U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549

                                   FORM 10-QSB


(Mark One)

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


         For the quarterly period ended              September 30, 1998


[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT




For the transition period from __________________ to __________________


                        Commission file number 000-21470


                                 N' TANDEM TRUST
        (Exact name of small business issuer as specified in its charter)


                 California                               33-6109499
_____________________________________________         ___________________
(State or other jurisdiction of incorporation           (IRS Employer
 or organization                                      Identification No.)


                6430 S. Quebec Street, Englewood, Colorado 80111
                    (Address of principal executive offices)


                                 (303) 741-3707
                           (Issuer's telephone number)




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

<PAGE>

                                TABLE OF CONTENTS

                         PART I - Financial Information




Item 1.           Financial Statements                                   3

Item 2.           Management's Discussion and analysis of Financial 
                  Condition and Results of Operations                   11

                           PART II - Other Information

Item 2.           Changes in Securities and use of Proceeds             15

Item 4.           Submission of Matters to a Vote of Security Holders   15

Item 6.           Exhibits and Reports on Form 8-K                      16

                  SIGNATURE                                             17


                                        2
<PAGE>



                                 N' TANDEM TRUST
                                  BALANCE SHEET
                                   (unaudited)

                                                       September 30,1998
                                                -------------------------------
ASSETS
Property held for investment:
   Land                                         $                    3,501,300
   Buildings and improvements                                        6,869,000
   Fixtures and equipment                                               70,300
                                                -------------------------------
                                                                    10,440,600
Less accumulated depreciation                                         (924,600)
                                                -------------------------------
                                                                     9,516,000

Investments in joint ventures and limited partnerships                 816,400
Cash and cash equivalents                                               95,300
Deferred financing costs                                                45,100
Other assets                                                           317,400
                                                ------------------------------
Total Assets
                                                $                   10,790,200
                                                ==============================

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
   Debt                                         $                    7,051,500
   Accounts payable                                                     15,300
   Accrued expenses                                                    442,700
   Tenant deposits and other liabilities                                44,100
   Due to Advisor and affiliates                                       408,400
                                                ------------------------------
                                                                     7,962,000
Shareholders' equity:
   Preferred shares of beneficial interest, 
   no par value, unlimited          
   shares authorized; 98,073 
   shares issued and outstanding                                     2,121,700

   Common shares of beneficial interest, 
   no par value, unlimited                                          
   Shares authorized; 109,308 shares 
   issued and outstanding                                            2,401,400

    Cumulative net loss                                               (296,100)
    Cumulative distributions                                        (1,398,800)
                                                -------------------------------

                                                                     2,828,200
                                                -------------------------------

Total Liabilities and Shareholders' Equity      $                   10,790,200
                                                ===============================

                 See Accompanying Notes to Financial Statements


                                     3
<PAGE>

<TABLE>
<CAPTION>


                                 N' TANDEM TRUST
                            STATEMENTS OF OPERATIONS
                                   (unaudited)

                                                                       Three Months Ended September 30
                                                               ----------------------------------------------------

                                                                         1998                     1997
                                                               ------------------------  -----------------------
<S>                                                                       <C>                       <C>    

REVENUES

Rent and utilities                                              $              465,800   $              222,000
Equity in earnings (loses) of joint ventures and limited                        (5,100)                  (8,500)
   Partnerships
Interest                                                                           600                    1,500
Other                                                                            5,700                    2,300
                                                               ------------------------  -----------------------

                                                                               467,000                  217,300
                                                               ------------------------  -----------------------

COSTS AND EXPENSES

Property operating                                                             251,000                  107,400
Interest                                                                       163,900                   47,700
Depreciation                                                                   109,500                   40,800
Advisory fee                                                                    39,100                    8,700
General and administrative:
   Related parties                                                               7,600                    6,600
   Other                                                                        25,900                    7,300
                                                               ------------------------  -----------------------

                                                                               597,000                  218,500
                                                               ------------------------  -----------------------

Net loss                                                        $             (130,000)   $              (1,200)
                                                               ========================  =======================

Preferred Dividends Paid                                                       (36,800)                 (36,800)
                                                               ========================  =======================

Net loss attributable to Common Shares                          $             (166,800)   $             (38,000)
                                                               ========================  =======================

Basic and dilutive loss per Common Share                        $                (1.53)   $               (0.42)
                                                               ========================  =======================

Dividends per Common Share                                      $                 0.31   $                 0.37
                                                               ========================  =======================


</TABLE>


                 See Accompanying Notes to Financial Statements

                                        4

<PAGE>

<TABLE>
<CAPTION>

                                 N' TANDEM TRUST
                            STATEMENTS OF OPERATIONS
                                   (unaudited)


                                                                        Nine Months Ended September 30
                                                               -------------------------------------------------

                                                                         1998                     1997
                                                               ------------------------  -----------------------
<S>                                                                       <C>                     <C>    
REVENUES
Rent and utilities                                              $            1,146,000   $              735,300
Equity in earnings (loses) of joint ventures and limited                       (22,100)                 (22,300)
   Partnerships
Interest                                                                         1,400                    4,500
Other                                                                           13,300                    9,000
                                                               ------------------------  -----------------------
                                                                             1,138,600                  726,500
                                                               ------------------------  -----------------------

COSTS AND EXPENSES
Property operating                                                             552,700                  351,900
Interest                                                                       387,000                  179,500
Depreciation                                                                   259,900                  122,300
Advisory fee                                                                   102,900                   37,500
General and administrative:
   Related parties                                                              19,000                   26,600
   Other                                                                        48,200                   26,800
                                                               ------------------------  -----------------------

                                                                             1,369,700                  744,600
                                                               ------------------------  -----------------------

Net loss                                                        $             (231,100)   $             (18,100)
                                                               ========================  =======================

Preferred Dividends Paid                                                      (110,400)                (110,400)
                                                               ========================  =======================

Net loss attributable to Common Shares                          $             (341,500)   $            (128,500)
                                                               ========================  =======================

Basic and dilutive loss per Common Share                        $                (3.31)   $               (1.25)
                                                               ========================  =======================

Dividends per Common Share                                      $                 0.93   $                 1.12
                                                               ========================  =======================


</TABLE>


                 See Accompanying Notes to Financial Statements

                                        5
<PAGE>

<TABLE>
<CAPTION>

                                 N' TANDEM TRUST
                            STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                                                           Nine Months Ended September 30
                                                                    ---------------------------------------------
                                                                             1998                   1997
                                                                    ----------------------  ---------------------
<S>                                                                          <C>                     <C>   
Cash flows from operating activities:
 Net loss                                                            $           (231,100)     $         (18,100)
 Adjustments to reconcile net loss to net cash
 Provided by operating activities:
    Depreciation                                                                  259,900                122,300
    Proportionate   share   of   losses   of  joint   ventures   and               22,100                 22,300
limited       partnerships
    Joint ventures' and limited partnerships cash distributions                   (22,100)                      
    Amortization of deferred financing costs                                        8,100                 10,200
    Loss on sale of property                                                            0                  3,000

  Changes in operating assets and liabilities:
    (Increase) decrease in other assets                                          (215,600)                23,600
    (Increase) decrease in accounts payable                                         9,500                (11,800)
    Increase in accrued expenses                                                  409,500                  7,400 
    Increase (decrease) in tenant deposits and other liabilities                   44,100                (19,700)
    Increase (decrease) in Due to Advisor and affiliates                          114,600                (59,900)
                                                                    ----------------------  ---------------------

Net cash provided by operating activities                                         399,000                 79,300
                                                                    ----------------------  ---------------------

Cash flows from investing activities:
  Proceeds from sale of property                                                        0                392,900
  Acquisition of property held for investment                                  (5,698,100)               (42,600)
  Investment in joint ventures and limited partnerships                                 0                (14,600)
  Joint venture and limited partnerships cash distributions                        42,900                      0
                                                                    ----------------------  ---------------------

Net cash (used in) provided by investing activities                            (5,655,200)                335,700
                                                                    ----------------------  ---------------------

Cash flows from financing activities:
  Issuance of Common Shares to Advisor                                            478,500                      0
  Proceeds from note from Advisor                                               5,001,500               (241,300)
  Dividends paid                                                                 (211,300)              (211,800)
  Repayment of mortgage notes payable                                                   0                 (7,100)
                                                                    ----------------------  ---------------------

Net cash provided by (used in) financing activities                             5,268,700               (460,200)
                                                                    ----------------------  ---------------------

Net decrease in cash and cash equivalents                                          12,500                (45,200)
Cash and cash equivalents at beginning of period                                   82,800                142,000
                                                                    ----------------------  ---------------------

Cash and cash equivalents at end of period                           $             95,300     $           96,800
                                                                    ======================  =====================


</TABLE>

                 See Accompanying Notes to Financial Statements

                                        6

<PAGE>



                                 N' TANDEM TRUST
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1.  THE TRUST

Background
----------

N' Tandem Trust, an unincorporated  California  business trust (the Trust),  was
formed in  November  1991 for the  purpose of  acquiring,  managing  and selling
existing manufactured home communities.  The Advisor of the Trust is The Windsor
Corporation,  a California  corporation  ("the  Advisor").  In  September  1997,
Chateau  Communities,  Inc ("Chateau"),  a publicly held real estate  investment
trust, purchased 100% of the shares of the Advisor.

The Trust was  organized  to invest in  existing,  substantially  developed  and
occupied manufactured home communities. The Trust operates so as to qualify as a
real estate  investment  trust (a REIT) under  Sections  856-860 of the Internal
Revenue Code of 1986, as amended (the "Code").  As a REIT, the Trust distributes
to its shareholders  substantially  all of its cash flow from operations and, in
any event, at least 95% of its real estate investment trust taxable income.

The Trust was funded  through a public  offering of common and preferred  shares
which commenced in April 1992 and terminated in April 1993.

Montgomery Acquisition; Chateau Investment
------------------------------------------

In an effort to enhance  shareholder value, the Trustees in the first quarter of
1998  authorized  the  Advisor  to attempt to  identify  additional  acquisition
opportunities  for  the  Trust.  The  Advisor  located  a  number  of  potential
acquisitions  and in March of 1998, the Trust  acquired a 627-site  manufactured
home  community  in  Montgomery,  Alabama,  for $5.5  million  (the  "Montgomery
Acquisition").  In order to enable  the Trust to make the  acquisition,  Chateau
offered to make an  investment  in the Trust.  The Trustees  accepted such offer
and, on March 30,  1998,  the Trust  entered  into an  agreement  with  Chateau,
pursuant  to which  Chateau  invested  $5.5  million in the Trust (the  "Chateau
Investment")  in exchange for the issuance  within 90 days of such investment of
(i) such number of Common  Shares of  beneficial  interest  offering  Trust (the
"Common  Shares") (at a price of $25 per share) as the  Trustees may  determine;
and (ii) promissory notes in a principal amount of the balance of the investment
(the "Promissory Notes"). In connection with the Chateau Investment,  on May 11,
1998,  the Trust issued to Chateau (i) 19,139  Common  Shares (at a price of $25
per share); and (ii) two Promissory Notes with an aggregate  principal amount of
$5,001,525.

1998 Annual Meeting of Shareholders; Approval of Organizational Amendments; 
Other Matters
---------------------------------------------------------------------------

On  September  23, 1998 the Trust  provided to  Shareholders  a Proxy  Statement
seeking the approval of the Trust's  shareholders  of (i) the  conversion of the
Trust from a finite-life entity to an infinite-life  entity ("Proposal 1"); (ii)
the amendment and restatement of the Trust's  Declaration of Trust (the "Amended
Declaration"),  and the  adoption  of By-laws for the Trust  ("Proposal  2", and
together with Proposal 1, the "Organizational  Amendments");  (iii) the approval
of a stock  option plan for the Trust,  through the approval and adoption of the
proposed  form of the 1998 Equity  Compensation  Plan (the "Equity  Compensation
Plan Approval" or "Proposal 3"); and (iv) the annual election of trustees of the
Trust.  The Proposals  were  presented and approved by the  shareholders  at the
Annual Meeting of Shareholders of the Trust held on October 23, 1998.

                                        7
<PAGE>


The  principal  purposes of the  Organizational  Amendments  were to convert the
Trust from a  finite-life  to an  infinite-life  entity,  and to remove  various
restrictions  and limitations and other  requirements  contained in the existing
Declaration  of Trust of the  Trust  which are not  typically  found in the more
modern  organizational  documents of leading real estate investment  trusts. The
Amended  Declaration  also  provided  for  changing  the name of the Trust  from
"Windsor Real Estate Investment Trust 8" to "N' Tandem Trust."

As discussed in the Proxy Statement,  the Trust now intends to move forward with
certain transactions and to effect certain changes including the following:  (i)
Chateau,  a publicly  held real  estate  investment  trust  which is the largest
owner/operator  of manufactured  home communities in the United States and which
is the sole  shareholder  of the  Advisor,  will proceed with the purchase of an
additional  130,000 Common Shares or Preferred  Shares or a combination  thereof
(which will give Chateau an  approximate  45% ownership  interest in the Trust),
for a  purchase  price of $25 per share;  (ii) the Trust will form an  operating
partnership  subsidiary  in order to  facilitate  tax-free  and/or  tax-deferred
acquisitions of additional properties; (iii) the Trust will begin implementing a
growth-oriented  business plan (the "Business Plan") intended to cause the Trust
to  attain  greater  size and asset  diversity;  and (iv) if  successful  in the
implementation  of the Business Plan, the Trust anticipates that it will seek to
list the  Common  Shares on a national  securities  exchange  or NASDAQ,  and if
deemed  appropriate,  raise  additional  capital through an underwritten  public
offering of the Common Shares or other securities of the Trust.

The Trust's  current  portfolio  of  properties  is  comprised  of a 100 percent
ownership  interest in three manufactured  home  community  properties  and a 40
percent,  11  percent,  and 11 percent  interest,  respectively,  in three other
manufactured  home community  properties.  The Trust  believes that  significant
opportunities  exist to acquire  additional  properties  that fit the investment
objectives and guidelines set forth in its Business Plan. The Trust  anticipates
that it will focus on acquisitions where the Trust believes there is substantial
opportunity  to  improve  operational  and  financial  results or where for some
reason,  because  of poor  management  or  otherwise,  a property  is  operating
substantially below its potential.

Additionally, Chateau has advised the Trust that it intends to announce that the
Trust will be a primary vehicle  through which Chateau will make  investments in
manufactured home communities that do not fit the core asset type typical of the
existing  Chateau   portfolio,   which  is   characterized  by  large,   stable,
institutional-quality,  full amenitized properties. The Trust will employ higher
levels of leverage  than  Chateau  and will focus  primarily  on "lower  profile
assets",  meaning  properties  that (i) are typically not part of a portfolio of
manufactured  housing  community  properties;   (ii)  are  located  in  tertiary
demographic and geographic markets;  (iii) are not managed by a nationally known
manufactured  home community  operator;  (iv) may be managed by an on-site owner
who lives at the  property;  and (v) may be smaller and are likely to have fewer
amenities and a greater proportion of single-wide homes than the typical Chateau
community. The Trust believes that its affiliation with Chateau will benefit the
Trust by providing it with access to Chateau's national organization, management
team and investment and management  philosophies.  Through its affiliation  with
Chateau,  the  Trust  believes  that it  will be  exposed  to a wider  range  of
acquisition  opportunities  as a result of Chateau's  national  organization and
knowledge of the manufactured  housing community  industry and will benefit from
Chateau's expertise in effectively and efficiently managing properties.

NOTE 2.  BASIS OF PRESENTATION

The balance sheet at September 30, 1998 and the related statements of operations
for the  three  and  nine  months  ended  September  30,  1998  and 1997 and the
statements  of cash flows for the nine months ended  September 30, 1998 and 1997
are  unaudited.  However,  in the  opinion  of the  Advisor,  they  contain  all
adjustments,  of a normal recurring nature, necessary for a fair presentation of
such financial  statements.  Interim results are not  necessarily  indicative of
results for a full year.

                                        8
<PAGE>


The financial statements and notes are presented as permitted by Form 10-QSB and
do not contain  certain  information  included in the Trust's  annual  financial
statements and notes on form 10-KSB for the year ended December 31, 1997.

NOTE 3.  INVESTMENTS IN JOINT VENTURES AND LIMITED PARTNERSHIPS

The Trust's  investments in joint ventures and limited  partnerships  consist of
interests in three  manufactured  home  communities  at September 30, 1998.  The
combined  condensed  results of  operations  of the joint  venture  and  limited
partnership properties for the nine months ended September 30, 1998 and 1997 are
as follows:
<TABLE>
<CAPTION>

                                                             1998                               1997
<S>                                                          <C>                                 <C>
Total revenues                                  $          915,600           $               792,500

Expenses:
  Property operating                                       519,600                           468,500
  Interest                                                 334,900                           270,200
  Depreciation                                             206,200                           173,600
  General and Administrative                                 7,200                                 0
                                                -------------------          ------------------------
                                                         1,067,900                           912,300

                                                -------------------          ------------------------
Net (loss)                                      $        (152,300)           $             (119,800)
                                                ===================          ========================
</TABLE>

NOTE 4.  EQUITY TRANSACTIONS

The number of Common Shares issued and outstanding  include 19,139 shares issued
to Chateau Communities, Inc. which was completed May 11, 1998.



NOTE 5.  BASIC AND DILUTIVE LOSS PER COMMON SHARE

Basic and dilutive loss per Common Share is calculated and based on the weighted
average number of Common Shares outstanding during the period and income or loss
available  to the Common  Shareholders.  The weighted  average  number of Common
Shares outstanding during the three and nine months ended September 30, 1998 was
109,308 and  103,069,  respectively  and during the three and nine months  ended
September 30, 1997 the weighted average was 90,169.

In 1997, the Trust adopted Statement of Financial  Accounting  Standards No. 128
(SFAS 128),  "Earnings  Per  Share."  This  accounting  standard  specifies  new
computation, presentation, and disclosure requirements for earnings per share to
be applied retroactively.  Among other things, SFAS 128 requires presentation of
basic and diluted  earnings per share on the face of the income  statement.  The
adoption  of SFAS 128  resulted  in the  restatement  of the per  share  results
previously  reported  increasing  the loss per  share by $0.41 and $1.02 for the
three and nine months ended September 30, 1997, respectively.

                                   9
<PAGE>


NOTE 6.  DEBT

The following table sets forth certain  information  regarding debt at September
30, 1998.
<TABLE>
<CAPTION>

                                                   Interest Rate          Maturity Date          Principal Balance
<S>                                                      <C>                     <C>                       <C>    
Variable Rate Mortgage debt                             8.64 %                 6/2/02                 $ 2,050,000
Secured Note (Woodland Hills)                           9.50 %                 4/1/99                   3,650,600
Unsecured Note (Woodland Hills)                         9.50 %                 4/1/99                   1,350,900

                                                                                                     ------------
                                                                                                      $ 7,051,500

</TABLE>


NOTE 7.  RELATED PARTY TRANSACTIONS

Advisory fee expense  represents a fee payable to the Advisor for  management of
the Trust's business. The fee is computed based on invested and uninvested asset
levels and is subject to certain subordination provisions.  Advisory fee expense
for the three and nine months ended September 30, 1998 was $39,100 and $102,900,
respectively,  and  $8,700  and  $37,500  for the  three and nine  months  ended
September 30, 1997, respectively.

Chateau and/or its predecessor has been providing property  management  services
to the Trust since 1992. For this service, Chateau is paid a property management
fee, which is based on a percentage of actual gross receipts of the  properties.
The total management fees paid to Chateau were $22,900 and $55,600 for the three
and nine months ended September 30, 1998, respectively,  and $10,900 and $36,700
for the three  and nine  months  ended  September  30,  1997,  respectively.  In
addition  certain direct expenses are paid by Chateau on behalf of the Trust and
then  reimbursed  by the Trust.  These  amounts  were $7,600 and $19,000 for the
three and nine months ended  September  30, 1998,  respectively,  and $6,500 and
$19,400 for the three and nine months ended September 30, 1997, respectively.

For   additional   information   concerning   the  Trust's   relationship,   and
transactions, with Chateau, see Note 1 herein.

                                        10

<PAGE>


                                 N' TANDEM TRUST
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

Three  months  ended  September  30,  1998 as  compared  to three  months  ended
September 30, 1997
--------------------------------------------------------------------------------

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

The Trust  incurred a net loss of $130,000 and $1,200 for the three months ended
September  30, 1998 and 1997,  respectively.  The net loss per Common  Share was
$1.53 in 1998  compared to a net loss of $0.42 in 1997.  The increase in the net
loss is  primarily  due to the  increase in interest  expense,  advisory fee and
depreciation  expense incurred due to the Montgomery  Acquisition  offset by the
increase in the net operating income from the Montgomery Acquisition.

Rent and utility  revenues  increased  from $222,000 in 1997 to $465,800 in 1998
due to the Montgomery Acquisition.

Equity in earnings of joint  ventures and limited  partnerships  represents  the
Trust's  share  of the net  income  (loss)  of six  joint  venture  and  limited
partnership properties.  Equity in earnings or share of losses of joint ventures
and limited  partnerships  decreased  from a loss of $8,500 in 1997 to a loss of
$5,100 in 1998.

Interest  income  decreased  from $1,500 in 1997 to $600 in 1998,  due mainly 
to lower cash balances  maintained by the Trust.

Property  operating expenses increased from $107,400 in 1997 to $251,000 in 1998
due to the Montgomery Acquisition.

Interest expense  increased from $47,700 in 1997 to $163,900 in 1998, due to the
issuance of the Promissory Notes, in connection with the Montgomery Acquisition.

Depreciation  expense  increased from $40,800 in 1997 to $109,500 in 1998 due to
the Montgomery Acquisition.

Advisory fee expense  represents a fee payable to the Advisor for  management of
the Trust's business. The fee is computed based on invested and uninvested asset
levels and is subject to certain subordination provisions.  Advisory fee expense
increased  from $8,700 to $39,100 for the three months ended  September 30, 1997
and 1998,  respectively.  The increase is due to the  increased  invested  asset
levels incurred with the Montgomery Acquisition.

General and administrative expenses increased from $13,900 in 1997 to $33,500 in
1998 primarily due to trustee fees paid in August.

Nine months ended  September 30, 1998 as compared to nine months ended September
30, 1997
--------------------------------------------------------------------------------

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

The Trust  incurred a net loss of $231,100 and $18,100 for the nine months ended
September  30, 1998 and 1997,  respectively.  The net loss per Common  Share was
$3.31 in 1998  compared to a net loss of $1.25 in 1997.  The increase in the net

                                        11

<PAGE>


loss is  primarily  due to the  increase in interest  expense,  advisory fee and
depreciation  expense incurred due to the Montgomery  Acquisition  offset by the
increase in the net operating income from the Montgomery Acquisition.

Rent and utility revenues  increased from $735,300 in 1997 to $1,146,000 in 1998
due primarily to the Montgomery Acquisition.

Equity in earnings of joint  ventures and limited  partnerships  represents  the
Trust's  share  of the net  income  (loss)  of six  joint  venture  and  limited
partnership properties.  Equity in earnings or share of losses of joint ventures
and limited partnerships remained relatively unchanged for the nine months ended
September 30, 1998 and for the same period in 1997.

Interest  income  decreased from $4,500 in 1997 to $1,400 in 1998, due mainly to
lower cash balances maintained by the Trust.

Property  operating expenses increased from $351,900 in 1997 to $552,700 in 1998
due to the Montgomery Acquisition offset by the sale of Griffwood.

Interest expense increased from $179,500 in 1997 to $387,000 in 1998, due to the
issuance of the Promissory Notes, in connection with the Montgomery Acquisition.

Depreciation  expense increased from $122,300 in 1997 to $259,900 in 1998 due to
the Montgomery Acquisition.

Advisory fee expense  represents a fee payable to the Advisor for  management of
the Trust's business. The fee is computed based on invested and uninvested asset
levels and is subject to certain subordination provisions.  Advisory fee expense
increased from $37,500 to $102,900 for the nine months ended  September 30, 1997
and 1998,  respectively.  The increase is due to the  increased  invested  asset
levels which incurred with the Montgomery Acquisition.

General and administrative expenses increased from $53,400 in 1997 to $67,100 in
1998 due to Trustee fees paid in 1998.

Changes in Financial Condition
------------------------------

The Trust's  primary  sources of cash during the nine months ended September 30,
1998 were from the  operations  of its  investment  properties,  and the Chateau
Investment.  The  primary  uses of cash  during  the  same  period  were for the
purchase of a manufactured home community, cash dividends, and debt service.

On March 31, 1998, the Trust completed the Montgomery Acquisition for a purchase
price of  approximately  $5.5 million.  In order to enable the Trust to complete
the Montgomery Acquisition,  in March 1998 Chateau offered to make an investment
in the Trust. The Trustees  accepted such offer and, on March 30, 1998,  entered
into an agreement with Chateau,  pursuant to which Chateau invested $5.5 million
in the Trust (the "Chateau  Investment")  in exchange for the issuance within 90
days of such  investment  of (i) such  number  of Common  Shares  (at a price of
$25.00 per share) as the Trustees may determine;  and (ii) Promissory Notes in a
principal  amount of the  balance  of the  investment.  In  connection  with the
Chateau  Investment,  on May 11,  1998,  the Trust  issued to Chateau (i) 19,139
Common Shares (at a price of $25.00 per share);  and (ii) two  Promissory  Notes
with an aggregate principal amount of approximately $5.0 million.

At  September  30,  1998,  the  Trust's  total  mortgage  debt,   including  its
proportionate   share  of  joint  venture  and  limited  partnership  debt,  was
$8,025,900,  consisting  entirely of  variable  rate debt.  The average  rate of
interest on the variable rate debt was 9.1% at September 30, 1998.

                                        12
<PAGE>


The future  sources of cash for the Trust in the near term will be provided from
property operations, and cash reserves. The future uses of such cash will be for
property and Trust operations,  debt service, cash dividends to shareholders and
acquisitions of additional  properties.  The Advisor believes that these sources
of cash are sufficient to meet the working capital requirements of the Trust for
the foreseeable  future.  Additional  capital,  will,  however,  be required for
additional property acquisitions. The Trust would expect to fund such additional
acquisitions  through  additional  equity  or debt  financings  or  through  the
exchange of its  securities or the  securities of its new operating  partnership
subsidiary  for the  additional  properties.  The  Trust  also  intends  to seek
additional investments in the Trust from Chateau, and third parties unaffiliated
with the Trust.

In 1997, the Trust adopted Statement of Financial  Accounting  Standards No. 128
(SFAS 128),  "Earnings  Per  Share."  This  accounting  standard  specifies  new
computation, presentation, and disclosure requirements for earnings per share to
be applied retroactively.  Among other things, SFAS 128 requires presentation of
basic and diluted  earnings per share on the face of the income  statement.  The
adoption  of SFAS 128  resulted  in the  restatement  of the per  share  results
previously  reported  increasing  the loss per  share by $0.41 and $1.02 for the
three and nine months ended September 30, 1997, respectively.

Year 2000 Issue
---------------

Background
----------

Management  continues  to  assess  the  impact  of the  Year  2000  Issue on its
reporting  systems  and  operations.  The Year 2000 Issue  exists  because  many
computer systems and applications  abbreviate dates by eliminating the first two
digits of the year, assuming that these two digits are always "19". As a result,
date-sensitive  computer  programs  may  recognize a date using "00" as the year
1900 rather  than the year 2000.  Unless  corrected,  the  potential  exists for
computer  system  failures or incorrect  processing of financial and operational
information, which could disrupt operations.

Approach & Costs
----------------

To help  facilitate  the  Trust's  continued  growth,  substantially  all of the
computer  systems and applications in use in its home office and properties have
been, or are in the process of being upgraded and modified.  The Trust is of the
opinion  that,  in  connection  with those  upgrades and  modifications,  it has
addressed  applicable Year 2000 Issues as they might affect the computer systems
and  applications  located in the  Trust's  offices  and  properties.  The Trust
anticipates that implementation of solutions to any Year 2000 Issue which it may
discover will require the expenditure of sums which the Trust does not expect to
be material.

Risks Associated with the Year 2000 Problem
-------------------------------------------

The Trust is  exposed  to the risk that one or more of its  vendors  or  service
providers may  experience  Year 2000  problems  which impact the ability of such
vendor  or  service  provider  to  provide  goods  and  services.   Due  to  the
availability of alternative  suppliers,  this is not considered as significant a
risk with respect to the suppliers of goods. The disruption of certain services,
however, such as utilities,  could, depending upon the extent of the disruption,
have a material adverse impact on the Trust's operations.  To date, the Trust is
not aware of any vendor or  service  provider  Year 2000  issue that  management
believes  would have a material  adverse impact on the Trust's  operations.  The
Trust,  however,  has no means of ensuring that its vendors or service providers
will be Year 2000  ready.  The  inability  of vendors or  service  providers  to
complete  the Year 2000  resolution  process in a timely  fashion  could have an

                                        13
<PAGE>


adverse  impact on the Trust and the  effect of  non-compliance  by  vendors  or
service  providers is not  determinable at this time.  Residents who pay rent to
the Trust do not pose Year 2000 problems for the Trust given the type and nature
of the Trust's properties and residents.

Widespread  disruptions  in the  national or  international  economy,  including
disruptions affecting the financial markets, resulting from Year 2000 issues, or
in certain  industries,  such as commercial or investment banks, could also have
an adverse impact on the Trust. The likelihood and effect of such disruptions is
not determinable at this time.

Management  expects  to have  all  systems  appropriately  modified  before  any
significant  processing  malfunctions  could  occur and does not expect the Year
2000 Issue will materially  impact the financial  condition or operations of the
Trust.

                                        14


<PAGE>


                           PART II - Other Information

Item 2.  Changes in Securities and Use of Proceeds

On October 23, 1998, at the Annual Meeting of Shareholders,  the shareholders of
the trust  adopted an Amended  Declaration  of Trust for the Trust which effects
various  changes in the rights of the holders of the common shares and Preferred
Shares of the Trust.  The Amended  Declaration also provides for the exchange of
each Common Share and Preferred Share of the Trust for a share of a new class of
Common Shares and preferred  shares,  respectively,  which will have the various
rights and be subject to the limitations  set forth in the Amended  Declaration.
Under the Amended  Declaration,  (i) in keeping with the conversion of the Trust
from a  finite-life  to an  infinite-life  entity,  the Trust  will no longer be
required to make  distributions  to  shareholders  of all proceeds from sales or
refinancings of properties; (ii) effective upon the listing of the Common Shares
on any national  securities exchange or NASDAQ, the Trust will have the right to
redeem  outstanding  Preferred  Shares upon 60 days' written notice to Preferred
Shareholders,  at a redemption  price per Preferred Share equal to the Preferred
Share Liquidation Preference,  which will equal $25.00 plus any dividends on the
Preferred  Shares that are  accrued  and unpaid  following  such  adoption  (the
"Redemption  Rights");  and (iii) each holder of Preferred  Shares will have the
right,  which  becomes  exercisable  if the  Preferred  Shares  are  called  for
redemption,  to convert each Preferred Share held by such holder into one Common
Share,  at any time prior to the  Redemption  Date, by the delivery of notice of
such exercise to the Trust.

The  information  contained  herein is  qualified  in its  entirety  by the more
detailed  information  contained  under  the  caption  "Comparison  of Terms and
Provisions of Existing Declaration of Trust, Amended Declaration and By-laws" in
the Trust's  Definitive  Schedule 14A dated October 2, 1998 and such information
is hereby incorporated herein in its entirety by reference.

Item 4.  Submission of Matters to a vote of Security Holders

1998 Annual Meeting of Shareholders; Approval of Organizational Amendments; 
Other Matters

On September  23,  1998,  the Trust mailed to  shareholders  a Definitive  Proxy
Statement seeking the approval of the Trust's shareholders of (i) the conversion
of the Trust from a finite-life  entity to an  infinite-life  entity  ("Proposal
1"); (ii) the amendment and restatement of the Trust's Declaration of Trust, and
the adoption of By-laws for the Trust  ("Proposal 2", and together with Proposal
1,  the  "Organizational   Amendments");   (iii)  the  approval  of  the  Equity
Compensation  Plan  ("Proposal  3"); and (iv) the annual election of trustees of
the Trust.

The  Proposals  were  presented and approved by the  Shareholders  at the Annual
Meeting of  Shareholders  of the Trust held on October 23, 1998.  Proposal 1 was
approved by (i) the holders of 53,507 Common Shares, or 55.11% of the issued and
outstanding  Common Shares and (ii) the holders of 52,906 Preferred  Shares,  or
54.49% of the issued and outstanding  Preferred Shares.  Proposal 2 was approved
by (i) the  holders  of  53,507  Common  Shares,  or 55.11%  of the  issued  and
outstanding  Common Shares,  and (ii) the holders of 52,906 Preferred Shares, or
54.49% of the issued and outstanding  Preferred Shares.  Proposal 3 was approved
by (i) the  holders  of  68,434  Common  Shares,  or 62.72%  of the  issued  and
outstanding  Common Shares,  and (ii) the holders of 52,524 Preferred Shares, or
53.56% of the issued and outstanding Preferred Shares. Gary P. McDaniel, Kenneth
G.  Pinder and  Richard B. Ray were  re-elected  as the  Trustees  of the Trust,
receiving respectively 63,417 votes, 3,258 votes and 2,058 votes.

With  respect to Proposal 1, (i) holders of 3,168 Common  Shares  voted  against
Proposal 1 and holders of 1,800  Common  Shares  abstained,  and (ii) holders of
3,857 Preferred  Shares voted against Proposal 1, and holders of 2,396 Preferred
Shares abstained.

With  respect to Proposal 2, (i) holders of 3,168 Common  Shares  voted  against
Proposal 2, and holders of 1,800 Common  Shares  abstained,  and (ii) holders of
3,857 Preferred  Shares voted against Proposal 2, and holders of 2,396 Preferred
Shares abstained.

With  respect to Proposal 3, (i) holders of 3,260 Common  Shares  voted  against
Proposal 2, and holders of 4,600 Common  Shares  abstained,  and (ii) holders of
2,629 Preferred  Shares voted against Proposal 2, and holders of 4,990 Preferred
Shares abstained.

                                        15
<PAGE>


Please   see  Note  1  herein  for   additional   information   concerning   the
Organizational  Amendments  and proposed  activities of the Trust  following the
adoption of the Organizational Amendments.

At  the  Annual  Meeting,   the  Shareholders  also  approved  the  1998  Equity
Compensation Plan which provides for the  discretionary  grant by a compensation
committee of the Board of incentive stock options which meet the requirements of
Section 422 of the Code,  non-qualified  stock  options,  restricted  shares and
dividend equivalent rights.

The  information  in this item is  qualified in its entirety by reference to the
more detailed information contained in the Trust's Definitive Schedule 14A filed
with the  Commission  on  October  2,  1998,  and  such  information  is  hereby
incorporated herein in its entirety by reference.

Item 6.  Exhibits And Reports On Form 8-K

          (a)   Exhibits and Index of Exhibits

                (3.1) Amended and Restated Declaration of Trust of the Trust*

                (3.2) By-laws of the Trust*

                (27)  Financial Data Schedule

          (b)   Reports on Form 8-K
                  None
-----------
* Incorporated by reference to the Trust's Definitive Schedule 14A filed October
2, 1998.

                                   16

<PAGE>


                                    SIGNATURE





In accordance with the  requirements of the Exchange Act, the registrant caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto duly
authorized.





                                                  N' Tandem Trust
                                                  (Registrant)

                                                  By:  /s/ Gary P. McDaniel
                                                  -------------------------
                                                       GARY P. McDANIEL
                                                        Trustee


Date:  November 16, 1998