.


                    TEXTAINER FINANCIAL SERVICES CORPORATION
                        650 California Street, 16th Floor
                             San Francisco, CA 94108


May 14, 1998


Securities and Exchange Commission
Washington, DC  20549

Gentlemen:

Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,  we are
submitting  herewith  for  filing on behalf of TCC  Equipment  Income  Fund (the
"Company")  the  Company's  Quarterly  Report on Form 10-Q for the First Quarter
ended March 31, 1998.

This filing is being effected by direct  transmission to the Commission's  EDGAR
System.

Sincerely,

Nadine Forsman
Controller
<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                               Washington DC 20549



                                    FORM 10Q



                 QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                  For the quarterly period ended March 31, 1998


                         Commission file number 0-17688


                            TCC EQUIPMENT INCOME FUND
                        A California Limited Partnership
             (Exact name of Registrant as specified in its charter)


          California                                             94-3045888
  (State or other jurisdiction                                  (IRS Employer
of incorporation or organization)                            Identification No.)

650 California Street, 16th Floor
San Francisco, CA                                                   94108
(Address of Principal Executive Offices)                          (ZIP Code)

                                 (415) 434-0551
              (Registrant's telephone number, including area code)


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 [ ]





<PAGE>



 .


                            TCC EQUIPMENT INCOME FUND
                       (a California Limited Partnership)

                      Quarterly Report on Form 10Q for the
                          Quarter Ended March 31, 1998

                                Table of Contents


<TABLE>
<CAPTION>
                                                                                                               Page

Item 1.   Financial Statements

<S>       <C>                                                                                                 <C>
          Balance Sheets - March 31, 1998 (unaudited) and December 31, 1997.................................    3


          Statements of Earnings for the three months
          ended March 31, 1998 and 1997 (unaudited).........................................................    4


          Statements of Partners' Capital for the three months
          ended March 31, 1998 and 1997 (unaudited).........................................................    5


          Statements of Cash Flows for the three months
          ended March 31, 1998 and 1997 (unaudited).........................................................    6


          Notes to Financial Statements (unaudited).........................................................    8


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




</TABLE>
<PAGE>


                                       TCC EQUIPMENT INCOME FUND
                                   (a California Limited Partnership)

                                             Balance Sheets

                                  March 31, 1998 and December 31, 1997
                                         (Amounts in thousands)


<TABLE>
<CAPTION>
                                                                             1998               1997
                                                                        -------------       -------------
                                                                          (unaudited)
<S>                                                                    <C>                 <C>
Assets
Container rental equipment, net of accumulated
   depreciation of $9,737 (1997:  $9,854)                                   $ 15,241            $ 15,874
Cash                                                                           1,776               1,166
Net investment in direct financing leases (note 9)                                49                 129
Accounts receivable, net of allowance for doubtful
   accounts of $189 (1997:  $635) (note 10)                                    1,351               1,342
Due from affiliates, net (note 7)                                                  -                   8
Prepaid expenses                                                                  41                  41
                                                                        -------------       -------------

                                                                            $ 18,458            $ 18,560
                                                                        =============       =============

Liabilities and Partners' Capital
Liabilities:
   Accounts payable                                                            $ 133               $ 130
   Accrued liabilities                                                            10                   7
   Accrued recovery costs (note 2)                                                 9                  28
   Accrued damage protection plan costs (note 3)                                  98                 101
   Accrued maintenance and repair costs (note 4)                                  16                  47
   Warranty claims (note 5)                                                      180                 196
   Due to affiliates, net (note 7)                                               146                   -
                                                                        -------------       -------------

       Total liabilities                                                         592                 509
                                                                        -------------       -------------

Partners' capital:
   General partners                                                              (36)                (36)
   Limited partners                                                           17,902              18,087
                                                                        -------------       -------------

       Total partners' capital                                                17,866              18,051
                                                                        -------------       -------------


                                                                            $ 18,458            $ 18,560
                                                                        =============       =============


See accompanying notes to financial statements


</TABLE>
<PAGE>


                            TCC EQUIPMENT INCOME FUND
                       (a California Limited Partnership)

                             Statements of Earnings

                  For the three months ended March 31, 1998 and
               1997 (Amounts in thousands except for unit and per
                                  unit amounts)
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                             1998                       1997
                                                                      -------------------        -------------------
<S>                                                                    <C>                        <C>    
Rental income                                                                 $    1,173                $     1,207
                                                                      -------------------        -------------------

Costs and expenses:
   Direct container expenses                                                         246                        184
   Bad debt (benefit) provision                                                      (14)                        11
   Depreciation                                                                      336                        363
   Professional fees                                                                   6                          7
   Management fees to affiliates (note 7)                                             86                        116
   General and administrative costs to affiliates (note 7)                            74                         79
   Other general and administrative costs                                             14                         14
                                                                      -------------------        -------------------

                                                                                     748                        774
                                                                      -------------------        -------------------

   Income from operations                                                            425                        433
                                                                      -------------------        -------------------

Other income:
   Interest income                                                                    18                         14
   Gain on sale of containers  (note 11)                                             116                         78
                                                                      -------------------        -------------------

                                                                                     134                         92
                                                                      -------------------        -------------------

    Net earnings                                                              $      559                $       525
                                                                      ===================        ===================

Allocation of net earnings (note 7):
   General partners                                                           $        8                $         8
   Limited partners                                                                  551                        517
                                                                      -------------------        -------------------

                                                                              $      559                $       525
                                                                      ===================        ===================
Limited partners' per unit share
   of net earnings                                                            $     0.37                $      0.35
                                                                      ===================        ===================

Limited partners' per unit share
   of distributions                                                           $     0.50                $      0.50
                                                                      ===================        ===================

Weighted average number of limited
   partnership units outstanding                                               1,471,779                  1,471,779
                                                                      ===================        ===================



See accompanying notes to financial statements

</TABLE>
<PAGE>


                            TCC EQUIPMENT INCOME FUND
                       (a California Limited Partnership)

                         Statements of Partners' Capital

               For the three months ended March 31, 1998 and 1997
                             (Amounts in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                Partners' Capital
                                             --------------------------------------------------------
                                               General              Limited               Total
                                             -------------       ---------------      ---------------
<S>                                           <C>                <C>                  <C>     
Balances at January 1, 1997                         $ (36)             $ 19,248             $ 19,212

Distributions                                          (8)                 (736)                (744)

Net earnings                                            8                   517                  525
                                             -------------       ---------------      ---------------

Balances at March 31, 1997                          $ (36)             $ 19,029             $ 18,993
                                             =============       ===============      ===============

Balances at January 1, 1998                         $ (36)             $ 18,087             $ 18,051

Distributions                                          (8)                 (736)                (744)

Net earnings                                            8                   551                  559
                                             -------------       ---------------      ---------------

Balances at March 31, 1998                          $ (36)             $ 17,902             $ 17,866
                                             =============       ===============      ===============





See accompanying notes to financial statements

</TABLE>
<PAGE>


                            TCC EQUIPMENT INCOME FUND
                       (a California Limited Partnership)

                            Statements of Cash Flows

               For the three months ended March 31, 1998 and 1997
                             (Amounts in thousands)
                                   (unaudited)
<TABLE>
<CAPTION>


                                                                                1998                 1997
                                                                            --------------       --------------
<S>                                                                         <C>                  <C>
Cash flows from operating activities:
      Net earnings                                                                  $ 559                $ 525
      Adjustments to reconcile net earnings to
        net cash provided by operating activities:
         Depreciation                                                                 336                  363
         Decrease in allowance for doubtful accounts, excluding
            write-off (note 10)                                                       (55)                  (4)
         Gain on sale of containers (note 11)                                        (116)                 (78)
         Changes in assets and liabilities:
             Decrease (increase) in accounts receivable, excluding
                write-off (note 10)                                                    46                   (4)
             Proceeds from principal payments of
                direct financing leases                                                91                   65
             Increase in due to affiliates, net                                        98                  967
             Decrease in prepaid expenses                                               -                    4
             Increase (decrease) in accounts payable and
                accrued liabilities                                                     6                  (15)
             (Decrease) increase in accrued recovery costs                            (19)                   2
             Decrease in accrued damage protection plan costs                          (3)                 (10)
             Decrease in maintenance and repair costs                                 (31)                 (11)
             Decrease in warranty claim                                               (16)                 (16)
                                                                            --------------       --------------


                Net cash provided by operating activities                             896                1,788
                                                                            --------------       --------------

Cash flows from investing activities:
      Proceeds from sale of containers                                                470                  377
      Container purchases                                                             (12)                (954)
                                                                            --------------       --------------

                Net cash provided by (used in) investing activities                   458                 (577)
                                                                            --------------       --------------

Cash flows from financing activities:
      Distributions to partners                                                      (744)                (744)
                                                                            --------------       --------------

                Net cash used in financing activities                                (744)                (744)
                                                                            --------------       --------------

Net increase in cash                                                                  610                  467

Cash at beginning of period                                                         1,166                1,253
                                                                            --------------       --------------

Cash at end of period                                                             $ 1,776              $ 1,720
                                                                            ==============       ==============



See accompanying notes to financial statements


</TABLE>
<PAGE>




                            TCC EQUIPMENT INCOME FUND
                       (a California Limited Partnership)


                       Statements Of Cash Flows--Continued

               For the three months ended March 31, 1998 and 1997
                             (Amounts in thousands)
                                   (unaudited)

Supplemental Disclosures:

Supplemental schedule of non-cash investing and financing activities:

The following table summarizes the amounts of container purchases, distributions
to partners,  and proceeds  from sale of  containers  which had not been paid or
received  as of March  31,  1998 and  1997,  and  December  31,  1997 and  1996,
resulting in  differences  in amounts  recorded and amounts of cash disbursed or
received by the  Partnership,  as shown in the  Statements of Cash Flows for the
three-month periods ended March 31, 1998 and 1997.
<TABLE>
<CAPTION>

                                                                Mar. 31       Dec. 31          Mar. 31       Dec. 31
                                                                   1998          1997             1997          1996
                                                            -----------    -----------    ------------     ----------
<S>                                                         <C>            <C>            <C>              <C>
Container purchases included in:
     Due to affiliates..............................         $        -    $       12      $        10      $      1
     Container purchases payable....................                  -             -              377           269

Distributions to partners included in:
     Due to affiliates..............................                  2             2                2             2

Proceeds from sale of containers included in:
     Due from affiliates............................                228           296              313           327

The following table summarizes the amounts of container purchases, distributions
to partners and proceeds from sale of containers recorded by the Partnership and
the amounts  paid or received as shown in the  Statements  of Cash Flows for the
three-month periods ended March 31, 1998 and 1997.

                                                                                                 1998            1997
                                                                                                 ----            ----

Container purchases recorded......................................................           $      -       $  1,071
Container purchases paid..........................................................                 12            954

Distributions to partners declared................................................                744            744
Distributions to partners paid....................................................                744            744

Proceeds from sale of containers recorded.........................................                402            363
Proceeds from sale of containers received.........................................                470            377


See accompanying notes to financial statements




</TABLE>
<PAGE>

                            TCC EQUIPMENT INCOME FUND
                       (a California Limited Partnership)

                          Notes To Financial Statements

               For the three months ended March 31, 1998 and 1997
               (Amounts in thousands except for per unit amounts)
                                   (unaudited)


Note 1.   General

      TCC  Equipment  Income  Fund  (the  Partnership),   a  California  limited
      partnership  with a maximum  life of 20  years,  was  formed in 1987.  The
      Partnership owns and leases a fleet of intermodal  marine cargo containers
      which are leased to international shipping lines.

      The accompanying  interim comparative  financial  statements have not been
      audited by an independent  public  accountant.  However,  all  adjustments
      (which  were only  normal and  recurring  adjustments)  which are,  in the
      opinion of management,  necessary to fairly present the financial position
      of the  Partnership  as of March 31, 1998 and December  31, 1997,  and the
      results of its operations, changes in partners' capital and cash flows for
      the three-month periods ended March 31, 1998 and 1997, have been made.

      The financial  information  presented herein should be read in conjunction
      with  the  audited  financial  statements  and  other  accompanying  Notes
      included in the Partnership's  annual audited  financial  statements as of
      December 31, 1997 in the Annual Report filed on Form 10K.

      Certain   estimates  and  assumptions  were  made  by  the   Partnership's
      management that affect the reported  amounts of assets and liabilities and
      disclosures  of  contingent  assets  and  liabilities  at the  date of the
      financial  statements  and the  reported  amounts of revenue and  expenses
      during the  reporting  period.  Actual  results  could  differ  from those
      estimates.

Note 2.   Recovery Costs

      The  Partnership  accrues an estimate  for  recovery  costs as a result of
      defaults under its leases that it expects to incur, which are in excess of
      estimated insurance proceeds. At March 31, 1998 and December 31, 1997, the
      amounts accrued were $9 and $28, respectively.

Note 3.   Damage Protection Plan

      The  Partnership  offers a Damage  Protection Plan (DPP) to lessees of its
      containers.  Under  the terms of DPP,  the  Partnership  earns  additional
      revenues  on a daily  basis  and,  in return,  has agreed to bear  certain
      repair costs.  It is the  Partnership's  policy to recognize  revenue when
      earned  and to  provide a reserve  sufficient  to cover the  Partnership's
      obligation for estimated future repair costs. DPP expenses are included in
      direct container expenses in the Statements of Earnings,  and at March 31,
      1998  and  December  31,  1997,  the  related  reserve  was $98 and  $101,
      respectively.

Note 4.   Maintenance and Repair

      The Partnership accrues maintenance and repair costs on damaged containers
      in depots. At March 31, 1998 and December 31, 1997, the amount accrued was
      $16 and $47, respectively.

Note 5.   Warranty Claims

      During 1992 and 1995, the Partnership  settled  warranty claims against an
      equipment manufacturer relating to certain containers.  The Partnership is
      amortizing the settlement amounts over the remaining estimated useful life
      of these containers (seven years),  reducing  maintenance and repair costs
      over that time. At March 31, 1998 and December 31, 1997,  the  unamortized
      portion of the settlement amount was equal to $180 and $196, respectively.

Note 6.   Acquisition of Containers

      Primarily  because  the  Partnership  is now in its  tenth  full  year  of
      operations,  the Partnership will no longer purchase additional containers
      effective January 1, 1998.  During the three-month  period ended March 31,
      1997, the Partnership purchased containers with a cost of $1,071.

Note 7.   Transactions with Affiliates

      Textainer  Financial  Services  Corporation  (TFS) is the managing general
      partner of the Partnership.  TFS is a wholly-owned subsidiary of Textainer
      Capital Corporation (TCC).  Textainer  Equipment  Management Limited (TEM)
      and  Textainer   Limited  (TL)  are  associate  general  partners  of  the
      Partnership.  The  managing  general  partner  and the  associate  general
      partners are collectively referred to as the General Partners. The General
      Partners  also  act in  this  capacity  for  other  limited  partnerships.
      Textainer  Acquisition  Services  Limited  (TAS)  is an  affiliate  of the
      General  Partners which performs  services  relative to the acquisition of
      containers  outside the United States on behalf of the  Partnership.  TCC,
      TEM, TL and TAS are  subsidiaries  of  Textainer  Group  Holdings  Limited
      (TGH).  The  General  Partners  manage  and  control  the  affairs  of the
      Partnership.

      In  accordance  with the  Partnership  Agreement,  and  subject to special
      allocations  described  therein,  net  earnings or losses and  partnership
      distributions  are generally  allocated 1% to the General Partners and 99%
      to the  limited  partners,  with  the  exception  of  gains  on  sales  of
      containers. Such gains are allocated to the General Partners to the extent
      that their capital  accounts'  deficits  exceed the portion of syndication
      and offering costs  allocated to them. On termination of the  Partnership,
      the  General  Partners  shall be  allocated  gross  income  equal to their
      allocations of syndication and offering costs.

      As part of the operation of the Partnership,  the Partnership is to pay to
      the General Partners,  or TAS, an incentive management fee, an acquisition
      fee, an equipment  management fee and an equipment  liquidation fee. These
      fees  are  for  various   services   provided  in   connection   with  the
      administration and management of the Partnership. The Partnership incurred
      $31 of incentive  management fees  during  both  the  three-month  periods
      ended March 31, 1998 and 1997.  There were no equipment  acquisition  fees
      incurred  during  the  three-month   period  ended  March  31,  1998.  The
      Partnership  capitalized  $46 of  equipment  acquisition  fees  as part of
      container  costs during the  three-month  period ended March 31, 1997.  No
      equipment liquidation fees were incurred during either period.

      The  Partnership's  container  fleet  is  managed  by TEM.  In its role as
      manager,  TEM has  authority to acquire,  hold,  manage,  lease,  sell and
      dispose of the  Partnership's  containers.  TEM holds,  for the payment of
      direct operating expenses,  a reserve of cash that has been collected from
      leasing  operations;  such cash is included in due to  affiliates,  net at
      March 31, 1998 and due from affiliates, net at December 31,1997.

      Subject to certain reductions, TEM receives a monthly equipment management
      fee equal to 7% of gross revenues  attributable to operating leases and 2%
      of  gross  revenues  attributable  to  full  payout  net  leases.  For the
      three-month  periods ended March 31, 1998 and 1997, these fees totaled $55
      and $85, respectively.  The Partnership's container fleet is leased by TEM
      to third party  lessees on operating  master  leases,  spot  leases,  term
      leases and direct  finance  leases.  The  majority of the  container fleet
      is are leased under operating master leases  with  limited  terms  and  no
      purchase option.

      Certain  indirect  general  and  administrative  costs  such as  salaries,
      employee  benefits,   taxes  and  insurance  are  incurred  in  performing
      administrative  services  necessary to the  operation of the  Partnership.
      These  costs  are  incurred  and paid by TFS and TEM.  Total  general  and
      administrative costs allocated to the Partnership were $74 and $79 for the
      three-month periods ended March 31, 1998 and 1997, respectively,  of which
      $35 and $41 were for salaries.

      TEM allocates these general and administrative costs based on the ratio of
      the  Partnership's  interest  in  the  managed  containers  to  the  total
      container  fleet  managed by TEM during the period.  TFS  allocates  these
      costs  based on the  ratio of the  Partnership's  containers  to the total
      container fleet of all limited  partnerships  managed by TFS.  General and
      administrative  costs allocated to the Partnership by TEM were $67 and $69
      for the three-month  periods ended March 31, 1998 and 1997,  respectively.
      TFS  allocated  $7 and $10 of  general  and  administrative  costs  to the
      Partnership during the same periods.

      The General  Partners or TAS may acquire  containers in their own name and
      hold  title on a  temporary  basis for the  purpose  of  facilitating  the
      acquisition  of such  containers for the  Partnership.  The containers may
      then be resold to the Partnership on an all-cash basis at a price equal to
      the actual cost, as defined in the Partnership Agreement. In addition, the
      General  Partners  or TAS  are  entitled  to an  acquisition  fee  for any
      containers resold to the Partnership.

      At March 31, 1998 and December 31, 1997, due (to) from affiliates,  net is
      comprised of:

                                                            1998            1997
                                                            ----            ----
      Due from affiliates:
       Due from TEM...................................    $    -         $    38
                                                          ------          ------

      Due to affiliates:
       Due to TEM.....................................       122               -
       Due to TCC.....................................        12               4
       Due to TAS.....................................         -              13
       Due to TFS.....................................        12              13
                                                          ------          ------
                                                             146              30
                                                          ------          ------

      Due (to) from affiliates, net                       $ (146)        $     8
                                                           =====          ======

      These amounts  receivable  from and payable to affiliates were incurred in
      the ordinary course of business between the Partnership and its affiliates
      and represent timing differences in the accrual and remittance of expenses
      and fees  described  above or in the accrual and  remittance of net rental
      revenues from TEM.

      It is the policy of the  Partnership  and the  General  Partners to charge
      interest on amounts due to the General  Partners which are outstanding for
      more than one  month,  to the  extent  such  balances  relate to loans for
      container  purchases.  Interest is charged at a rate not greater  than the
      General Partners' or affiliates' own cost of funds.  There was no interest
      expense   incurred  on  amounts  due  to  the  General  Partners  for  the
      three-month periods ended March 31, 1998 and 1997.

Note 8.   Rentals Under Operating Leases

      The following are the future  minimum rent  receivables  under  cancelable
      long-term  operating  leases at March 31,  1998.  Although  the leases are
      generally  cancelable  at  the  end of  each  twelve-month  period  with a
      penalty,  the  following  schedule  assumes  that the  leases  will not be
      terminated.

              Year ending March 31:

              1999.............................................           $  207
              2000.............................................               14
              2001.............................................                5
                                                                            ----

              Total minimum future rentals receivable..........           $  226
                                                                            ====

Note 9.   Direct Financing Leases

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

                                                              1998         1997
                                                              ----         ----

      Future minimum lease payments receivable............    $ 56        $ 135
      Residual value......................................       2            2
      Less:  unearned income..............................      (9)          (8)
                                                              ----        -----

      Net investment in direct financing leases...........    $ 49        $ 129
                                                              ====        =====

      The following is a schedule by year of minimum lease  payments  receivable
      under the three direct financing leases as of March 31, 1998:

            Year ending March 31:

            1999...............................................           $  47
            2000...............................................               6
            2001...............................................               3
                                                                           ----

            Total minimum lease payments receivable............           $  56
                                                                           ====

      Rental income for the three-month periods  ended  March 31,  1998 and 1997
      includes $5 and $28, respectively, of income from direct financing leases.

Note 10.   Accounts Receivable Write-Off

      During the  three-month  period  ending  March 31, 1998,  the  Partnership
      wrote-off $391 of delinquent  receivables  from two lessees  against which
      reserves were recorded in 1994 and 1995.

Note 11.   Insurance Proceeds

      In February 1998, the Partnership wrote-off 15 containers held by a lessee
      that were deemed  unrecoverable.  These containers had a net book value of
      $117  for  which  the  Partnership  received  insurance  proceeds  of $145
      resulting in a gain of $28.

Note 12.   Redemptions

      The Partnership  did not redeem any units during the  three-month  periods
      ended March 31, 1998 or 1997.  The total  number of units  redeemed  since
      inception  of the  redemption  program  is 2,775,  at a total cost of $23,
      representing an average redemption price of $8.31 per unit. The redemption
      price is fixed by formula.




<PAGE>




ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

           (Amounts in thousands except for unit and per unit amounts)

The Financial Statements contain information which will assist in evaluating the
financial  condition of the Partnership for the three-month  periods ended March
31, 1998 and 1997. Please refer to the Financial Statements and Notes thereto in
connection with the following discussion.

Liquidity and Capital Resources

From  October  1987  until  October  1989,  the   Partnership   offered  limited
partnership  interests  to the  public.  The  Partnership  received  its minimum
subscription  amount of $1,000 on April 8, 1988,  and on October 26,  1989,  the
Partnership's offering of limited partnership interests was closed at $29,491.

From time to time,  the  Partnership  redeems units from limited  partners for a
specified   redemption  value  which  is  set  by  formula.  Up  to  2%  of  the
Partnership's outstanding units may be redeemed each year, although the 2% limit
may be exceeded at the managing general  partner's  discretion.  All redemptions
are subject to the managing  general  partner's  good faith  determination  that
payment for the redeemed units will not (i) cause the Partnership to be taxed as
a  corporation,  (ii) impair the capital or  operations of the  Partnership,  or
(iii) impair the ability of the Partnership to pay  distributions  in accordance
with its  distribution  policy.  During the  three-month  period ended March 31,
1998, the Partnership did not redeem any units.

The Partnership  invests working capital and cash flow from operations  prior to
its  distribution  to  the  partners  in  short-term,  liquid  investments.  The
Partnership's  cash is  affected  by  cash  provided  by or  used in  operating,
investing and financing  activities.  These  activities  are discussed in detail
below.

During the  three-month  period ended March 31, 1998, the  Partnership  declared
cash distributions to limited partners pertaining to the fourth quarter of 1997,
in the amount of $736. These distributions represent a return of 10% on original
capital  (measured on an annualized basis) on each unit. On a cash basis, all of
these  distributions  were  from  operations.  On a GAAP  basis,  $185 of  these
distributions were a return of capital and the balance was from net income.

Net cash provided by operating  activities  for the  three-month  periods ending
March 31, 1998 and 1997,  was $896 and  $1,788,  respectively.  The  decrease of
$892, or 50%, is primarily attributable to an increase in due to affiliates, net
resulting  from timing  differences  in payment of  expenses  and fees and or in
remittance of net rental revenues.

For the three-month period ending March 31, 1998, net cash provided by investing
activities  (the purchase and sale of containers)  was $458 compared to net cash
used in investing activities of $577 for the comparable period in 1997. Net cash
provided by investing activities increased $1,035 primarily due to the fact that
the Partnership is no longer  purchasing  containers.  The General Partners have
determined  that it is in the best  interest  of the  Partnership  to no  longer
purchase additional containers, as the Partnership is now in its ninth full year
of operations.  The Partnership  intends to use the anticipated  cash from sales
proceeds  to  redeem  limited   partnership  units  and  or  make  special  cash
distributions.

Results of Operations

The  Partnership's  income from operations,  which consists  primarily of rental
income, container depreciation,  direct container expenses, management fees, and
reimbursement of administrative expenses was directly related to the size of the
container fleet during the three-month periods ended March 31, 1998 and 1997, as
well as certain other factors as discussed  below. The following is a summary of
the container fleet (in units) available for lease during those periods:

                                                               1998        1997

                   Opening container fleet.................    7,887      7,849
                   Closing container fleet.................    7,626      7,983
                   Average container fleet.................    7,757      7,916

The decline in the average  container  fleet of 2% from the three  months  ended
March 31, 1997 to the  equivalent  period in 1998 resulted from the  Partnership
having sold more  containers  than it purchased  since March 31,  1997.  Average
fleet size will continue to decline as the  Partnership  sells  containers  that
have  reached  the  end of  their  useful  lives  since,  as  noted  above,  the
Partnership does not plan to invest sales proceeds in additional containers. The
decline in the container  fleet has  contributed to an overall decline in rental
income from the  three-month  period  ending  March 31,  1997 to the  equivalent
period in 1998 and will likely continue to do so in future years.

Rental income and direct container expenses are also affected by the utilization
of the container fleet,  which was 81% and 78% on average during the three-month
periods ended March 31, 1998 and 1997, respectively.  In addition, rental income
is affected by daily rental rates and leasing incentives.

The  following is a comparative  analysis of the results of  operations  for the
three-month periods ended March 31, 1998 and 1997.

The  Partnership's  income from  operations for the  three-month  periods ending
March 31, 1998 and 1997 was $425 and $433,  respectively,  on rental  income  of
$1,173 and $1,207,  respectively.  The decrease in rental  income of $34, or 3%,
from the  three-month  period ended March 31, 1997 to the  comparable  period in
1998 was primarily  attributable to a decrease in income from container rentals,
the major component of total revenue,  which decreased $94, or 9%. This decrease
was primarily due to the decrease in average rental rates of 6% and the decrease
in the average  container fleet of 2%, and was offset by the increase in average
on-hire (utilization) percentage of 4% and the decrease in leasing incentives of
14%.

Container  utilization  and rental rates declined during 1996 and 1997 primarily
due to decreased  demand for leased  containers and increased  competition.  The
decrease in demand for leased  containers  resulted from changes in the business
of shipping line customers consisting  primarily of (i) over-capacity  resulting
from the 1995 and 1996 additions of new, larger ships to the existing  container
ship fleet at a rate in excess of the growth rate in containerized  cargo trade;
(ii) shipping  line  alliances and other  operational  consolidations  that have
allowed  shipping  lines to operate with fewer  containers;  and (iii)  shipping
lines  reducing  their ratio of leased  versus owned  containers  by  purchasing
containers.  This decreased demand,  along with the entry of new leasing company
competitors  offering low container rental rates to shipping lines,  resulted in
downward  pressure on rental rates, and caused leasing companies to offer higher
leasing incentives and other discounts to shipping lines. Rental rates were also
adversely  affected  by a drop in the  purchase  price of new  containers  which
resulted in additional downward pressure on rental rates.

Utilization  increased  during the second and third  quarters  of 1997 and began
declining  again during the fourth quarter of 1997 and into the first quarter of
1998.  Despite  these  declines,  utilization  for the first quarter of 1998 was
greater than the average  first  quarter 1997  utilization  and greater than the
average  utilization  for  the  year  ended  December  31,  1997.  Rental  rates
stabilized during the later half of the first quarter of 1998 and, overall, were
comparable to fourth  quarter 1997 rental rates.  Leasing  incentives  reached a
high during  mid-1997,  began declining during the second half of 1997, and have
stabilized  during the first quarter of 1998. The improvement in utilization and
the  stabilization  in rental rates and leasing  incentives are primarily due to
increased demand in Asia. The weakening of many Asian  currencies  resulted in a
significant increase in exports which has created a strong demand for containers
in Asia. The General Partners believe that market conditions have stabilized and
may be slowly improving; however, for the near term, the General Partners do not
foresee any material changes in existing market conditions and caution that both
utilization  and lease  rates  could  decline  again,  adversely  affecting  the
Partnership's operating results.

Substantially  all of the  Partnership's  rental income was  generated  from the
leasing of the  Partnership's  containers under short-term  operating leases. At
March  31,  1998 and  1997,  there  were  121 and 108  containers  under  direct
financing leases, respectively.

The  balance of other  rental  income  consists  of other  lease-related  items,
primarily  income from charges to lessees for picking up containers from surplus
locations  less  credits  granted to lessees  for leasing  containers  from less
desirable  locations  (location  income),  income  for  handling  and  returning
containers  and income  from  charges to lessees  for a Damage  Protection  Plan
(DPP).  For the three  months  ended  March 31,  1998,  the total of these other
rental income items was $178, an increase of $60 from the  equivalent  period in
1997. The primary  component of this increase was an increase in location income
of $69.  Location  income  increased  due to the  inclusion  of certain  credits
received  during  1997  and  1998  which  had been  previously  applied  against
repositioning expense and also due to an increase in the average drop-off charge
per  container  and a decrease in credits given to lessees to pick up containers
from certain locations.

Direct  container  expenses  increased $62, or 34%, for the  three-month  period
ending March 31, 1998 compared to the  equivalent  period in 1997.  The increase
was  primarily  due to an  increase  in  repositioning  expense  of  $71,  which
increased  due to the removal of certain  credits  from  repositioning  costs to
other rental income as discussed above and due to a greater number of containers
being transported from surplus locations to demand locations.

Bad debt  expense  decreased  from an expense of $11 for the three  months ended
March 31, 1997 to a benefit of $14 for the  comparable  period  ending March 31,
1998. The benefit recorded in 1998 was primarily due to the Partnership  writing
off certain receivables that had reserves in excess of the receivable.

Depreciation  expense decreased $27, or 7%, between the three-month period ended
March 31, 1998 and 1997 primarily due to the smaller  average fleet size and due
to certain containers acquired used, which have now been fully depreciated.

Management fees to affiliates decreased $30, or 26%, from the three-month period
ended  March  31,  1997 to the  comparable  period  ending  in  1998,  due to an
adjustment  made to reduce fees resulting from the write-off of receivables  for
two lessees and due to the decrease in rental income upon which  equipment  fees
are based.

General and  administrative  costs to  affiliates  decreased $5, or 6%, from the
three-month  period ended March 31, 1997 to the comparable period ending in 1998
due to a decrease in overhead costs allocated by TFS and TEM.

Other income increased $42, or 46%, primarily due to an increase in gain on sale
of containers of $38 between the  three-month  periods ending March 31, 1998 and
1997.  Gain on sale of  containers  increased  primarily  due the  write-off  of
certain containers held by a lessee that were deemed unrecoverable for which the
Partnership  received  insurance  proceeds for these containers in excess of net
book value.

Net earnings per limited partnership unit increased from $0.35 to $0.37 from the
three-month  period  ending March 31, 1997  compared to the same period in 1998,
reflecting  the  increase  in limited  partner net  earnings  from $517 to $551,
respectively.

Many computer systems may experience difficulty processing dates beyond the year
1999 and, as such, some computer  hardware and software will need to be modified
prior to the year 2000 to remain  functional.  Certain of the  Partnership's and
General  Partner's core internal systems that have recently been implemented are
year 2000  compliant.  The remaining  core internal  systems are scheduled to be
revised  to be year  2000  compliant  by the end of 1998.  Based on its  initial
evaluation,  the  Partnership  and the General  Partners do not believe that the
cost of remedial  actions relating to these systems will have a material adverse
effect on the  Partnership's  results of  operations  and  financial  condition.
Additionally,  the  Partnership  and the General  Partners are also completing a
preliminary  assessment  of year 2000  issues not  related to its core  systems,
including issues surrounding systems that interface with external third parties.

Although  substantially  all of the  Partnership's  income  from  operations  is
derived from assets employed in foreign operations, virtually all of this income
is  denominated  in United  States  dollars.  The  Partnership's  customers  are
international  shipping  lines  which  transport  goods on  international  trade
routes.  The  domicile  of the lessee is not  indicative  of where the lessee is
transporting  the  containers.  The  Partnership's  business risk in its foreign
operations lies with the  creditworthiness of the lessees, and the Partnership's
ability to keep its containers under lease,  rather than the geographic location
of the  containers or the domicile of the lessees.  The containers are generally
operated on the international high seas rather than on domestic  waterways.  The
containers are subject to the risk of war or other political, economic or social
occurrence  where  the  containers  are used,  which  may  result in the loss of
containers,  which,  in turn,  may have a material  impact on the  Partnership's
results of operations  and  financial  condition.  The General  Partners are not
aware of any  conditions  as of March 31, 1998 which would result in such a risk
materializing.

Other risks of the Partnership's  leasing  operations include  competition,  the
cost of  repositioning  containers  after  they come  off-lease,  the risk of an
uninsured  loss,  increases in maintenance  expenses or other costs of operating
the  containers,  and the effect of world trade,  industry trends and/or general
business and economic cycles on the Partnership's operations. See "Risk Factors"
in the Partnership's Prospectus, as supplemented,  for additional information on
risks of Partnership's business.



<PAGE>

                                   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.


                                     TCC EQUIPMENT INCOME FUND
                                     A California Limited Partnership

                                     By Textainer Financial Services Corporation
                                     The Managing General Partner



                                     By _______________________________
                                        John R. Rhodes
                                        Executive Vice President


Date:  May 14, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Textainer  Financial
Services  Corporation,  the Managing  General Partner of the Registrant,  in the
capacities and on the dates indicated:

<TABLE>
<CAPTION>

Signature                                Title                                          Date


<S>                                      <C>                                           <C>
________________________                 Executive Vice President,                      May 14, 1998
John R. Rhodes                           (Principal Financial and
                                         Accounting Officer) and
                                         Secretary




________________________                 President (Principal Executive                 May 14, 1998
Philip K. Brewer                         Officer)


</TABLE>
<PAGE>



                                   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.


                                     TCC EQUIPMENT INCOME FUND
                                     A California Limited Partnership

                                     By Textainer Financial Services Corporation
                                     The Managing General Partner



                                     By /s/John R. Rhodes
                                        _______________________________
                                        John R. Rhodes
                                        Executive Vice President


Date:  May 14, 1998


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Textainer  Financial
Services  Corporation,  the Managing  General Partner of the Registrant,  in the
capacities and on the dates indicated:

<TABLE>
<CAPTION>

Signature                                   Title                                             Date




<S>                                      <C>                                            <C> 
/s/John R. Rhodes                        Executive Vice President,                      May 14, 1998
________________________                 (Principal Financial and
John R. Rhodes                           Accounting Officer) and
                                         Secretary



/s/Philip K. Brewer                      President (Principal Executive                 May 14, 1998
________________________                 Officer)
Philip K. Brewer                         

</TABLE>