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               September 30, 1998
                               -------------------------------------------------

                                       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 14

                               Page 1 of 15 Pages



<PAGE>



                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

                          Quarterly Report on Form 10-Q
                              For the Quarter Ended
                               September 30, 1998


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


PART I.         FINANCIAL INFORMATION                                       PAGE
                                                                            ----
     Item 1.    Financial Statements (Unaudited)

                Balance Sheets-September 30, 1998 and December 31, 1997      3

                Statements of Income - Three and Nine Months Ended
                September 30, 1998 and 1997                                  4

                Statements of Cash Flows - Nine Months Ended
                September 30, 1998 and 1997                                  5

                Notes to Financial Statements                               6-7

     Item 2.    Management's Discussion and Analysis of Financial
                Condition and Results of Operations                         8-12


PART II.        OTHER INFORMATION


     Item 1.    Legal Proceedings                                           13

     Item 6.    Exhibits and Reports on Form 8-K                            13

                Exhibit Index                                               14

                Signature                                                   15

                                        2

<PAGE>



                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

                                 BALANCE SHEETS


                                     ASSETS

                                                    September 30,   December 31,
                                                        1998            1997
                                                    -------------   ------------
                                                     (Unaudited)

Cash and cash equivalents                           $ 3,162,768      $ 2,839,510
Accounts receivable, net                              1,477,579        7,059,347
Equipment held for sale or re-lease                     152,921          887,865
Net investment in direct finance leases                  72,188          229,696
Leased equipment, net                                     6,386        1,074,600
                                                    -----------      -----------

Total assets                                        $ 4,871,842      $12,091,018
                                                    ===========      ===========

                       LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
     Payables to affiliates                         $     7,315      $    44,916
     Accounts payable and accrued liabilities           600,558          905,979
     Rents received in advance                           92,892          162,931
     Distributions payable to partners                3,439,438        1,241,334
     Financed operating lease rentals                         -        1,131,105
                                                    -----------      -----------

Total liabilities                                     4,140,203        3,486,265
                                                    -----------      -----------

Partners' capital:
     General partner                                          -                -
     Limited partners:
         Class A                                              -        6,439,272
         Class B                                        731,639        2,165,481
                                                    -----------      -----------

Total partners' capital                                 731,639        8,604,753
                                                    -----------      -----------

Total liabilities and partners' capital             $ 4,871,842      $12,091,018
                                                    ===========      ===========


   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               Nine Months Ended
                                                          September 30,                   September 30,          
                                                  ------------------------------    --------------------------
                                                     1998               1997           1998           1997     
                                                  -----------        -----------    -----------    -----------
<S>                                              <C>                <C>            <C>            <C>        
REVENUE:
  Operating lease rentals                         $   277,352        $ 1,301,572    $   439,242    $ 4,470,059
  Direct finance lease income                           2,282            237,433        106,590        751,812
  Equipment sales margin                              212,652             58,711        770,658        296,273
  Interest income                                      27,061             11,474         61,532         53,644
                                                  -----------        -----------    -----------    -----------
     Total revenue                                    519,347          1,609,190      1,378,022      5,571,788
                                                  -----------        -----------    -----------    -----------

EXPENSES:
  Depreciation                                         82,179            805,863        210,962      2,750,630
  Management fees to general partner                   13,362            104,357         31,876        330,457
  Direct services from general partner                 11,647             31,220         70,286        115,369
  Interest on discounted lease rentals                      -             40,895             28        166,118
  Interest on financed operating lease rentals         13,717             11,597         40,754         38,259
  General and administrative                           35,444             51,551        216,020        213,693
  Provision for losses                                 25,000             25,000        500,000        250,000
                                                  -----------        -----------    -----------    -----------
     Total expenses                                   181,349          1,070,483      1,069,926      3,864,526
                                                  -----------        -----------    -----------    -----------

NET INCOME                                        $   337,998        $   538,707    $   308,096    $ 1,707,262
                                                  ===========        ===========    ===========    ===========

NET INCOME ALLOCATED:
  To the general partner                          $   190,190        $    68,905    $   368,124    $   286,858
  To the Class A limited partners                     137,412            436,789        (55,832)     1,320,591
  To the Class B limited partner                       10,396             33,013         (4,196)        99,813
                                                  -----------        -----------    -----------    -----------

                                                  $   337,998        $   538,707    $   308,096    $ 1,707,262
                                                  ===========        ===========    ===========    ===========
  Net income (loss) per weighted average
     Class A limited partner units outstanding    $       .55        $      1.74    $     (0.22)   $      5.25
                                                  ===========        ===========    ===========    ===========

  Weighted average Class A limited
      partner unit outstanding                        251,376            251,507        251,384        251,609
                                                  ===========        ==========     ===========    ===========
</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>

                                                                        Nine Months Ended
                                                                           September 30,
                                                                   ----------------------------
                                                                      1998              1997       
                                                                   -----------      -----------

<S>                                                               <C>              <C>        
NET CASH PROVIDED BY OPERATING ACTIVITIES                          $ 7,437,467      $ 7,791,920
                                                                   -----------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments on financed operating lease rentals            (1,123,270)        (245,988)
  Principal payments on discounted lease rentals                        (7,835)      (2,035,405)
  Distributions to partners                                         (5,982,405)      (7,221,208)
  Redemptions of limited partner units                                    (699)         (23,868)
                                                                   -----------      -----------

Net cash used in financing activities                               (7,114,209)      (9,526,469)
                                                                   -----------      -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                   323,258       (1,734,549)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                     2,839,510        2,672,112
                                                                   -----------      -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                         $ 3,162,768      $   937,563
                                                                   ===========      ===========

Supplemental disclosure of cash flow information:
  Interest paid on discounted lease rentals                        $        28      $   166,118
  Interest paid on financed operating lease rentals                     40,754           38,259

</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, 1997 was derived  from the audited  financial  statements  as
     restated included in the  Partnership's  10-K/A.  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,  1997,  previously  filed with the  Securities  and  Exchange
     Commission.

     The Partnership is in its liquidation  period as defined in the Partnership
     Agreement.  During  the  liquidation  period,  the  Partnership  no  longer
     acquires new leases and the existing  lease  portfolio is in the process of
     running-off.  As  of  September  30,  1998,  the  Partnership  had  sold  a
     substantial  portion of its assets. The General Partner expects to sell the
     remaining  assets by December 31, 1998 and finalize the  liquidation of the
     Partnership.

     RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS

     In June 1997, the Financial  Accounting Standards Board issued Statement of
     Financial  Accounting  Standards No. 130,  Reporting  Comprehensive  Income
     ("Statement  130"),  which  requires  comprehensive  income to be displayed
     prominently  within  the  financial  statements.  Comprehensive  income  is
     defined  as  all  recognized   changes  in  equity  during  a  period  from
     transactions and other events and circumstances except those resulting from
     investments  by owners and  distributions  to owners.  Net income and items
     that  previously  have been  recorded  directly  in equity are  included in
     comprehensive  income.   Statement  130  affects  only  the  reporting  and
     disclosure  of  comprehensive  income  but does not affect  recognition  or
     measurement  of  income.  Statement  130  is  effective  for  fiscal  years
     beginning after December 15, 1997, with earlier application permitted.  The
     Partnership  adopted  Statement  130 in the  first  quarter  of  1998.  The
     adoption did not have an impact on its financial reporting.

     In June 1997, the Financial  Accounting Standards Board issued Statement of
     Financial  Accounting  Standards No. 131,  Disclosures about Segments of an
     Enterprise  and  Related  Information   ("Statement  131").  Statement  131
     provides  guidance for reporting  information  about operating  segments in
     annual financial  statements and requires reporting of selected information
     about operating  segments in interim financial reports of public companies.
     An operating  segment is defined as a component of a business  that engages
     in business activities from which it may earn revenue and incur expenses, a
     component

                                        6

<PAGE>


                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

1.   Basis of Presentation, continued
     ---------------------

     RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS, continued

     whose  operating  results are  regularly  reviewed by the  company's  chief
     operating  decision  maker,  and a component for which  discrete  financial
     information is available. Statement 131 establishes quantitative thresholds
     for determining operating segments of a company. Statement 131 is effective
     for  fiscal  years   beginning   after  December  15,  1997,  with  earlier
     application  permitted.  The Partnership adopted Statement 131 in the first
     quarter  of 1998.  The  adoption  did not have an impact  on its  financial
     reporting.

2.   Transactions With the General Partner and Affiliate
     ---------------------------------------------------

     DIRECT SERVICES FROM GENERAL PARTNER

     The  general  partner  and  an  affiliate  provide   accounting,   investor
     relations,  billing, collecting, asset management, and other administrative
     services to the Partnership. The Partnership reimburses the general partner
     for these services  performed on its behalf as permitted under the terms of
     the Partnership Agreement.  At September 30, 1998, direct services from the
     General Partner of $6,277 are included in payable to affiliates.

     MANAGEMENT FEES TO GENERAL PARTNER

     In accordance with the Partnership  Agreement,  the General Partner earns a
     management  fee  in  connection  with  its  management  of  the  equipment,
     calculated as a percentage of the monthly gross rentals received,  and paid
     monthly in arrears.  At September 30, 1998,  management  fees of $1,038 are
     included in payables to affiliates.

     GENERAL AND ADMINISTRATIVE EXPENSES

     The General  Partner and an affiliate are reimbursed for the actual cost of
     administrative  expenses paid on behalf of the Partnership per the terms of
     the Partnership Agreement.





                                        7

<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 Nine Months         Net Income
                                          Ended September 30,       of Changes        Ended September 30,       of Changes
                                      --------------------------     Between      -------------------------      Between
                                          1998          1997         Periods         1998         1997           Periods
                                      ------------   -----------   -------------  -----------  ------------   -------------

<S>                                  <C>            <C>            <C>           <C>          <C>            <C>          
Leasing margin                        $ 183,738      $  680,650     $ (496,912)   $  294,088   $ 2,266,864    $ (1,972,776)
Equipment sales margin                  212,652          58,711        153,941       770,658       296,273         474,385
Interest income                          27,061          11,474         15,587        61,532        53,644           7,888
Management fees to general partner      (13,362)       (104,357)        90,995       (31,876)     (330,457)        298,581
Direct services from general partner    (11,647)        (31,220)        19,573       (70,286)     (115,369)         45,083
General and administrative              (35,444)        (51,551)        16,107      (216,020)     (213,693)         (2,327)
Provision for losses                    (25,000)        (25,000)             -      (500,000)     (250,000)       (250,000)
                                      ---------      ----------     ----------    ----------   -----------    ------------
Net income (loss)                     $ 337,998      $  538,707     $ (200,709)   $  308,096   $ 1,707,262    $ (1,399,166)
                                      =========      ==========     ==========    ==========   ===========    ============

</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  amount of  equipment  being
remarketed (i.e., re-leased,  renewed, or sold) will increase. As a result, both
the size of the  Partnership's  leasing  portfolio  and the  amount  of  leasing
revenue are declining.

LEASING MARGIN

Leasing margin consists of the following:

<TABLE>
<CAPTION>

                                     Three Months Ended                Nine Months Ended
                                        September 30,                    September 30,            
                                   ------------------------      ---------------------------
                                     1998           1997             1998            1997 
                                   ---------    -----------      -----------     -----------

<S>                               <C>          <C>              <C>             <C>        
Operating lease rentals            $ 277,352    $ 1,301,572      $   439,242     $ 4,470,059
Direct financing lease income          2,282        237,433          106,590         751,812
Depreciation                         (82,179)      (805,863)        (210,962)     (2,750,630)
Interest expense                     (13,717)       (52,492)         (40,782)       (204,377)
                                   ---------    -----------      -----------     -----------
   Leasing margin                  $ 183,738    $   680,650      $   294,088     $ 2,266,864
                                   =========    ===========      ===========     ===========

       Leasing margin ratio               66%            38%              54%             43%
                                   =========    ===========      ===========     ===========

</TABLE>


                                        8

<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, continued
---------------------

LEASING MARGIN, continued

The  components  of leasing  margin have  declined  and are  expected to decline
further due to  portfolio  run- off, as the  partnership  is in the  liquidation
stage.

The ultimate rate of return on leases depends, in part, on 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).

EQUIPMENT SALES MARGIN

Equipment sales margin consists of the following:

                               Three Months Ended         Nine Months Ended
                                 September 30,               September 30,
                           -------------------------  -------------------------
                              1998          1997         1998          1997 
                           -----------   -----------  -----------   -----------

Equipment sales revenue    $   793,995   $  147,188   $ 2,032,891   $ 1,625,234
Cost of equipment sales       (581,343)     (88,477)   (1,262,233)   (1,328,961)
                           -----------   ----------   -----------   -----------

   Equipment sales margin  $   212,652   $   58,711   $   770,658   $   296,273
                           ===========   ==========   ===========   ===========

Equipment  sales margin  increased for the three and ine months ended September
30,  1998  reflecting  the  efforts  of the  General  Partner  to  finalize  the
liquidation of the Partnership.

INTEREST INCOME

Interest income increased due to an increase in cash available for investment.

PROVISION FOR LOSSES

The  remarketing  of  equipment  for an amount  greater  than its book  value is
reported  with  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.




                                        9

<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, continued
---------------------

PROVISION FOR LOSSES, continued

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 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.

The provision for losses  recorded for the nine months ended  September 30, 1998
and  1997  was  primarily  related  to  lessees   returning   equipment  to  the
Partnership.  For the nine months  ended  September  30, 1998,  the  Partnership
recorded a loss of $425,000 on mining and  transportation  equipment  and office
furniture and fixtures held for sale or re-lease. The Partnership had previously
expected to realize the carrying value of this equipment  through  proceeds from
the sales of  equipment to the  original  lessees.  The fair market value of the
equipment was less than anticipated.

EXPENSES

The  increase in general and  administrative  expenses for the nine months ended
September  30, 1998  compared to the nine months  ended  September  30, 1997 was
primarily due to an increase in non-resident  withholding tax for 1997, paid and
expensed on behalf of the limited partners during the second quarter of 1998.

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.

During the three  months ended  September  30, 1998,  the  Partnership  declared
distributions to the partners of $4,226,443 ($2,814,544 of which was paid during
October 1998). A 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  its life can only be
determined  after all  residual  cash flows  (which  include  proceeds  from the
re-leasing  and sales of equipment  after  initial lease terms expire) have been
realized  at the  termination  of the  Partnership.  The  Partnership  is in its
liquidation  period (as defined in the Partnership  Agreement) and distributions
during  the  liquidation  period  will vary based  upon cash  availability.  All
distributions are expected to be a return of capital for economic purposes.

                                       10

<PAGE>


                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

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

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

The General Partner  currently  anticipates  that the Partnership  will generate
cash flow from  operations  and  equipment  sales  during the  remainder of 1998
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  Class  B  limited  partner   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%).
Cumulative  Class B  distributions  accrued  since August 1997, in the amount of
$710,813 were paid in October 1998 due to the receipt of proceeds on the sale of
certain equipment.

YEAR 2000 ISSUES

An affiliate provides accounting and other  administrative  services,  including
data  processing  services to the  Partnership.  The  affiliate  has conducted a
comprehensive  review of its computer  systems to identify systems that could be
affected  by the Year 2000  issue.  The Year 2000 issue  results  from  computer
programs  being  written  using  two  digits  rather  than  four to  define  the
applicable year.  Certain computer programs which have  time-sensitive  software
could  recognize  a date using "00" as the year 1900  rather than the year 2000.
This could result in major system  failures or  miscalculations.  Certain of the
affiliate's  software has already been updated to correctly account for the Year
2000  issue.  In  addition,  the  affiliate  is engaged in a system  conversion,
whereby the affiliate's  primary lease tracking and accounting software is being
replaced  with new systems which will account for the Year 2000  correctly.  The
affiliate  expects that the new system will be fully operational by December 31,
1999,  and therefore will be fully Year 2000  compliant.  The affiliate does not
expect any other changes required for the Year 2000 to have a material effect on
its financial position or results of operations.  As such, the affiliate has not
developed any specific  contingency  plans in the event it fails to complete the
conversion to a new system by December 31, 1999. In addition, the affiliate does
not expect any Year 2000 issues  relating to its customers and vendors to have a
material effect on its financial position or results of operations.


New Accounting Pronouncements
-----------------------------

In June 1998,  the  Financial  Accounting  Standards  Board issued SFAS No. 133,
Accounting for Derivative  Instruments and Hedging Activities ("Statement 133").
Statement 133  establishes  accounting  and reporting  standards for  derivative
instruments and for hedging activities. It requires that an entity recognize all
derivatives  as either  assets or  liabilities  in the  statement  of  financial
position and measure those instruments at fair value. Statement 133 is effective
for  fiscal  years  beginning  after June 15,  1999,  with  earlier  application
permitted.

The  Partnership  will adopt  Statement  133 in the first  quarter of 1999.  The
General  Partner does not expect the adoption to have an impact on its financial
reporting.

                                       11

<PAGE>


                          CAPITAL PREFERRED YIELD FUND
                        A California Limited Partnership

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

"Safe Harbor"  Statement Under the Private  Securities  Litigation Reform Act of
--------------------------------------------------------------------------------
1995
----

The statements  contained in this report which are not  historical  facts may be
deemed to contain  forward-  looking  statements  with  respect  to events,  the
occurrence of which involve risks and uncertainties,  and are subject to factors
that could cause actual future  results to differ both  adversely and materially
from currently anticipated results, including,  without limitation, the level of
lease originations, realization of residual values, the availability and cost of
financing  sources and the ultimate  outcome of any contract  disputes.  Certain
specific risks associated with particular aspects of the Partnership's  business
are  discussed  under  Results of Operations in this report and under Results of
Operations in the 1997 Form 10-K when and where applicable.


                                       12

<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)  Exhibits

         (b)  The  Partnership did not file any  reports on Form 8-K during  the
              three months ended September 30, 1998



                                       13

<PAGE>



Item No.                           Exhibit Index

     27        Financial Data Schedule



                                       14

<PAGE>



                                    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:  November 13, 1998             By:  /s/Anthony M. DiPaolo
                                           --------------------------------
                                           Anthony M. DiPaolo
                                           Senior Vice President


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