SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

For the quarterly period ended                   June 30, 1997
                               -------------------------------------------------

                                       OR

[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the transition period from                        to
                               ----------------------    -----------------------

Commission file number                           0-19164
                       ---------------------------------------------------------

               Capital Preferred Yield Fund, A California Limited
       ------------------------------------------------------------------
       Partnership (Exact name of registrant as specified in its charter)


            California                                 68-0190817
      -----------------------               ------------------------------------
      (State of organization)               (I.R.S. Employer Identification No.)

 7175 West Jefferson Avenue, Suite 4000
          Lakewood, Colorado                             80235
----------------------------------------               ----------
(Address of principal executive offices)               (Zip Code)


       Registrant's telephone number, including area code (303) 980-1000
                                                          --------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  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  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes   X    No      .
                                       -----     -----

                        Exhibit Index appears on Page 12

                               Page 1 of 13 Pages


<PAGE>



                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

                          Quarterly Report on Form 10-Q
                              For the Quarter Ended
                                  June 30, 1997


                                Table of Contents
                                -----------------


PART I.  FINANCIAL INFORMATION                                              PAGE
                                                                            ----

     Item 1.  Financial Statements (Unaudited)

              Balance Sheets-June 30, 1997 and December 31, 1996             3

              Statements of Income - Three and Six months ended
              June 30, 1997 and 1996                                         4

              Statements of Cash Flows - Six months ended
              June 30, 1997 and 1996                                         5

              Notes to Financial Statements                                  6

     Item 2.  Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                     7-11


PART II. OTHER INFORMATION


     Item 1.  Legal Proceedings                                             12

     Item 6.  Exhibits and Reports on Form 8-K                              12

              Signature                                                     13


                                        2

<PAGE>



                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

                                 BALANCE SHEETS
                                   (Unaudited)

                                     ASSETS

                                                       June 30,     December 31,
                                                         1997           1996
                                                      -----------   ------------

Cash and cash equivalents                             $ 1,620,062   $ 2,672,112
Accounts receivable, net                                  373,753       390,607
Equipment held for sale or re-lease                     1,541,418     1,081,841
Net investment in direct finance leases                 3,972,977     5,316,787
Leased equipment, net                                   9,623,951    13,519,836
                                                      -----------   -----------

         Total assets                                 $17,132,161   $22,981,183
                                                      ===========   ===========

                        LIABILITIES AND PARTNERS' CAPITAL

LIABILITIES:
     Payable to affiliates                            $    46,695   $    65,370
     Accounts payable and accrued liabilities             808,527       821,791
     Rents received in advance                            152,811       230,501
     Distributions payable to partners                    873,109     1,317,409
     Discounted lease rentals                           2,875,095     4,363,104
     Financed operating lease rentals                   1,212,504     1,329,087
                                                      -----------   -----------

         Total liabilities                              5,968,741     8,127,262
                                                      -----------   -----------

PARTNERS' CAPITAL:
     General partner                                            -             -
     Limited partners:
         Class A                                        8,747,022    12,199,688
         Class B                                        2,416,398     2,654,233
                                                      -----------   -----------

         Total partners' capital                       11,163,420    14,853,921
                                                      -----------   -----------

         Total liabilities and partners' capital      $17,132,161   $22,981,183
                                                      ===========   ===========


   The accompanying notes are an integral part of these financial statements.

                                        3

<PAGE>



                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

                              STATEMENTS OF INCOME
                                   (Unaudited)
<TABLE>
<CAPTION>


                                                           Three Months Ended            Six Months Ended
                                                                June 30,                     June 30,
                                                       -------------------------     -------------------------
                                                          1997           1996           1997          1996
                                                       ----------     ----------     ----------     ----------
<S>                                                   <C>            <C>            <C>            <C>       

REVENUE:
  Operating lease rentals                              $1,606,275     $2,339,550     $3,168,487     $4,885,955
  Direct finance lease income                             264,957        301,665        514,379        556,090
  Equipment sales margin                                  110,068        222,562        237,562        392,099
  Interest income                                          22,102         49,853         42,170        102,040
                                                       ----------     ----------     ----------     ----------
         Total revenue                                  2,003,402      2,913,630      3,962,598      5,936,184
                                                       ----------     ----------     ----------     ----------

EXPENSES:
  Depreciation and amortization                           936,231      1,591,957      1,944,767      3,480,236
  Management fees paid to general partner                 112,996        169,630        226,100        351,770
  Direct services from general partner                     39,058         30,601         84,149         56,324
  Interest on discounted lease rentals                     55,031        137,025        125,223        300,349
  Interest on financed operating lease rentals             13,505         27,785         26,662         56,955
  General and administrative                               96,233        234,432        162,142        298,156
  Provision for losses                                    100,000        430,000        225,000        805,000
                                                       ----------     ----------     ----------     ----------
         Total expenses                                 1,353,054      2,621,430      2,794,043      5,348,790
                                                       ----------     ----------     ----------     ----------

NET INCOME                                             $  650,348     $  292,200     $1,168,555     $  587,394
                                                       ==========     ==========     ==========     ==========

NET INCOME ALLOCATED:
  To the general partner                               $  111,785     $  103,324     $  217,953     $  206,740
  To the Class A limited partners                         500,718        175,600        883,802        353,897
  To the Class B limited partner                           37,845         13,276         66,800         26,757
                                                       ----------     ----------     ----------     ----------

                                                       $  650,348     $  292,200     $1,168,555     $  587,394
                                                       ==========     ==========     ==========     ==========
  Net income per weighted average Class A
      limited partner units outstanding                $     1.99     $     0.69     $     3.51     $     1.40
                                                       ==========     ==========     ==========     ==========

  Weighted average Class A limited
      partner unit outstanding                            251,614        252,826        251,661        252,992
                                                       ==========     ==========     ==========     ==========

</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                        4

<PAGE>



                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>



                                                                         Six months ended
                                                                            June 30,
                                                                    --------------------------
                                                                       1997           1996
                                                                    -----------    -----------

<S>                                                                <C>            <C>        
NET CASH PROVIDED BY OPERATING ACTIVITIES                           $ 5,855,778    $ 8,289,716
                                                                    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases from affiliate of equipment on operating leases                   -       (496,235)
  Investment in direct finance leases, acquired from affiliate                -        (11,945)
                                                                    -----------    -----------

Net cash used in investing activities                                         -       (508,180)
                                                                    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments on financed operating lease rentals               (232,463)      (152,376)
  Principal payments on discounted lease rentals                     (1,372,128)    (2,848,810)
  Distributions to partners                                          (5,287,568)    (4,622,570)
  Redemptions of limited partner units                                  (15,669)       (89,538)
                                                                    -----------    -----------

Net cash used in financing activities                                (6,907,828)    (7,713,294)
                                                                    -----------    -----------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                 (1,052,050)        68,242

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                      2,672,112      4,492,487
                                                                    -----------    -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                          $ 1,620,062    $ 4,560,729
                                                                    ===========    ===========

Supplemental disclosure of cash flow information:
  Interest paid on discounted lease rentals                         $   125,223    $   300,349
  Interest paid on financed operating lease rentals                      26,662         56,955



</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                        5

<PAGE>


                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

1.   Basis of Presentation
     ---------------------

     The  accompanying  unaudited  financial  statements  have been  prepared in
     accordance  with  generally  accepted  accounting  principles  for  interim
     financial  information and the  instructions to Form 10-Q and Rule 10-01 of
     Regulation S-X. Accordingly, they do not include all of the information and
     disclosures required by generally accepted accounting principles for annual
     financial   statements.   In  the  opinion  of  the  general  partner,  all
     adjustments  (consisting only of normal recurring  adjustments)  considered
     necessary for a fair presentation have been included.  The balance sheet at
     December 31, 1996 has been derived  from the audited  financial  statements
     included in the Partnership's 10-K. For further  information,  refer to the
     financial  statements of Capital Preferred Yield Fund, A California Limited
     Partnership  (the  "Partnership"),  and the related notes,  included in the
     Partnership's  Annual  Report on Form 10-K for the year ended  December 31,
     1996, previously filed with the Securities and Exchange Commission.



                                        6

<PAGE>



                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

Results of Operations
---------------------

Presented below are schedules  (prepared  solely to facilitate the discussion of
results of  operations  that  follows)  showing  condensed  statements of income
categories and analyses of changes in those  condensed  categories  derived from
the Statements of Income.

<TABLE>
<CAPTION>


                                                Condensed Statements                          Condensed Statements
                                                   of Income for           The effect on         of Income for         The effect on
                                                  the three months           net income          the six months          net income
                                                   ended June 30,            of changes          ended June 30,          of changes
                                             --------------------------       between      --------------------------     between 
                                                 1997          1996           periods         1997          1996          periods
                                             ------------  ------------    -------------   ------------  ------------  -------------

<S>                                         <C>            <C>            <C>             <C>            <C>           <C>         
Leasing margin                               $   866,465    $   884,448    $   (17,983)    $ 1,586,214    $ 1,604,505   $   (18,291)
Equipment sales margin                           110,068        222,562       (112,494)        237,562        392,099      (154,537)
Interest income                                   22,102         49,853        (27,751)         42,170        102,040       (59,870)
Management fees paid to general partner         (112,996)      (169,630)        56,634        (226,100)      (351,770)      125,670
Direct services from general partner             (39,058)      (30, 601)        (8,457)        (84,149)       (56,324)      (27,825)
General and administrative                       (96,233)      (234,432)       138,199        (162,142)      (298,156)      136,014
Provision for losses                            (100,000)      (430,000)       330,000        (225,000)      (805,000)      580,000
                                             -----------    -----------    -----------     -----------    -----------   -----------
Net income                                   $   650,348    $   292,200    $   358,148     $ 1,168,555    $   587,394   $   581,161
                                             ===========    ===========    ===========     ===========    ===========   ===========

</TABLE>

The  Partnership  is in its  liquidation  period as defined  in the  Partnership
Agreement  and,  as  expected,  the  Partnership  is not  purchasing  additional
equipment,  initial  leases are expiring and the  equipment is being  remarketed
(i.e.,  re-leased,  renewed,  or  sold).  As a  result,  both  the  size  of the
Partnership's  leasing portfolio and the amount of leasing revenue are declining
(referred to in this discussion as "portfolio runoff").

LEASING MARGIN

Leasing margin consists of the following:

<TABLE>
<CAPTION>

                                                   Three months ended                   Six months ended
                                                       June 30,                             June 30,
                                             ------------------------------      ------------------------------
                                                 1997              1996              1997              1996
                                             ------------      ------------      ------------      ------------ 

<S>                                         <C>               <C>               <C>               <C>        
Operating lease rentals                      $ 1,606,275       $ 2,339,550       $ 3,168,487       $ 4,885,955
Direct financing lease income                    264,957           301,665           514,379           556,090
Depreciation and amortization                   (936,231)       (1,591,957)       (1,944,767)       (3,480,236)
Interest expense on related financed
operating lease rentals                          (13,505)          (27,785)          (26,662)          (56,955)
Interest expense on related discounted
lease rentals                                    (55,031)         (137,025)         (125,223)         (300,349)
                                             -----------       -----------       -----------       -----------
Leasing margin                               $   866,465       $   884,448       $ 1,586,214       $ 1,604,505
                                             ===========       ===========       ===========       ===========

Leasing margin ratio                                  46%               33%               43%               29%
                                             ===========       ===========       ===========       ===========

</TABLE>

                                        7

<PAGE>


                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations, continued


Results of Operations, continued
---------------------

LEASING MARGIN, continued

The  components  of leasing  margin have  declined  and are  expected to decline
further due to portfolio run-off.  Leasing margin ratio increased  primarily due
to (i) remarketing  activities,  and (ii) because a portion of the Partnership's
portfolio   consists  of  operating  leases  financed  with   non-recourse  debt
(including both discounted lease rentals and financed  operating lease rentals).
Leasing  margin and the related  leasing  margin  ratio for an  operating  lease
financed with  non-recourse  debt  increases  during the term of the lease since
rents and  depreciation  are typically fixed while interest  expense declines as
the related non-recourse debt is repaid.

The ultimate rate of return on leases depends,  in part, on the general level of
interest  rates  at the  time  the  leases  are  originated,  as well as  future
equipment  values and on-going  lessee  creditworthiness.  Because leasing is an
alternative to financing equipment purchases with debt, lease rates tend to rise
and fall with  interest  rates  (although  lease rate  movements  generally  lag
interest rate changes in the capital markets). Interest rates declined from 1990
until the early part of 1994.  The lease  rates on  equipment  purchased  by the
Partnership during this period reflect this low interest rate environment.  This
will result in  corresponding  reductions in the ultimate  overall yields to the
partners.  Annual average 5-year U.S.  Treasury  yields for the past seven years
were as follows:

Annual average 5-year U.S. Treasury Yield

         Year                               Yield
         ----                               -----

         1990                                8.37
         1991                                7.37
         1992                                6.19
         1993                                5.14
         1994                                6.69
         1995                                6.53
         1996                                6.18


                                        8

<PAGE>


                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations, continued

Results of Operations, continued
---------------------

EQUIPMENT SALES MARGIN

Equipment sales margin consists of the following:

                              Three months ended           Six months ended
                                   June 30,                    June 30,
                          --------------------------  --------------------------
                             1997         1996            1997          1996
                          -----------  ------------   ------------  ------------

Equipment sales revenue   $  220,845   $ 1,326,693    $ 1,478,046   $ 1,897,769
Cost of equipment sales     (110,777)   (1,104,131)    (1,240,484)   (1,505,670)
                          ----------   -----------    -----------   -----------

 Equipment sales margin   $  110,068   $   222,562    $   237,562   $   392,099
                          ==========   ===========    ===========   ===========

The Partnership is in it's liquidation period. During the liquidation period, as
initial leases terminate,  the equipment is being remarketed (i.e., re-leased or
sold to either the  original  lessee or a third  party)  and,  accordingly,  the
timing and amount of equipment sales cannot be projected accurately.

INTEREST INCOME

Interest income  decreased due to a decrease in cash available for investment as
the Partnership is in liquidation and therefore  distributing excess cash to the
limited partners.

PROVISION FOR LOSSES

The  remarketing  of  equipment  for an amount  greater  than its book  value is
reported as equipment  sales margin (if the equipment is sold) or leasing margin
(if the equipment is re-leased). The realization of less than the carrying value
of equipment (which is typically not known until  remarketing  subsequent to the
initial lease termination has occurred) is recorded as provision for losses.

Residual values are established equal to the estimated value to be received from
the equipment following termination of the lease. In estimating such values, the
Partnership considers all relevant facts regarding the equipment and the lessee,
including,  for  example,  the  likelihood  that the lessee  will  re-lease  the
equipment.  The nature of the  Partnership's  leasing  activities is that it has
credit  exposure and residual value exposure and,  accordingly,  in the ordinary
course of business,  it will incur losses from those exposures.  The Partnership
performs   ongoing   quarterly   assessments   of   its   assets   to   identify
other-than-temporary losses.



                                        9

<PAGE>


                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations, continued

Results of Operations, continued
---------------------

PROVISION FOR LOSSES, continued

The  provision  for losses  recorded  for the six months ended June 30, 1997 was
primarily  related  to  lessees  returning  equipment  to the  Partnership.  The
Partnership  had  previously  expected  to realize  the  carrying  value of this
equipment  through lease renewals and proceeds from the sale of the equipment to
the original lessees.  The fair market value of the equipment  re-leased or sold
to a third party was less than anticipated.

The provision for losses  recorded during the six months ended June 30, 1996 was
primarily related to the following:

-   $320,000 related to bankrupt lessees,

-   $150,000 related to a lessee returning an aircraft to the Partnership,

-   $130,000  related to  equipment under lease returned to the Partnership by a
    lessee experiencing severe financial difficulties,

-   $95,000  related to lessees returning modular buildings, computer equipment,
    a telephone system and hospital equipment to the Partnership,

-   $110,000  related to  the sale of equipment having a lower fair market value
    than originally anticipated.

The  Partnership  had previously  expected to realize the carrying value of this
equipment  through lease renewals and proceeds from sale of the equipment to the
original lessee.  The fair market value of the equipment  re-leased or sold to a
third party was considerably less than anticipated.

EXPENSES

Management fees paid to the general partner  decreased  primarily as a result of
portfolio run-off.

Direct   services  from  the  general   partner   increased   primarily  due  to
administrative  costs  incurred by the  general  partner in the  remarketing  of
warehoused equipment.  General and administrative expenses for the three and six
months ended June 30, 1996 included  $104,027  reimbursed to the general partner
for insurance costs related to prior years.

Liquidity and Capital Resources
-------------------------------

The Partnership funds its operating activities principally with cash from rents,
non-recourse debt, interest income and sales of off-lease  equipment.  Available
cash and cash reserves of the Partnership are invested in interest  bearing cash
accounts and short-term U.S. Government  securities pending distributions to the
partners.

                                       10

<PAGE>


                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations, continued

Liquidity and Capital Resources, continued
-------------------------------

During  the  three  months  ended  June  30,  1997,  the  Partnership   declared
distributions  to the partners of $2,484,102  ($873,108 of which was paid during
July 1997). A substantial portion of such distributions  constituted a return of
capital for accounting  purposes.  Distributions  may be characterized  for tax,
accounting and economic purposes as a return of capital,  a return on capital or
both. The portion of each cash  distribution by a partnership  which exceeds its
net income for the fiscal period may be deemed a return of capital. However, the
total percentage of a partnership's return on capital over it's life can only be
determined  after all  residual  cash flows  (which  include  proceeds  from the
re-leasing and sale of equipment after the initial lease terms expire) have been
realized at the termination of the Partnership.

The general  partners  currently  anticipate that the Partnership  will generate
cash flow from  operations  and  equipment  sales  during the  remainder of 1997
which,  when  added  to cash  and  cash  equivalents  on  hand,  should  provide
sufficient  cash to  enable  the  Partnership  to  meet  its  current  operating
requirements.

The Partnership  anticipates that it will fund the remaining 1997  distributions
to the  limited  partners  (a  substantial  portion  of  which  is  expected  to
constitute  returns  of  capital  for  accounting  purposes)  out of  cash  from
operations  and cash  from  sales  during  the  remainder  of 1997.  Because  of
portfolio  runoff,  it is  anticipated  that cash from  operations  in 1997 will
decrease relative to cash from operations in 1996. Therefore, the Partnership is
not  expected  to have  sufficient  cash  available  in 1997 to fully  fund cash
distributions  to the Class A limited  partners at annualized  rates of 13% (see
discussion  below).  The Partnership is in its liquidation period (as defined in
the Partnership  Agreement) and distributions during the liquidation period will
be based upon cash availability and will vary and all distributions are expected
bo be a return of capital for economic purposes.

The Class B distributions  of cash from operations are subordinated to the Class
A limited partners receiving distributions of cash from operations, as scheduled
in the Partnership Agreement (i.e., 13%). Therefore,  because of the anticipated
decrease in distributions to the Class A limited partners,  CAII, the sole Class
B limited partner, will cease receiving distributions of cash from operations at
some point during 1997. The general partners currently anticipate that CAII will
receive total future Class B  distributions  equal to  approximately  25% of the
Class B limited partner's capital shown on the accompanying Balance Sheets.

                                       11

<PAGE>



                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

                                    PART II.

                                OTHER INFORMATION


Item 1.   Legal Proceedings

          The Partnership is involved in routine legal proceedings incidental to
          the conduct of its  business.  The general  partner  believes  none of
          these legal  proceedings  will have a material  adverse  effect on the
          financial condition or operations of the Partnership.


Item 6.   Exhibits and Reports on Form 8-K

          (a)  None

          (b)  The  Partnership  did not file any reports on Form 8-K during the
               three months ended June 30, 1997

                                       12

<PAGE>



                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

                                    Signature



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




                                    CAPITAL PREFERRED YIELD FUND

                                    A California Limited Partnership

                                    By:      CAI Partners Management Company


Dated:  August 12, 1997             By:      /s/Anthony M. DiPaolo
                                             ---------------------
                                             Anthony M. DiPaolo
                                             Senior Vice President


                                       13