  Professional fees - other              15,128         117,709         132,837
  Other operating expenses                2,769          19,355          22,124
  Credit for loss on                                                
    Diverted and other assets           (13,293)        (87,255)       (100,548)
                                    -----------    ------------    ------------ 

                                         80,918         680,457         761,375
                                    -----------    ------------    ------------ 

Net loss                            $   (72,857)   $   (307,754)   $   (380,611)
                                    ===========    ============    ============ 

Net loss - General Partner          $      (729)   $     (3,078)   $     (3,807)
                                    ===========    ============    ============ 

Net loss - Limited Partners         $   (72,128)   $   (304,676)   $   (376,804)
                                    ===========    ============    ============ 

Net loss per limited
   partnership unit                 $     (9.37)   $      (6.03)
                                    ===========    ============ 

Weighted average number of limited
   partnership units outstanding          7,699          50,535
                                    ===========    ============ 





                See accompanying notes to financial statements.
                                        
                                        
                                       18
<PAGE>   19

                      DATRONIC FINANCE INCOME FUND I, L.P.
                       STATEMENTS OF REVENUE AND EXPENSES
                          BY CLASS OF LIMITED PARTNER
                      For the year ended December 31, 1996

                                    Liquidating     Continuing
                                      Limited         Limited         Total
                                      Partners        Partners
                                   -------------------------------------------
Revenue:
  Lease income                     $    (5,123)   $    530,227    $    525,104
  Interest income                       10,211         123,294         133,505
                                   -----------    ------------    ------------ 

                                         5,088         653,521         658,609
                                   -----------    ------------    ------------ 

Expenses:
  Amortization of organization and
    lease acquisition costs             23,734         155,798         179,532
  Management fees - New Era             96,922         858,190         955,112
  General Partner's expense
    reimbursement                       34,044         281,820         315,864
  Professional fees - litigation        10,298          67,596          77,894
  Professional fees - other             22,538         166,244         188,782
  Other operating expenses               3,024          24,390          27,414
  Provision for lease losses                 -         250,000         250,000
  Provision for loss on
    Diverted and other assets            9,494          62,326          71,820
                                   -----------    ------------    ------------ 

                                       200,054       1,866,364       2,066,418
                                   -----------    ------------    ------------ 

Net loss                           $  (194,966)   $ (1,212,843)   $ (1,407,809)
                                   ===========    ============    ============ 

Net loss - General Partner         $    (1,950)   $    (12,128)   $    (14,078)
                                   ===========    ============    ============ 

Net loss - Limited Partners        $  (193,016)   $ (1,200,715)   $ (1,393,731)
                                   ===========    ============    ============ 

Net loss per limited
  partnership unit                 $    (25.07)   $     (23.76)
                                   ===========    ============ 

Weighted average number of limited
  partnership units outstanding          7,699          50,535
                                   ===========    ============ 


                See accompanying notes to financial statements.



                                       19
<PAGE>   20


                      DATRONIC FINANCE INCOME FUND I, L.P.
                   STATEMENTS OF CHANGES IN PARTNERS' EQUITY
                  For the three years ended December 31, 1998



                                          Liquidating    Continuing
                               General      Limited       Limited       Total
                              Partner's     Partners'     Partners'    Partners'
                                Equity       Equity        Equity       Equity
                             ---------- ------------  -----------   ----------- 

Balance, December 31, 1995   $      -   $   716,367   $ 7,836,093   $ 8,552,460

  Distributions to partners   (21,028)            -    (1,528,098)   (1,549,126)
  Net loss                    (14,078)     (193,016)   (1,200,715)   (1,407,809)
  Allocation of General                                              
    Partner's Equity           35,106        (1,950)      (33,156)            -
                             --------   -----------   -----------   -----------

Balance, December 31, 1996          -       521,401     5,074,124     5,595,525
                             --------   -----------   -----------   -----------

  Distributions to partners    (2,895)            -      (779,999)     (782,894)
  Net loss                     (3,807)      (72,128)     (304,676)     (380,611)
  Allocation of General                                              
    Partner's Equity            6,702          (729)       (5,973)            -
                             --------   -----------   -----------   -----------

Balance, December 31, 1997          -       448,544     3,983,476     4,432,020
                             --------   -----------   -----------   -----------

  Net loss                     (2,528)      (40,701)     (209,602)     (252,831)
  Allocation of General                                              
    Partner's Equity            2,528          (411)       (2,117)            -
                             --------   -----------   -----------   -----------

Balance, December 31, 1998   $      -   $   407,432   $ 3,771,757   $ 4,179,189
                             ========   ===========   ===========   ===========




                See accompanying notes to financial statements.
                                        
                                        
                                       20



<PAGE>   21

                      DATRONIC FINANCE INCOME FUND I, L.P.
                            STATEMENTS OF CASH FLOWS
                  IN TOTAL FOR ALL CLASSES OF LIMITED PARTNERS

                                              For the years ended December 31,
                                              --------------------------------
                                           1998          1997           1996
                                           ----          ----           ----

Cash flows from operating activities:
  Net loss                              $ (252,831)  $ (380,611)   $ (1,407,809)
  Adjustments to reconcile net loss                                
    to net cash used in operating                                  
    activities:                                                    
    Amortization expense                         -            -         179,532
    Provision (credit) for lease losses    (97,153)           -         250,000
    Provision (credit) for loss on                                 
      Diverted and other assets                  -     (100,548)         71,820
    Changes in assets and liabilities:                             
      Judgment receivable, net             (38,853)           -               -
      Accounts payable and                                         
        accrued expenses                     4,424      (44,968)         (7,833)
      Lessee rental deposits               (47,298)    (133,060)       (180,498)
      Due from management                                          
        company                                  -       37,353         (37,633)
                                       -----------   ----------    ------------
                                          (431,711)    (621,834)     (1,132,421)
                                       -----------   ----------    ------------
                                                                   
Cash flows from investing activities:                              
  Principal collections on leases          904,529    1,662,989       2,417,946
  Distribution of Diverted and other                               
    assets                                 577,400            -               -
  Release of Restricted cash                     -            -         335,572
                                       -----------   ----------    ------------
                                         1,481,929    1,662,989       2,753,518
                                       -----------   ----------    ------------
                                                                   
Cash flows from financing activities:                              
  Distributions to Limited Partners              -     (779,999)     (1,528,098)
  Distributions to General Partner               -       (2,895)        (21,028)
                                       -----------   ----------    ------------
                                                 -     (782,894)     (1,549,126)
                                       -----------   ----------    ------------
                                                                   
Net increase in cash and                                           
  cash equivalents                       1,050,218      258,261          71,971
Cash and cash equivalents:                                         
  Beginning of year                      1,879,490    1,621,229       1,549,258
                                       -----------   ----------    ------------
  End of year                          $ 2,929,708   $1,879,490    $  1,621,229
                                       ===========   ==========    ============





                 See accompanying notes to financial statements



                                       21
<PAGE>   22



                      DATRONIC FINANCE INCOME FUND I, L.P.
                            STATEMENTS OF CASH FLOWS
                          BY CLASS OF LIMITED PARTNER
                      For the year ended December 31, 1998


                                             
                                       Liquidating    Continuing
                                         Limited       Limited
                                         Partners      Partners        Total
                                       -----------  ------------     ----------
 
Cash flows from operating activities:
  Net loss                             $  (41,112)  $   (211,719)   $  (252,831)
  Adjustments to reconcile net loss                
    to net cash used in operating                  
    activities:                                    
    Credit for lease losses                (4,383)       (92,770)       (97,153)
    Changes in assets and liabilities:             
      Judgment receivable, net             (5,136)       (33,717)       (38,853)
      Accounts payable and                         
        accrued expenses                    1,076          3,348          4,424
      Lessee rental deposits               (3,724)       (43,574)       (47,298)
                                       ----------   ------------   ------------
                                                   
                                          (53,279)      (378,432)      (431,711)
                                       ----------   ------------   ------------
                                                   
Cash flows from investing activities:              
  Principal collections on leases           7,795        896,734        904,529
  Distribution of Diverted and other               
    assets                                 76,333        501,067        577,400
                                       ----------   ------------   ------------
                                                   
                                           84,128      1,397,801      1,481,929
                                       ----------   ------------   ------------
                                                   
Net increase in cash and                           
  cash equivalents                         30,849      1,019,369      1,050,218
Cash and cash equivalents:                         
  Beginning of year                       294,408      1,585,082      1,879,490
                                       ----------   ------------   ------------
  End of year                          $  325,257   $  2,604,451   $  2,929,708
                                       ==========   ============   ============
                                                           
                                                                       



                 See accompanying notes to financial statements



                                       22
<PAGE>   23


                      DATRONIC FINANCE INCOME FUND I, L.P.
                            STATEMENTS OF CASH FLOWS
                          BY CLASS OF LIMITED PARTNER
                      For the year ended December 31, 1997


                                        Liquidating   Continuing
                                          Limited       Limited
                                          Partners      Partners       Total
                                        ----------   ------------   -----------

Cash flows from operating activities:
  Net loss                              $  (72,857)  $  (307,754)   $  (380,611)
  Adjustments to reconcile net loss
    to net cash used in operating
    activities:
    Credit for loss on
      Diverted and other assets            (13,293)      (87,255)      (100,548)
    Changes in assets and liabilities:
      Accounts payable and
        accrued expenses                    (5,822)      (39,146)       (44,968)
      Lessee rental deposits               (14,171)     (118,889)      (133,060)
      Due from management                                            
        company                              3,725        33,628         37,353
                                       -----------   -----------   ------------

                                          (102,418)     (519,416)      (621,834)
                                       -----------   -----------   ------------

Cash flows from investing activities:
  Principal collections on leases            8,672     1,654,317      1,662,989
                                       -----------   -----------   ------------

                                             8,672     1,654,317      1,662,989
                                       -----------   -----------   ------------

Cash flows from financing activities:
  Distributions to Limited Partners              -      (779,999)      (779,999)
  Distributions to General Partner               -        (2,895)        (2,895)
                                       -----------   -----------   ------------
                                                 -      (782,894)      (782,894)
                                       -----------   -----------   ------------

Net increase (decrease) in cash and
  cash equivalents                         (93,746)      352,007        258,261
Cash and cash equivalents:
  Beginning of year                        388,154     1,233,075      1,621,229
                                       -----------   -----------   ------------
  End of year                          $   294,408   $ 1,585,082   $  1,879,490
                                       ===========   ===========   ============






                 See accompanying notes to financial statements


                                       23





<PAGE>   24


                      DATRONIC FINANCE INCOME FUND I, L.P.
                            STATEMENTS OF CASH FLOWS
                           BY CLASS OF LIMITED PARTNER
                      For the year ended December 31, 1996


                                       Liquidating   Continuing
                                         Limited      Limited
                                         Partners     Partners       Total
                                       -----------  ------------  ------------

Cash flows from operating activities:                
  Net loss                             $  (194,966) $ (1,212,843) $ (1,407,809)
  Adjustments to reconcile net loss                               
    to net cash used in operating                                 
    activities:                                                   
    Amortization expense                    23,734       155,798       179,532
    Provision for lease losses                   -       250,000       250,000
    Provision for loss on                                         
      Diverted and other assets              9,494        62,326        71,820
    Changes in assets and liabilities:                            
      Accounts payable and                                        
        accrued expenses                      (915)       (6,918)       (7,833)
      Lessee rental deposits               (20,246)     (160,252)     (180,498)
      Due from management                                         
        company                             (3,762)      (33,871)      (37,633)
                                       -----------  ------------  ------------
                                          (186,661)     (945,760)   (1,132,421)
                                       -----------  ------------  ------------
                                                                  
Cash flows from investing activities:                             
  Principal collections on leases           60,555     2,357,391     2,417,946
  Release of Restricted cash                44,363       291,209       335,572
                                       -----------  ------------  ------------
                                           104,918     2,648,600     2,753,518
                                       -----------  ------------  ------------
                                                                  
Cash flows from financing activities:                             
  Distributions to Limited Partners              -    (1,528,098)   (1,528,098)
  Distributions to General Partner               -       (21,028)      (21,028)
                                       -----------  ------------  ------------
                                                 -    (1,549,126)   (1,549,126)
                                       -----------  ------------  ------------
                                                                  
Net increase (decrease) in cash and                               
  cash equivalents                         (81,743)      153,714        71,971
Cash and cash equivalents:                                        
  Beginning of year                        469,897     1,079,361     1,549,258
                                       -----------  ------------  ------------
  End of year                          $   388,154  $  1,233,075  $  1,621,229
                                       ===========  ============  ============


                 See accompanying notes to financial statements


                                       24

<PAGE>   25


                      DATRONIC FINANCE INCOME FUND I, L.P.
                       NOTES TO THE FINANCIAL STATEMENTS
                       DECEMBER 31, 1998, 1997, AND 1996

NOTE 1 - ORGANIZATION:

Datronic Finance Income Fund I, L.P., a Delaware Limited Partnership (the
"Partnership"), was formed on November 21, 1990 for the purpose of acquiring and
leasing both high- and low-technology equipment. Through March 4, 1993, Datronic
Rental Corporation ("DRC") was the general partner of the Partnership and
Datronic Equipment Income Funds XVI, XVII, XVIII, XIX, and XX, (collectively,
the "Datronic Partnerships") and was co-general partner of Transamerica
Equipment Leasing Income Fund, L.P. ("TELIF").

In 1992, it was alleged that the chairman of DRC (who was also its president and
majority stockholder), in conjunction with various other parties, had
misappropriated and commingled $13.3 million of funds belonging to this and the
other Datronic Partnerships and TELIF. The Partnership's portion of these funds
was $1.9 million. In connection with a partial settlement of a class action
lawsuit arising from these allegations, Lease Resolution Corporation ("LRC")
replaced DRC as general partner of this and the other Datronic Partnerships on
March 4, 1993. LRC is a Delaware non-stock corporation formed for the sole
purpose of acting as general partner of the Datronic Partnerships.

On October 1, 1996, the Partnership began its Liquidating Phase under which it
has ceased investing in new leases and began the orderly liquidation of its
assets.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

  BASIS OF FINANCIAL STATEMENTS - The accounting records of the Partnership are
being maintained to reflect the interests of each of the classes of limited
partners (see Note 9). Each class of limited partner is not a separate legal
entity holding title to individual assets nor the obligor of individual
liabilities. Accordingly, assets allocated to a specific class of limited
partner are available to settle claims of the Partnership as a whole. Additional
information consisting of the balance sheets by class of limited partner as of
December 31, 1998 and 1997, the statements of revenue and expenses by class of
limited partner and the statements of cash flows by class of limited partner for
the three years ended December 31, 1998 have been prepared to present
allocations of the various categories of assets, liabilities, revenue, expenses
and cash flows of the Partnership to each of the classes of limited partners in
accordance with the Amended Partnership Agreement. In addition, the general
partner's equity has been allocated to each class of limited partner for
purposes of additional information because the equity attributable to the
general partner will be allocated to the limited





                                       25


<PAGE>   26

                      DATRONIC FINANCE INCOME FUND I, L.P.
                 NOTES TO THE FINANCIAL STATEMENTS - CONTINUED


partners upon final dissolution of the Partnership. For purposes of this
additional information, the interests of the Class B and Class C Limited
Partners have been combined as "Continuing Limited Partners." At December 31,
1998, the amounts per Unit relating to these two classes are identical with the
exception that the per Unit value of Class C Limited Partners is $7.39 per Unit
higher than the Class B Limited Partners because, in accordance with the 1993
Settlement, Class Counsel fees and expenses related to the Settlement, net of
Datronic Assets, were not allocated to the Class C Limited Partners (see Note
5).

  CASH AND CASH EQUIVALENTS - Cash and cash equivalents consist principally of
overnight investments in high quality, short-term corporate demand notes
(commercial paper). Due to the nature of the Partnership's commercial paper
investments, Management does not believe there is any significant market risk
associated with such investments. Amounts due (to) from the general partner
(LRC) and other Datronic Partnerships are also included.

  NET INVESTMENT IN DIRECT FINANCING LEASES - Net investment in direct financing
leases consists of the present value of future minimum lease payments and
residuals under non-cancelable lease agreements. Residuals are valued at the
estimated fair market value of the underlying equipment at lease termination.

Leases are classified as non-performing when it is determined that the only
remaining course of collection is litigation. All balances relating to the lease
are netted together and no further income is accrued when a lease is classified
as non-performing.

Lease income includes interest earned on the present value of lease payments and
residuals (recognized over the term of the lease to yield a constant periodic
rate of return), interest collected on non-performing leases, late fees, and
other lease related items.

  ALLOWANCE FOR LEASE LOSSES - An allowance is recorded to reflect estimated
losses inherent in the existing portfolio of leases. Additions to the allowance
are made by means of a provision for lease losses, which is charged to expense.
Recoveries of amounts previously reserved are reflected as credits to the
provision for lease loss. The amounts shown in the accompanying Statements of
Revenue and Expenses reflect the net effect of provisions and recoveries.
Write-offs are deducted from the allowance.

 DUE (TO) FROM GENERAL PARTNER AND OTHER DATRONIC PARTNERSHIPS - In the ordinary
course of the Partnership's day-to-day operations, there are occasions when the
general partner and/or other Datronic Partnerships owe amounts to, and are owed
amounts from, the



                                       26

<PAGE>   27



                      DATRONIC FINANCE INCOME FUND I, L.P.
                 NOTES TO THE FINANCIAL STATEMENTS - CONTINUED


Partnership. It is the Partnership's policy not to charge (credit) interest on
these payable (receivable) balances and to include them as cash equivalents.

  NET EARNINGS (LOSS) PER LIMITED PARTNERSHIP UNIT - Net earnings (loss) per
unit is based on net earnings (loss) after giving effect to a 1% allocation to
the general partner. The remaining 99% of net earnings (loss) for each of the
Liquidating and Continuing Limited Partners is divided by the weighted-average
number of units outstanding to arrive at net earnings (loss) per limited
partnership unit for each class of limited partner.

  USE OF ESTIMATES - In preparing financial statements in conformity with
generally accepted accounting principles, Management makes estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.


NOTE 3 - NET INVESTMENT IN DIRECT FINANCING LEASES:

The components of the net investment in direct financing leases at December 31,
1998 and 1997 are as follows:


                                            December 31, 1998 
                             ----------------------------------------------
                             Liquidating       Continuing
                               Limited           Limited
                              Partners           Partners          Total
                             -----------       -----------      -----------
Performing leases
  Minimum lease payments
    receivable               $       -        $   573,995       $   573,995
  Unearned income                    -            (42,585)          (42,585)
                             ---------        -----------       -----------
Total performing leases              -            531,410           531,410
Non-performing leases            5,190          1,079,797         1,084,987
                             ---------        -----------       -----------
Net investment in direct
  financing leases before 
  allowance                      5,190          1,611,207         1,616,397
Allowance for lease losses      (5,190)          (977,644)         (982,834)
                             ---------        -----------       -----------
Net investment in direct
  financing leases           $       -        $   633,563       $   633,563
                             =========        ===========       ===========

Billed and outstanding 
  balances included in 
  net investment in 
  direct financing leases:   $       -        $    10,864       $    10,864
                             =========        ===========       ===========


                                       27



<PAGE>   28


                      DATRONIC FINANCE INCOME FUND I, L.P.
                 NOTES TO THE FINANCIAL STATEMENTS - CONTINUED


                                                 December 31, 1997 
                                    ------------------------------------------
                                     Liquidating     Continuing
                                       Limited        Limited
                                       Partners       Partners         Total   
                                    ------------    -----------    -----------
Performing leases
  Minimum lease payments
    receivable                      $      -        $ 1,509,542    $ 1,509,542
  Unearned income                          -           (159,590)      (159,590)
                                    ------------    -----------    -----------
Total performing leases                    -          1,349,952      1,349,952
Non-performing leases                     13,654      1,296,847      1,310,501
                                    ------------    -----------    -----------
Net investment in direct
  financing leases before allowance       13,654      2,646,799      2,660,453
Allowance for lease losses               (10,242)    (1,209,272)    (1,219,514)
                                    ------------    -----------    -----------
Net investment in direct
  financing leases                  $      3,412    $ 1,437,527    $ 1,440,939
                                    ============    ===========    ===========

Billed and outstanding balances
  included in net investment
  in direct financing leases:       $      -        $    22,844    $    22,844
                                    ============    ===========    ===========

An analysis of the changes in the allowance for lease losses by Class of Limited
Partner for 1996, 1997 and 1998 follows:

                                    Liquidating     Continuing
                                      Limited        Limited
                                      Partners       Partners        Total   
                                   ------------    -----------    -----------
 Balance at December 31, 1995      $     14,108    $ 1,049,218    $ 1,063,326
  Additions                                -           250,000        250,000
  Write-offs                             (1,640)       (26,865)       (28,505)
                                   ------------    -----------    -----------

  Balance at December 31, 1996           12,468      1,272,353      1,284,821
  Write-offs                             (2,226)       (63,081)       (65,307)
                                   ------------    -----------    -----------

  Balance at December 31, 1997           10,242      1,209,272      1,219,514
  Recoveries                             (4,383)       (92,770)       (97,153)
  Write-offs                               (669)      (138,858)      (139,527)
                                   ------------    -----------    -----------

  Balance at December 31, 1998     $      5,190    $   977,644    $    982,83
                                   ============    ===========    ===========


                                       28


<PAGE>   29


                      DATRONIC FINANCE INCOME FUND I, L.P.
                  NOTES TO THE FINANCIAL STATEMENTS - CONTINUED


The Partnership leased equipment with lease terms generally ranging from two to
five years. Minimum payments scheduled to be received on performing leases for
each of the succeeding years ending after December 31, 1998 by Class of Limited
Partner are as follows:

                    Liquidating            Continuing
                      Limited                Limited
                     Partners               Partners                 Total 
                    -----------            ----------             ----------
1999                $      -               $  440,205             $  440,205
2000                       -                  133,790                133,790 
                    -----------            ----------             ----------
                    $      -               $  573,995             $  573,995
                    ===========            ==========             ==========


NOTE 4 - DIVERTED AND OTHER ASSETS:

The $13.3 million of funds allegedly misappropriated from the Datronic
Partnerships and TELIF (collectively, the "Partnerships") (see Note 1) were
commingled by the alleged wrongdoers with $10.3 million of funds and used to
acquire various assets. $20.7 million of such assets (collectively, "Diverted
and other assets" or "Recovered Assets") were subsequently recovered for the
benefit of the Partnerships and each Partnership was assigned an undivided,
pro-rata interest in them. These assets are held by a nominee company.

Since 1993, LRC has been liquidating these assets and distributing available
funds to the Partnerships. The Partnership's 14.4% interest in the remaining
Diverted and other assets is reflected in the accompanying balance sheets at
cost, less valuation allowances established in prior years. At December 31,
1998, these assets consisted of a seven-story office building in Schaumburg,
Illinois and cash of $1.3 million.

During 1998, $4.0 million of cash (Partnership's share, $577,400) was
transferred from the nominee company to the Partnerships. These proceeds were
recorded as a reduction of "Diverted and other assets, net" in the Partnership's
Balance Sheet. The Partnership's Statements of Revenue and Expenses reflect a
1997 recovery ($100,548) of previously reserved balances and a 1996 loss
($71,820) from the settlement of claims against the Diverted and other assets.

LRC is continuing its efforts to market and sell the Schaumburg, Illinois office
building. The net sales proceeds, along with other available cash balances will
be distributed to the Partnerships.



                                       29


<PAGE>   30


                      DATRONIC FINANCE INCOME FUND I, L.P.
                 NOTES TO THE FINANCIAL STATEMENTS - CONTINUED


Due to the fluctuating nature of real estate values, the ultimate net realizable
value of the office building cannot be predicted.

NOTE 5 - DATRONIC ASSETS:

At December 31, 1998, Datronic Assets consisted of the Partnership's 10.2%
interest in fully-reserved residual cash of $46,000 held by a nominee company
for the benefit of the Class A and B Limited Partners of the Datronic
Partnerships. The reserves are in anticipation of future costs or claims that
may be paid by the nominee.

Originally, Datronic Assets consisted of all of DRC's net assets which were
transferred to an LRC nominee company for the purpose of reimbursing the Class A
and B Limited Partners for legal fees paid in connection with the 1993
court-approved partial settlement of class action litigation (see Notes 1, 2 and
7). Since then, all but $46,000 of the $1,732,000 (Partnership's share $177,000)
realized from the liquidation of the Datronic Assets has been distributed to the
Partnerships, including $750,000 (Partnership's share $76,500) during 1998. The
$76,500 realized by the Partnership this year was previously fully-reserved for
claims that were ultimately resolved during 1998 and is shown in the
accompanying Statements of Revenue and Expenses as "Recovery of Datronic
Assets". The $76,500 and all previously realized Datronic Assets have been
allocated to the Class A and B Limited Partners.

Upon dissolution of the nominee company, any portion of the $46,000 which is
realized in excess of its fully reserved balance of zero, will be distributed
proportionately to the Partnerships.

NOTE 6 - PARTNERS' EQUITY:

Distributions per Unit to the Limited Partners for 1996 and 1997 were:

                  Class A            Class B            Class C
                  -------            -------            -------
        1996       $   -             $ 30.26            $ 28.78
        1997       $   -             $ 15.44            $ 12.21

No distributions were made in 1998.

The Partnership began its Liquidating Phase on October 1, 1996. Pursuant to the
Amended Partnership Agreement, all distributions made before that date were paid
on a per-unit basis and all subsequent


                                       30


<PAGE>   31


                      DATRONIC FINANCE INCOME FUND I, L.P.
                 NOTES TO THE FINANCIAL STATEMENTS - CONTINUED


distributions were based on the positive Capital Account balances of each
limited partner within each Class (see Note 9).

At December 31,  1998,  1997 and 1996,  there were 7,699 Class A Units,  50,475
Class B Units,  60 Class C Units,  and one General Partner Unit outstanding.

Funds raised by each Class and cumulative distributions to limited partners by
Class from the Partnership's formation through December 31, 1998 are:

                                     Funds                Cumulative
                                    Raised               Distributions
                                  -----------            -------------

                  Class A         $ 3,849,500             $ 2,478,192
                  Class B          25,237,500              14,913,681
                  Class C              30,000                  17,295
                                  -----------             -----------

                  Total           $29,117,000             $17,409,168
                                  ===========             ===========


NOTE 7 - LITIGATION:

CLAIMS AGAINST PROFESSIONALS

During 1992, various class action lawsuits and Partnership cross- claims were
filed against the Partnerships' former securities counsel (Siegan, Barbakoff,
Gomberg & Kane - "Siegan") alleging breach of fiduciary duty and the
Partnerships' former independent accountants (Weiss and Company and Price
Waterhouse) alleging professional negligence, breach of contract, and violations
of Section 11 of the Securities Act of 1933.

The claims against Siegan were settled in 1995 pursuant to which Siegan paid a
total of $1.78 million (of which $124,000 went to the Partnership). Costs,
consisting primarily of legal fees, incurred by the Partnerships in pursuing
their claim against Siegan totaled approximately $683,000 (including $48,000
paid by the Partnership).

During 1998, the claims against the Partnerships' former accountants were
resolved. In May, LRC reached a settlement with Weiss under which Weiss agreed
to pay the Partnerships $2.4 million (Partnership's share is $170,000) in
exchange for a release from all Partnership claims and dismissal of the class
claims against it. The settlement was consummated in September and the
settlement proceeds, along with $37,000 of interest earned since May, were




                                       31




<PAGE>   32

                      DATRONIC FINANCE INCOME FUND I, L.P.
                  NOTES TO THE FINANCIAL STATEMENTS - CONTINUED


transferred to LRC for the benefit of the Partnerships. After payment of
$609,000 in contingent legal fees (Partnership's share is $43,000), $1.83
million of net proceeds were made available to the Partnerships. The
Partnership's share of the gross proceeds has been included in its 1998
Statements of Revenue and Expenses as "Litigation proceeds." The contingent
legal fees are included in the Statements of Revenue and Expenses as part of
"Professional fees litigation."

In June, a jury verdict was rendered against Price Waterhouse finding them
negligent in the conduct of their prior audits of the Datronic Partnerships. The
jury awarded damages of $739,300. In January 1999, the court entered final
judgment and awarded an additional $2,000 for trial costs. The Partnership's
share ($52,000) of the total award has been included in its 1998 Statements of
Revenue and Expenses as "Litigation proceeds." These damages bear 9% interest
until paid by the defendant. Contingent fees of 25% of the recovery will be due
upon receipt of the damages and are reflected in the Statements of Revenue and
Expenses as part of "Professional fees - litigation." The proceeds due to the
Partnership are included in its December 31, 1998 Balance Sheet, net of
contingent legal fees, as "Judgment receivable, net."

Legal fees and trial expenses incurred by the Partnership in pursuing its claims
against the former accountants have totaled $394,000 since 1993.

NOTE 8 - PARTNERSHIP MANAGEMENT:

Since July 1, 1996, LRC has directly managed the day-to-day operations of the
Datronic Partnerships. The cost of the day-to-day management services is
allocated to each partnership based on the level of services performed for each
partnership. These expenses are reimbursed to LRC pursuant to the terms of the
Amended Partnership Agreement (see Note 9).

Prior to July 1, 1996, the Datronic Partnerships were managed by New Era Funding
under the direction of LRC pursuant to a Management Agreement. Effective June
30, 1996, this agreement was terminated and, pursuant to the Management
Termination Agreement, New Era and its principals were paid an aggregate amount
of $4.2 million. The Partnership's share of these payments was $549,996 and is
included in the 1996 Statements of Revenue and Expenses as part of "Management
fees - New Era".





                                       32

<PAGE>   33


                      DATRONIC FINANCE INCOME FUND I, L.P.
                 NOTES TO THE FINANCIAL STATEMENTS - CONTINUED


As part of the Management Termination Agreement, two of New Era's principals
have been retained as consultants to the Datronic Partnerships through March 31,
1999 for an annual fee of $200,000 each. These payments are allocated to each of
the Datronic Partnerships based on the services performed for each Partnership
and are included in the accompanying Statements of Revenue and Expenses as part
of "General Partner's expense reimbursement".

NOTE 9 - PARTNERSHIP AGREEMENT:

As part of the 1993 Settlement each limited partner elected to become a Class A,
B or C Limited Partner.

Class A Limited Partners
This class elected to begin liquidating their interest in the Partnership as of
the Settlement date. Accordingly, each Class A Limited Partner is entitled to
receive cash distributions equal to their pro rata share of the net proceeds
from the disposition of assets owned by the Partnership on the Settlement Date,
plus their pro rata interest in the net proceeds from the disposition of
Datronic Assets, Diverted and other assets, and temporary investments. In
addition, Class A Limited Partners participated in the Class Action.

Class B Limited Partners
This class elected not to begin liquidation of their interest in the Partnership
as of the Settlement Date. Until the Liquidating Phase of the Partnership began
on October 1, 1996, each Class B Limited Partner received cash distributions
equal to 12.5% annually of their Adjusted Capital Contributions (as that term is
defined in the Amended Partnership Agreement). Available cash in excess of that
required to pay these distributions was invested in equipment and equipment
leases ("New Investments") and temporary investments on behalf of the Class B
Limited Partners. In addition, Class B Limited Partners participated in the
Class Action.

Class C Limited Partners
This class elected not to participate in the Class Action. Therefore, each Class
C Limited Partner: (i) preserved their individual claims against DRC and the
other defendants, (ii) did not participate in the Class Action, and (iii) did
not participate in the Settlement. In all other respects, including
distributions from the Partnership, Class C Limited Partners are the same as
Class B Limited Partners.



                                       33


<PAGE>   34


                      DATRONIC FINANCE INCOME FUND I, L.P.
                 NOTES TO THE FINANCIAL STATEMENTS - CONTINUED


Concurrent with the beginning of the Liquidating Phase on October 1, 1996, the
Partnership ceased making New Investments and the General Partner (LRC) began
the orderly liquidation of Partnership assets. Pursuant to this, cash reserves
are to be maintained sufficient to satisfy all liabilities of the Partnership
and provide for future contingencies. Cash available for distribution after
satisfying such requirements ("Cash Flow Available for Distribution") will be
distributed to the General and Limited Partners as described below.

During the Liquidating Phase, net Partnership proceeds from all sources, less
cash reserves needed to satisfy Partnership liabilities and provide for future
contingencies will be apportioned among the Class A, B and C Limited Partners,
each class as a group, in accordance with each class' interest in each type of
asset. Then, Liquidating Distributions will be made to the Limited Partners
within each class in accordance with the positive Capital Account balance of
each Limited Partner until all Limited Partners' Capital Account balances are
zero, and thereafter, pro rata based on the number of units outstanding.

The Amended Partnership Agreement provides for the General Partner (LRC) to
receive quarterly distributions equal to 1% of the Cash Flow Available for
Distribution. In addition, LRC receives reimbursement for expenses incurred in
excess of those covered by the 1% distribution. These expense reimbursements are
paid one quarter in advance and are adjusted based on LRC's actual expenses. LRC
allocates its expenses to each of the Datronic Partnerships based on its
activities performed for each Partnership. Beginning July 1, 1996, LRC's expense
reimbursement includes expenses incurred in managing the day-to-day operations
of this and the other Datronic Partnerships. LRC is entitled to no other fees or
reimbursements from the Partnership.

The following summarizes the total of all payments to LRC during the three years
ended December 31, 1998:

                                             Year ended December 31,
                                   -------------------------------------------
                                     1998             1997            1996
                                     ----             ----            ----

1% Distribution                    $     -         $   21,233       $  104,304
Expense Reimbursement in excess
   of the 1% Distribution           4,079,994       5,369,846        2,955,260
                                   ----------      ----------       ----------
Total                              $4,079,994      $5,391,079       $3,059,564
                                   ==========      ==========       ==========




                                       34




<PAGE>   35


                      DATRONIC FINANCE INCOME FUND I, L.P.
                  NOTES TO THE FINANCIAL STATEMENTS - CONTINUED


The Partnership's share of these payments were:

                                             Year ended December 31, 
                                     ----------------------------------------
                                         1998          1997           1996
                                         ----          ----           ----

1% Distribution                      $     -       $    2,895      $   21,028
Expense Reimbursement in excess
   of the 1% Distribution               543,940       597,112         315,864
                                     ----------    ----------      ----------

Total                                $  543,940    $  600,007      $  336,892
                                     ==========    ==========      ==========


NOTE 10 - CONCENTRATION OF CREDIT RISK:

Leasing activity is conducted throughout the United States, with emphasis in
certain states such as California and New York. The cost of equipment under
lease typically ranges from $15,000 to $30,000. Such equipment includes, but is
not limited to: general purpose plant/office equipment, telecommunications
equipment, machine tool and manufacturing equipment, computers and terminals for
management information systems, photocopying equipment, medical equipment and
transportation equipment. At December 31, 1998, there are no significant
concentrations of business activity in any industry or with any one lessee. The
Partnership maintains a security interest in all equipment until the lessee's
obligations are fulfilled.


                                       35




<PAGE>   36


                      DATRONIC FINANCE INCOME FUND I, L.P.
                 NOTES TO THE FINANCIAL STATEMENTS - CONCLUDED


NOTE 11 - INCOME TAXES:

The Partnership is not subject to Federal income taxes and, accordingly, no
provision or credit for such taxes is reflected in the accompanying financial
statements. Instead, the tax effects of the Partnership's activities are
includable in the individual tax returns of its partners. The following table
reconciles the Partnership's net operating results determined in accordance with
generally accepted accounting principles with those reported for Federal income
tax purposes in total for all Partners and by Class of Partner for the year
ended December 31, 1998.


                                          Liquidating  Continuing
                               General      Limited      Limited
                               Partner      Partner      Partner       Total 
                             ----------   ----------   ----------   -----------

Net loss per accompanying
  statements                 $  (2,528)   $ (40,701)   $(209,602)   $ (252,831)

Effect of principal 
  repayments treated 
  as income for
  tax purposes                    (242)      (3,557)     (20,438)      (24,237)
Credit for lease losses            (10)        (125)        (818)         (953)
Provision for recovery of
  Diverted and other assets      1,541       20,166      132,370       154,077
Provision for Class Counsel
  fees and expenses, net          -           5,138       33,684        38,822

Other, net                        (205)      (2,062)     (18,214)      (20,481)
                              --------    ---------    ---------     ---------


Loss for Federal income tax
  purposes in total          $  (1,444)  $  (21,141)   $ (83,018)    $(105,603)
                             =========   ==========    =========     =========





                                       36


<PAGE>   37



ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

There have been no changes in accountants or disagreements with accountants on
accounting and financial disclosure.


                                    PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Partnership has no employees or directors. LRC was formed in December 1992
in contemplation of the Settlement for the sole purpose of acting as the general
partner for each of the Datronic Partnerships. LRC became general partner in
1993. LRC has a nominal net worth.

LRC, as a non-stock, not-for-profit corporation, does not have stockholders. The
executive officers of LRC are also the members of the Board of Directors of LRC.
None of the executive officers of LRC were previously affiliated with Datronic.
While LRC's duration is perpetual, it is anticipated that it will liquidate and
dissolve following the liquidation and dissolution of the last remaining
Datronic Partnership.

LRC's Board of Directors and executive officers, together with certain pertinent
information regarding their background, are set forth below:

                                    Director
      Name                      Position and Office                 Since 
---------------------        -------------------------              -----
Donald D. Torisky            Chairman of the Board and
                             Chief Executive Officer                12/92

Robert P. Schaen             Vice-Chairman of the Board and
                             Chief Financial Officer                12/92

Arthur M. Mintz              Vice-Chairman of the Board and
                             General Counsel                        12/92

Donald D. Torisky, age 60, has been associated with LRC since its inception in
1992. Mr. Torisky is also President of Barrington Management and Consulting,
Inc. where, prior to March 1993, he coordinated management consulting
opportunities for national and international Fortune 500 finance companies. From
1987 to 1990, Mr. Torisky worked with the TransAmerica Corporation as an
Executive Vice-President and board member of the TransAmerica Finance Group. Mr.
Torisky also served as the President and Chief Executive Officer of TransAmerica
Commercial Finance Corporation. With TransAmerica, Mr. Torisky managed and
directed a diversified financial services



                                       37


<PAGE>   38

portfolio of $4.6 billion with branches in the United States, Canada, the United
Kingdom and Australia. From 1962 to 1987, Mr. Torisky was with the Borg-Warner
Corporation. In 1983 he became President and Chief Executive Officer of
Borg-Warner Financial Services and an officer of Borg-Warner Corp. Mr. Torisky
has completed the Advanced Management Program at the Harvard Graduate School of
Business Administration. Mr. Torisky served honorably in the United States
Marine Corps, and holds a license in life, accident, and health insurance and a
Series 6 NASD license.

Robert P. Schaen, age 72, has been associated with LRC since its inception in
1992. Prior to his association with LRC, Mr. Schaen retired from Ameritech in
1991 after 39 years of service with the Bell System and Ameritech. At his
retirement he was the Vice-President and Comptroller of Ameritech. He started
his Bell System career with New York Telephone Company in 1952, was promoted and
transferred to AT&T in 1962, and thereafter, promoted and transferred to
Illinois Bell Telephone Company in 1965 where he managed personnel, accounting,
data systems and general operations prior to being elected Comptroller and
Assistant Secretary. In 1983, Mr. Schaen was named Vice-President and
Comptroller of Ameritech. Mr. Schaen served as a naval officer in the Pacific
Theater during World War II and retired from the Naval Reserve Intelligence
Service in 1968 with the rank of Commander. He graduated from Hobart College in
Geneva, New York in 1948 and after graduation remained there as a mathematics
and statistics instructor. In 1967 Mr. Schaen completed the Advanced Management
Program at the Harvard Graduate School of Business Administration.

Arthur M. Mintz, age 62, has been associated with LRC since its inception in
1992. Mr. Mintz is also Chairman of the Board of Olicon Imaging Systems, Inc.,
which was founded in 1991. Olicon Imaging Systems, Inc. is a teleradiology
company serving approximately 800 hospitals nationwide. Since 1987, he has also
served as President of AMRR Leasing Corporation and Vice President and General
Counsel of Mobile M.R. Venture, Ltd. In 1983, Mr. Mintz was a founder of
Diasonics, Incorporated and served as its Corporate Counsel. Diasonics was
listed on the New York Stock Exchange prior to its acquisition by Elsinth in
1995. In 1957, Mr. Mintz obtained a Bachelor of Arts Degree from Northwestern
University and in 1959, obtained his J.D. from Northwestern University School of
Law. Thereafter, Mr. Mintz served in the United States Army and was honorably
discharged. From 1965 to 1982, Mr. Mintz was a principal with the law firms of
Mintz, Raskin, Rosenberg, Lewis & Cohen (1965-1975), Mintz, Raskin and Lewis
(1975-1979), and Arthur M. Mintz, Ltd., P.C. (1979-1982).

Any change in the compensation of a director of LRC must be approved by the
other two non-interested members of the Board of Directors.




                                       38


<PAGE>   39


ITEM 11 - MANAGEMENT REMUNERATION

The Partnership has no officers or directors and instead is managed by the
general partner, LRC.

The Partnership Agreement, as amended, provides for LRC to receive reimbursement
for its operating expenses incurred in relation to its functions as General
Partner of the Datronic Partnerships. These reimbursements are detailed in Note
9 to the Partnership's financial statements included in Item 8.

Compensation paid to the Chief Executive Officer of LRC during 1998 was as
follows:

     Chairman of the
     Board and Chief                                        All Other
     Executive Officer              Salary               Compensation(b)
     -----------------             --------              ---------------
     Donald D. Torisky             $463,409                $3,200(a)

(a)      Represents the value of LRC's contribution to LRC's Savings and
         Retirement Plan allocable to Mr. Torisky for services rendered during
         1998.

(b)      Information concerning Bonus, Other Annual Compensation, Restricted
         Stock Award, Option/SARs and LTIP Payouts is not applicable.

This compensation was included in LRC's operating expenses reimbursed by all
Datronic Partnerships. The Partnership's share of such expense reimbursements,
including the 1% of Cash Flow Available for Distribution, was 13.33%.

The compensation of the other four highly compensated LRC executives, when
allocated to the Partnership, individually do not exceed $100,000.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

None.


ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


The Partnership has no officers or directors and instead is managed by the
general partner, LRC.

The Partnership Agreement, as amended, provides for LRC to receive reimbursement
for its operating expenses incurred in relation to its 


                                       39


<PAGE>   40



functions as General Partner of the Datronic Partnerships. These reimbursements
are detailed in Note 9 to the Partnership's financial statements included in
Item 8.



                                       40


<PAGE>   41



                                    PART IV

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of this report:

    (1)  Financial Statements

         See index to Financial Statements included in Item 8 of this report.


    (2)  Financial Statement Schedules

         None.

    (3)  Exhibits

         The Exhibits listed in the Exhibit Index immediately following the
         signature page are filed as a part of this report.

(b) Reports on Form 8-K

         None




                                       41

<PAGE>   42



                                   SIGNATURES
                                   ----------

Pursuant to the requirements of Section 13 or 15 (d) 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 on the 30th day of March
1999.


      DATRONIC FINANCE INCOME FUND I, L.P.

March 30, 1999            By: Lease Resolution Corporation,
                          General Partner


                          By:  /s/ Donald D. Torisky 
                              ------------------------------------
                              Donald D. Torisky
                              Chairman and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities indicated and on the dates indicated.


By:   /s/ Donald D. Torisky                                  March 30, 1999
     -----------------------------------------
     Donald D. Torisky Chairman and 
     Chief Executive Officer, Lease Resolution
     Corporation, General Partner of 
     Datronic Finance Income Fund I, L.P.


By:   /s/ Robert P. Schaen                                   March 30, 1999
     -----------------------------------------
     Robert P. Schaen
     Vice-Chairman and
     Chief Financial Officer, Lease 
     Resolution Corporation, General 
     Partner of Datronic Finance 
     Income Fund I, L.P.


By:   /s/ Arthur M. Mintz                                    March 30, 1999
     -----------------------------------------
     Arthur M. Mintz Vice-Chairman and 
     General Counsel, Lease Resolution
     Corporation, General Partner of
     Datronic Finance Income Fund I, L.P.


                                       42


<PAGE>   43


                                  EXHIBIT INDEX
                                  -------------


         EXHIBIT NO.         DESCRIPTION
         -----------         -----------

             27              Financial Data Schedule, which is submitted  
                             electronically to the Securities and Exchange  
                             Commission for information only and not filed.




                                       43