UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549FORM 10-Q

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended March 31, 2001or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________ to ____________
Commission File #0-16780Inland Real Estate Growth Fund II, L.P.(Exact name of registrant as specified in its charter)

|Delaware                                                      | #36-3547165                            
|------------------------------------------------------------- | ---------------------------------------
|(State or other jurisdiction of incorporation or organization | (I.R.S. Employer Identification Number)
|                                                              |                                        
|                                                              |                                        
|2901 Butterfield Road, Oak Brook, Illinois                    | 60523                                  
|(Address of principal executive office)                       | (Zip Code)                             

Registrant's telephone number, including area code:  630-218-8000

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes: X ;No:



---

INLAND REAL ESTATE GROWTH FUND II, L.P.
(a limited partnership)
Balance Sheets
March 31, 2001 and December 31, 2000
(unaudited)Assets

|                                                                                                                                                     |   | 2001      | 2000     
|---------------------------------------------------------------------------------------------------------------------------------------------------- | - | --------- | ---------
|                                                                                                                                                     |   |           |          
|Current assets:                                                                                                                                      |   |           |          
|Cash and cash equivalents including amounts held by property    manager                                                                              | $ | 98,029    | 69,822   
|Accrued interest receivable                                                                                                                          |   | 34        | 659      
|                                                                                                                                                     |   |           |          
|Total current assets                                                                                                                                 |   | 98,063    | 70,481   
|                                                                                                                                                     |   |           |          
|Investment property (including acquisition fees paid to Affiliates   of $59,500 at March 31, 2001 and December 31, 2000)                             |   |           |          
|Land                                                                                                                                                 |   | 438,388   | 438,388  
|Building and improvements                                                                                                                            |   | 1,096,872 | 1,096,872
|                                                                                                                                                     |   |           |          
|                                                                                                                                                     |   | 1,535,260 | 1,535,260
|Less accumulated depreciation                                                                                                                        |   | 438,475   | 429,334  
|Total investment property, net of accumulated depreciation                                                                                           |   | 1,096,785 | 1,105,926
|                                                                                                                                                     |   |           |          
|Accrued rents receivable                                                                                                                             |   | 12,866    | 16,774   
|Deferred leasing fees to Affiliates (net of accumulated   amortization of $24,652 and $23,986 at March 31, 2001 and December 31, 2000, respectively) |   | 1,333     | 1,999    
|                                                                                                                                                     |   |           |          
|Total assets                                                                                                                                         | $ | 1,209,047 | 1,195,180



See accompanying notes to financial statements

---

INLAND REAL ESTATE GROWTH FUND II, L.P.
(a limited partnership)
Balance Sheets
(continued)
March 31, 2001 and December 31, 2000
(unaudited)Liabilities and Partners' Capital

|                                                                                                                                                                                            |   | 2001        | 2000       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ----------- | -----------
|Current liabilities:                                                                                                                                                                        |   |             |            
|Accounts payable                                                                                                                                                                            | $ | 6,332       | -          
|Current portion of long-term debt                                                                                                                                                           |   | 450,000     | 450,000    
|Due to Affiliates                                                                                                                                                                           |   | 1,457       | 1,387      
|                                                                                                                                                                                            |   |             |            
|Total current liabilities                                                                                                                                                                   |   | 457,789     | 451,387    
|                                                                                                                                                                                            |   |             |            
|Commission payable to Affiliates                                                                                                                                                            |   | 135,000     | 135,000    
|                                                                                                                                                                                            |   |             |            
|Total liabilities                                                                                                                                                                           |   | 592,789     | 586,387    
|                                                                                                                                                                                            |   |             |            
|Partners' capital:                                                                                                                                                                          |   |             |            
|General Partner:                                                                                                                                                                            |   |             |            
|Capital contribution                                                                                                                                                                        |   | 500         | 500        
|Cumulative net income                                                                                                                                                                       |   | 17,456      | 17,381     
|Cumulative cash distributions                                                                                                                                                               |   | (9,939)     | (9,939)    
|                                                                                                                                                                                            |   |             |            
|                                                                                                                                                                                            |   | 8,017       | 7,942      
|Limited Partners:                                                                                                                                                                           |   |             |            
|Units of $1,000. Authorized 25,000 Units, 3,921.25 outstanding at     March 31, 2001 and December 31, 2000 (net of offering costs of     $462,849, of which $59,476 was paid to Affiliates) |   | 3,534,495   | 3,534,495  
|Cumulative net income                                                                                                                                                                       |   | 1,728,158   | 1,720,768  
|Cumulative cash distributions                                                                                                                                                               |   | (4,654,412) | (4,654,412)
|                                                                                                                                                                                            |   |             |            
|                                                                                                                                                                                            |   | 608,241     | 600,851    
|                                                                                                                                                                                            |   |             |            
|Total Partners' capital                                                                                                                                                                     |   | 616,258     | 608,793    
|                                                                                                                                                                                            |   |             |            
|Total liabilities and Partners' capital                                                                                                                                                     | $ | 1,209,047   | 1,195,180  





See accompanying notes to financial statements.

---

INLAND REAL ESTATE GROWTH FUND II, L.P.
(a limited partnership)
Statements of Operations
For the three months ended March 31, 2001 and 2000
(unaudited)

|                                                                               |   | 2001   | 2000  
|------------------------------------------------------------------------------ | - | ------ | ------
|                                                                               |   |        |       
|Income:                                                                        |   |        |       
|Rental income                                                                  | $ | 51,661 | 51,661
|Interest income                                                                |   | 512    | 4,211 
|                                                                               |   |        |       
|                                                                               |   | 52,173 | 55,872
|Expenses:                                                                      |   |        |       
|Professional services to Affiliates                                            |   | 2,089  | 1,009 
|Professional services to non-affiliates                                        |   | 11,250 | 16,600
|General and administrative expenses to Affiliates                              |   | 3,780  | 6,220 
|General and administrative expenses to non-affiliates                          |   | 354    | 2,754 
|Property operating expenses to Affiliates                                      |   | 556    | 556   
|Property operating expenses to non-affiliates                                  |   | 6,331  | -     
|Mortgage interest                                                              |   | 10,541 | 18,567
|Depreciation                                                                   |   | 9,141  | 9,140 
|Amortization                                                                   |   | 666    | 666   
|                                                                               |   |        |       
|                                                                               |   | 44,708 | 55,512
|                                                                               |   |        |       
|Net income                                                                     | $ | 7,465  | 360   
|                                                                               |   |        |       
|Net income allocated to:                                                       |   |        |       
|General Partner                                                                |   | 75     | 4     
|Limited Partners                                                               |   | 7,390  | 356   
|                                                                               |   |        |       
|Net income                                                                     | $ | 7,465  | 360   
|                                                                               |   |        |       
|Net income allocated to the one General Partner Unit                           | $ | 75     | 4     
|                                                                               |   |        |       
|Net income per weighted average Limited Partnership Units, basic and   diluted | $ | 1.88   | .09   
|                                                                               |   |        |       



See accompanying notes to financial statements.

---

INLAND REAL ESTATE GROWTH FUND II, L.P.
(a limited partnership)
Statements of Cash Flows
For the three months ended March 31, 2001 and 2000
(unaudited)

|                                                                                        |   | 2001   | 2000   
|--------------------------------------------------------------------------------------- | - | ------ | -------
|Cash flows from operating activities:                                                   |   |        |        
|Net income                                                                              | $ | 7,465  | 360    
|Adjustments to reconcile net income to net cash provided by       operating activities: |   |        |        
|Depreciation                                                                            |   | 9,141  | 9,140  
|Amortization                                                                            |   | 666    | 666    
|Changes in assets and liabilities:                                                      |   |        |        
|Accrued rents receivable                                                                |   | 3,908  | 3,913  
|Accrued interest and other receivable                                                   |   | 625    | 10     
|Accounts payable                                                                        |   | 6,332  | 8,834  
|Accrued interest payable                                                                |   | -      | 18,567 
|Due to Affiliates                                                                       |   | 70     | 2,410  
|                                                                                        |   |        |        
|Net cash provided by operating activities                                               |   | 28,207 | 43,900 
|                                                                                        |   |        |        
|                                                                                        |   |        |        
|Net increase in cash and cash equivalents                                               |   | 28,207 | 43,900 
|Cash and cash equivalents at beginning of period                                        |   | 69,822 | 287,500
|                                                                                        |   |        |        
|Cash and cash equivalents at end of period                                              | $ | 98,029 | 331,420
|                                                                                        |   |        |        
|                                                                                        |   |        |        
|                                                                                        |   |        |        
|Supplemental disclosure of cash flow information:                                       |   |        |        
|                                                                                        |   |        |        
|Cash paid for mortgage and other interest                                               | $ | 10,541 | -      
|                                                                                        |   |        |        



See accompanying notes to financial statements.

---

INLAND REAL ESTATE GROWTH FUND II, L.P.
(a limited partnership)
Notes to Financial Statements
March 31, 2001
(unaudited)

Readers of this Quarterly Report should refer to the Partnership's audited financial statements for the fiscal year ended December 31, 2000, which are included in the Partnership's 2000 Annual Report, as certain footnote disclosures
which would substantially duplicate those contained in such audited financial statements have been omitted from this Report.



(1) Organization and Basis of Accounting



Inland Real Estate Growth Fund II, L.P. (the "Partnership"), was formed in June 1987, pursuant to the Delaware Revised Uniform Limited Partnership Act, to invest in improved residential, retail, industrial and other income producing
properties.  On September 21, 1987, the Partnership commenced an Offering of 25,000 Limited Partnership Units (the "Units") pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933.  The Partnership terminated the Offering on
September 21, 1989.  A total of 4,038.25 Units were sold to the public at $1,000 per Unit, yielding gross offering proceeds of $4,038,250, not including the General Partner's contribution of $500.  All of the holders of these Units were admitted to the
Partnership.  As of March 31, 2001, the Partnership has repurchased a total of 117 Units ($40,906) from various Limited Partners.  At March 31, 2001, included in cash and cash equivalents, is approximately $9,000 restricted for use by the Unit Repurchase
Program.  The Limited Partners of the Partnership share in their portion of benefits of ownership of the Partnership's real property investment according to the number of Units held.  Inland Real Estate Investment Corporation is the General Partner.



The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from those estimates.



In the opinion of management, the financial statements contain all the adjustments necessary, which are of a normal recurring nature, to present fairly the financial position and results of operations.  Interim periods are not
necessarily indicative of results to be expected for the year.





---



INLAND REAL ESTATE GROWTH FUND II, L.P.
(a limited partnership)



Notes to Financial Statements
(continued)



March 31, 2001
(unaudited)



Statement of Financial Accounting Standards No. 121 (Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of) requires the Partnership to record an impairment loss on its property to be held for
investment whenever its carrying value cannot be fully recovered through estimated undiscounted future cash flows from its operations and sale.  The amount of the impairment loss to be recognized would be the difference between the property's carrying
value and the property's estimated fair value.  The Partnership's policy is to consider a property to be held for sale or disposition when the Partnership has committed to sell such property and active marketing activity has commenced. Adjustments for
impairment loss for such a property are made in each period as necessary to report the property at the lower of carrying value or fair value less cost to sell. As of March 31, 2001, the Partnership believes no such impairment exists on its property.





(2) Transactions with Affiliates



The General Partner and its Affiliates are entitled to reimbursement for salaries and expenses of employees of the General Partner and its Affiliates relating to the administration of the Partnership, of which $1,457 and $1,387
remained unpaid at March 31, 2001 and December 31, 2000, respectively.



In connection with the sales at Wellington Place apartment complex during 1991, the Partnership has recorded $135,000 of sales commissions payable to Affiliates of the General Partner.  Such commissions will be deferred until the
Limited Partners have received their Original Capital plus a return as specified in the Partnership Agreement.



An Affiliate of the General Partner is entitled to receive Property Management Fees for management and leasing services.  Management fees of $556 for both the three months ended March 31, 2001 and 2000, have been incurred and paid to
an Affiliate and are included in the Partnership's property operating expenses to Affiliates.



---

INLAND REAL ESTATE GROWTH FUND II, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)
March 31, 2001
(unaudited)

(3) Accrued Rents Receivable



The health club lease contains provisions providing for stepped rent increases. Generally accepted accounting principles require that rental income be recorded for the period of occupancy using the effective monthly rent, which is the
average monthly rent for the entire period of occupancy during the term of the lease.  The accompanying financial statements include a decrease of $3,908 and $3,913 in 2001 and 2000, respectively, of rental income for the period of occupancy for which
stepped rent increases apply and $12,866 and $16,774 in related accounts receivable as of March 31, 2001 and December 31, 2000, respectively.  Those amounts are expected to be collected over the terms of the related leases as scheduled rent payments are
made.



(4) Note Payable to Affiliate



As of February 1, 1999, the General Partner of the Partnership advanced funds on a short-term basis to the Partnership to pay off its mortgage payable balance of $780,288 plus accrued interest through the maturity date. During 2000,
the Partnership made principle paydowns on this note totaling $336,081.  The balance of the note payable to the General Partner of $450,000 has a current interest rate of 9.5% and requires monthly interest only payments.  A final balloon payment of all
outstanding principal and all accrued and unpaid interest, if any, was due on December 31, 1999 and was extended to December 31, 2001.  This note may be extended at the Partnership's option.

---

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

Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this quarterly report on Form 10-Q constitute "forward-looking statements" within the meaning of the Federal Private
Securities Litigation Reform Act of 1995.  These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Partnership's actual results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among other things, federal, state or local regulations; adverse changes in general economic or local conditions; inability of
borrower to meet financial obligations; uninsured losses; and potential conflicts of interest between the Partnership and its Affiliates, including the General Partner.



Liquidity and Capital Resources

On September 21, 1987, the Partnership commenced an Offering of 25,000 Limited Partnership Units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933.  The Offering terminated on September 21, 1989 with a total of 4,038.25
Units being sold to the public at $1,000 per Unit resulting in $4,038,250 in gross offering proceeds, not including the General Partner's contribution, of which $3,077,513 was invested in two properties.  In addition, proceeds were used to repay advances
from the General Partner, pay offering and organization costs and make distributions to the Limited Partners.  As of March 31, 2001, the Partnership has repurchased 117 Units ($40,906) from various Limited Partners through the Unit Repurchase Program.

At March 31, 2001, the Partnership had cash and cash equivalents of $98,029, which includes approximately $9,000 restricted for the repurchase of Units through the Unit Repurchase Program.  The Partnership intends to use available cash to paydown debt,
for working capital requirements and cash distributions.  The Partnership's property is generating sufficient cash flow to cover operating expenses and debt service.  To the extent that this source is insufficient to meet the Partnership's needs, the
Partnership may rely on advances from Affiliates of the General Partner, other short-term financing or may sell this property.

Upon liquidation of the Partnership, the General Partner will make a Supplemental Capital Contribution.  The Supplemental Capital Contribution shall be in an amount which will enable the Partnership to pay a liquidating distribution to the Limited
Partners equal to their Adjusted Invested Capital plus a noncompounded Minimum Return of 2% per annum on their Invested Capital.





Results of Operations

As of September 23, 1998, the Partnership listed and was actively marketing the Scandinavian Health Club property for sale at an amount in excess of its carrying value. The Partnership's business plan continues to be to sell the property and pay off the
debt.  In the event the property cannot be sold before the lease expires in October 2001 and the tenant does not hold over for an additional amount of time, the Partnership may need to consider a redevelopment and refinancing of the property from it's
current use to offices.  The General Partner has agreed not to demand payment under the loan.



On February 1, 1999, the General Partner of the Partnership advanced funds on a short-term basis to the Partnership to pay off its mortgage payable balance of $780,288 plus accrued interest through the maturity date. During 2000, the
Partnership made principle paydowns on this note totaling $336,081. The balance of the mortgage payable to the General Partner of $450,000 has a current interest rate of 9.5% and requires monthly interest only payments. A final balloon payment of all
outstanding principal and all accrued and unpaid interest, if any, is due on December 31, 2001. This loan may be extended at the Partnership's option.



The decrease in mortgage interest to Affiliates for the three months ended March 31, 2001, as compared to the three months ended March 31, 2000, is the result of the paydowns of the mortgage payable during 2000.



Professional services to Affiliates increased for the three months ended March 31, 2001, as compared to the three months ended March 31, 2000, due to an increase in accounting fees. Professional services to non-affiliates decreased for
the three months ended March 31, 2001, as compared to the three months ended March 31, 2000, due to a decrease in accounting fees.



General and administrative expenses to Affiliates decreased for the three months ended March 31, 2001, as compared to the three months ended March 31, 2000, due to a decrease in data processing expense.   General and administrative
expenses to non-affiliates decreased for the three months ended March 31, 2001, as compared to the three months ended March 31, 2000, due to a decrease in the Illinois replacement tax.

Property operating expenses to non-affiliates increased for the three months ended March 31, 2001, as compared to the three months ended March 31, 2000, due to an increase in the expenses relating to the marketing of the Partnership's remaining property.



PART II - Other Information

Items 1 through 6 (b) are omitted because of the absence of conditions under which they are required.

---

SIGNATURES

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



|      | INLAND REAL ESTATE GROWTH FUND II, L.P.                  
|----- | ---------------------------------------------------------
|      |                                                          
|By:   | Inland Real Estate Investment Corporation General Partner
|      |                                                          
|      |                                                          
|      |                                                          
|      | /S/ ROBERT D. PARKS                                      
|      |                                                          
|By:   | Robert D. Parks                                          
|      | Chairman                                                 
|Date: | May 15, 2001                                             
|      |                                                          
|      |                                                          
|      |                                                          
|      | /S/ PATRICIA A. DELROSSO                                 
|      |                                                          
|By:   | Patricia A. DelRosso                                     
|      | Senior Vice President                                    
|Date: | May 15, 2001                                             
|      |                                                          
|      |                                                          
|      |                                                          
|      | /S/ KELLY TUCEK                                          
|      |                                                          
|By:   | Kelly Tucek                                              
|      | Principal Financial Officer and                          
|      | Principal Accounting Officer                             
|Date: | May 15, 2001