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


August 13, 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 10Q for the Second  Quarter
ended June 30, 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 June 30, 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>
<TABLE>
<CAPTION>

TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)

Quarterly Report on Form 10Q for the
Quarter Ended June 30, 1998

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



                                                                                                               Page

<S>  <C>                                                                                                       <C>
Item 1.   Financial Statements

          Balance Sheets - June 30, 1998 (unaudited) and December 31, 1997..................................    3


          Statements of Earnings for the three and six months
          ended June 30, 1998 and 1997 (unaudited)..........................................................    4


          Statements of Partners' Capital for the six months
          ended June 30, 1998 and 1997 (unaudited)..........................................................    5


          Statements of Cash Flows for the six months
          ended June 30, 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.........................................................................   13



</TABLE>
<PAGE>
<TABLE>
<CAPTION>

TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)

Balance Sheets

June 30, 1998 and December 31, 1997
(Amounts in thousands)
-------------------------------------------------------------------------------------------------------------


                                                                               1998                 1997
                                                                           -------------        -------------
                                                                            (unaudited)
<S><C>                                                                  <C>                   <C>
Assets
Container rental equipment, net of accumulated
   depreciation of $9,600 (1997:  $9,854)                                $       14,614       $       15,874
Cash                                                                              2,191                1,166
Net investment in direct financing leases  (note 9)                                  17                  129
Accounts receivable, net of allowance for doubtful
   accounts of $159 (1997:  $635) (note 10)                                       1,051                1,342
Due from affiliates, net (note 7)                                                    89                    8
Prepaid expenses                                                                     27                   41
                                                                           -------------        -------------

                                                                         $       17,989       $       18,560
                                                                           =============        =============

Liabilities and Partners' Capital
Liabilities:
   Accounts payable                                                      $          106       $          130
   Accrued liabilities                                                               25                    7
   Accrued recovery costs (note 2)                                                   14                   28
   Accrued damage protection plan costs (note 3)                                     95                  101
   Accrued maintenance and repair costs (note 4)                                     25                   47
   Warranty claims (note 5)                                                         164                  196
                                                                           -------------        -------------

       Total liabilities                                                            429                  509
                                                                           -------------        -------------

Partners' capital:
   General partners                                                                 (36)                 (36)
   Limited partners                                                              17,596               18,087
                                                                           -------------        -------------

       Total partners' capital                                                   17,560               18,051
                                                                           -------------        -------------


                                                                         $       17,989       $       18,560
                                                                           =============        =============


See accompanying notes to financial statements



</TABLE>
<PAGE>
<TABLE>
<CAPTION>

TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)

Statements of Earnings

For the three and six months ended June 30, 1998 and 1997 
(Amounts in thousands except for unit and per unit amounts) 
(unaudited)
------------------------------------------------------------------------------------------------------------------------------------


                                                                    Three months     Three months       Six months       Six months
                                                                           Ended            Ended            Ended            Ended
                                                                   June 30, 1998    June 30, 1997    June 30, 1998    June 30, 1997
                                                                   -------------    -------------    -------------    -------------
<S>                                                                <C>              <C>              <C>              <C>
Rental income                                                      $       1,100    $       1,181    $       2,273    $       2,388
                                                                   -------------    -------------    -------------    -------------

Costs and expenses:
   Direct container expenses                                                 218              223              464              407
   Bad debt (benefit) expense                                                (32)              17              (46)              28
   Depreciation                                                              329              389              665              752
   Professional fees                                                          10               14               16               21
   Management fees to affiliates (note 7)                                    110              115              196              231
   General and administrative costs to affiliates (note 7)                    62               78              136              157
   Other general and administrative costs                                     12               14               26               28
                                                                   -------------    -------------    -------------    -------------
                                                                             709              850            1,457            1,624
                                                                   -------------    -------------    -------------    -------------
   Income from operations                                                    391              331              816              764
                                                                   -------------    -------------    -------------    -------------

Other income:
   Interest income                                                            24               15               42               29
   Gain on sale of containers                                                 22               19              138               97
                                                                   -------------    -------------    -------------    -------------
                                                                              46               34              180              126
                                                                   -------------    -------------    -------------    -------------
    Net earnings                                                   $         437    $         365    $         996    $         890
                                                                   =============    =============    =============    =============

Allocation of net earnings (note 7):
   General partners                                                $           7    $           7    $          15    $          15
   Limited partners                                                          430              358              981              875
                                                                   -------------    -------------    -------------    -------------
                                                                   $         437    $         365    $         996    $         890
                                                                   =============    =============    =============    =============
Limited partners' per unit share
   of net earnings                                                 $        0.29    $        0.24    $        0.67    $        0.59
                                                                   =============    =============    =============    =============

Limited partners' per unit share
   of distributions                                                $        0.50    $        0.50    $        1.00    $        1.00
                                                                   =============    =============    =============    =============

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



See accompanying notes to financial statements


</TABLE>
<PAGE>
<TABLE>
<CAPTION>

TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)

Statements of Partners' Capital

For the six months ended June 30, 1998 and 1997
(Amounts in thousands)
(unaudited)
------------------------------------------------------------------------------------------------------


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

Distributions                                             (15)              (1,472)            (1,487)

Net earnings                                               15                  875                890
                                                 -------------      ---------------      -------------

Balances at June 30, 1997                      $          (36)    $         18,651     $       18,615
                                                 =============      ===============      =============

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

Distributions                                             (15)              (1,472)            (1,487)

Net earnings                                               15                  981                996
                                                 -------------      ---------------      -------------

Balances at June 30, 1998                      $          (36)    $         17,596     $       17,560
                                                 =============      ===============      =============



See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>


TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)

Statements of Cash Flows

For the six months ended June 30, 1998 and 1997
(Amounts in thousands)
(unaudited)
-----------------------------------------------------------------------------------------------------------------


                                                                                    1998                1997
                                                                                -------------       -------------
<S><C>                                                                       <C>                 <C>
Cash flows from operating activities:
      Net earnings                                                            $          996      $          890
      Adjustments to reconcile net earnings to
        net cash provided by operating activities:
         Depreciation                                                                    665                 752
         Decrease in allowance for doubtful accounts, excluding
            write-off (note 10)                                                          (85)                 (6)
         Gain on sale of containers                                                     (138)                (97)
         Changes in assets and liabilities:
             Decrease (increase) in accounts receivable, excluding
                write-off (note 10)                                                      376                 (37)
             Proceeds from principal payments of
                direct financing leases                                                  124                 163
             (Increase) decrease in due from affiliates, net                            (199)              1,056
             Decrease in prepaid expenses                                                 14                   7
             (Decrease) increase in accounts payable and
                accrued liabilities                                                       (6)                 72
             (Decrease) increase in accrued recovery costs                               (14)                  1
             Decrease in accrued damage protection plan costs                             (6)                (25)
             (Decrease) increase in maintenance and repair costs                         (22)                  2
             Decrease in warranty claims                                                 (32)                (32)
                                                                                -------------       -------------


                Net cash provided by operating activities                              1,673               2,746
                                                                                -------------       -------------

Cash flows from investing activities:
      Proceeds from sale of containers                                                   856                 698
      Container purchases                                                                (17)             (2,311)
                                                                                -------------       -------------

                Net cash provided by (used in) investing activities                      839              (1,613)
                                                                                -------------       -------------

Cash flows from financing activities:
      Distributions to partners                                                       (1,487)             (1,487)
                                                                                -------------       -------------

                Net cash used in financing activities                                 (1,487)             (1,487)
                                                                                -------------       -------------

Net increase (decrease) in cash                                                        1,025                (354)

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

Cash at end of period                                                         $        2,191      $          899
                                                                                =============       =============



See accompanying notes to financial statements
</TABLE>
<PAGE>

TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)


Statements Of Cash Flows--Continued

For the six months ended June 30, 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 June 30, 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  six-month
periods ended June 30, 1998 and 1997.

<TABLE>
<CAPTION>
                                                               Jun. 30        Dec. 31         Jun. 30        Dec. 31
                                                                  1998           1997            1997           1996
                                                            ----------     ----------      ----------     ----------
<S><C>                                                     <C>              <C>            <C>             <C>
Container purchases included in:
     Due to affiliates..............................         $       -     $       12      $       12      $       1
     Container purchases payable....................                 -              -             335            269

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

Proceeds from sale of containers included in:
     Due from affiliates............................               166            296             393            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
six-month periods ended June 30, 1998 and 1997.

                                                                                                 1998           1997
                                                                                                 ----           ----

Container purchases recorded......................................................        $         5       $  2,388
Container purchases paid..........................................................                 17          2,311

Distributions to partners declared................................................              1,487          1,487
Distributions to partners paid....................................................              1,487          1,487

Proceeds from sale of containers recorded.........................................                726            764
Proceeds from sale of containers received.........................................                856            698


See accompanying notes to financial statements

</TABLE>
<PAGE>

TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)

Notes To Financial Statements

For the six months ended June 30, 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 June 30, 1998 and December  31,  1997,  and the
      results of its operations, changes in partners' capital and cash flows for
      the three- and six-month  periods ended June 30, 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.

      Certain reclassifications of prior year amounts have been made in order to
      conform with the 1998 financial statement presentation.

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 June 30, 1998 and December 31, 1997, the
      amounts accrued were $14 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 June 30,
      1998  and  December  31,  1997,  the  related  reserve  was $95 and  $101,
      respectively.

Note 4.   Maintenance and Repair

      The Partnership accrues maintenance and repair costs on damaged containers
      in depots.  At June 30, 1998 and December 31,  1997,  the amounts  accrued
      were $25 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 June 30, 1998 and December 31, 1997,  the  unamortized
      portion of the settlement amount was $164 and $196, respectively.

Note 6.   Acquisition of Containers

      Primarily  because  the  Partnership  is now in its  ninth  full  year  of
      operations,  effective  January 1, 1998,  the  Partnership  will no longer
      purchase additional containers. During the six-month period ended June 30,
      1997, the Partnership purchased containers with a cost of $2,388.

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,  net earnings  or losses and
      partnership distributions are 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 and $62 of incentive  management  fees during the three- and six-month
      periods  ended  June 30,  1998 and 1997.  There were no  acquisition  fees
      incurred during the six-month period ending June 30, 1998. The Partnership
      capitalized $110 of container acquisition fees as a component of container
      costs  during the  six-month  period  ended June 30,  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 from affiliates,  net at
      June 30, 1998 and 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-
      and  six-month  periods  ended June 30,  1998,  these fees totaled $79 and
      $134,  respectively,  and $84 and $169,  respectively,  for the comparable
      periods in 1997.  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 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.  For the  three-  and
      six-month  periods ended June 30, 1998,  total general and  administrative
      costs allocated to the  Partnership  were $62 and $136,  respectively,  of
      which $27 and $57 were for  salaries.  Total  general  and  administrative
      costs allocated to the  Partnership  for the three- and six-month  periods
      ended June 30, 1997 were $78 and $157, respectively,  of which $43 and $84
      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 $56 and $122
      for the three- and six-month  periods ended June 30, 1998 and were $66 and
      $135,  respectively,  for the comparable periods in 1997. TFS allocated $6
      and  $14,  respectively,  of  general  and  administrative  costs  to  the
      Partnership  for the three- and six-month  periods ended June 30, 1998 and
      $12 and $22 for the comparable periods in 1997.

      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 June 30,  1998 and  December  31,  1997,  due from  affiliates,  net is
      comprised of:

                                                             1998           1997
                                                             ----           ----
      Due from affiliates:
          Due from TEM...................................   $ 119           $ 38
                                                             ----            ---

      Due to affiliates:
          Due to TCC.....................................      18              4
          Due to TAS.....................................       -             13
          Due to TFS.....................................      12             13
                                                             ----           ----
                                                               30             30
                                                             ----           ----
      Due from affiliates, net                             $   89          $   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- and
      six-month periods ended June 30, 1998 and 1997.

Note 8.   Rentals Under Operating Leases

      The following are the future  minimum rent  receivables  under  cancelable
      long-term  operating  leases at June 30,  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 June 30:

              1999.............................................           $  231
              2000.............................................               24
              2001.............................................                2
                                                                           -----

              Total minimum future rentals receivable..........           $  257
                                                                           =====

Note 9.   Direct Financing Leases

      The  components of the net investment in direct  financing  leases at June
      30, 1998 and December 31, 1997 are as follows:

                                                           1998            1997
                                                           ----            ----

      Future minimum lease payments receivable............ $ 23           $ 135
      Residual value......................................    2               2
      Less:  unearned income..............................   (8)             (8)
                                                           ----            ----

      Net investment in direct financing leases........... $ 17           $ 129
                                                           ====            ====

      The following is a schedule by year of minimum lease  payments  receivable
      under the ten direct financing leases as of June 30, 1998:

             Year ending June 30:

             1999...............................................           $  17
             2000...............................................               4
             2001...............................................               2
                                                                            ----

             Total minimum lease payments receivable............           $  23
                                                                            ====

      Rental  income for the three- and  six-month  periods  ended June 30, 1998
      includes $40 and $45 of income from direct  financing  leases and includes
      $12 and $26 of income  from  direct  financing  leases for the  comparable
      periods in 1997.

Note 10.   Accounts Receivable Write-Off

      During  the  six-month  period  ending  June  30,  1998,  the  Partnership
      wrote-off $391 of delinquent  receivables  from two lessees  against which
      reserves were recorded in 1994 and 1995.

Note 11.   Redemptions

      The  Partnership  did not redeem any units  during the  six-month  periods
      ended June 30,  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- and  six-month  periods
ended June 30, 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 six-month period ended June 30, 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 six-month  period ended June 30, 1998, the Partnership  declared cash
distributions to limited  partners  pertaining to the fourth quarter of 1997 and
the  first  quarter  of 1998,  in the  amount  of  $1,472.  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,  $491 of these  distributions  was a return of capital and the
balance was from net income.

Net cash provided by operating  activities for the six-month periods ending June
30, 1998 and 1997, was $1,673 and $2,746, respectively.  The decrease of $1,073,
or 39%, is primarily  attributable to a fluctuation in due from affiliates,  net
which  increased $199 in the six-month  period ended June 30, 1998 compared to a
decrease of $1,056 in the equivalent  period in 1997.  Fluctuations  in due from
affiliates,  net result from timing  differences in payment of expenses and fees
and/or in the remittance of net rental revenues.

For the six-month  period  ending June 30, 1998,  net cash provided by investing
activities  (the purchase and sale of containers)  was $839 compared to net cash
used in investing  activities of $1,613 for the  comparable  period in 1997. Net
cash provided by investing  activities  increased $2,452  primarily  because 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  six-month  periods ended June 30, 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.................    7,297      8,177
                   Average container fleet.................    7,592      8,013

The decline in the average  container fleet of 5% from the six months ended June
30, 1997 to the equivalent  period in 1998 resulted from the Partnership  having
sold more containers  than it purchased since June 30, 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
six-month period ending June 30, 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 six-month
periods ended June 30, 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
six-month periods ended June 30, 1998 and 1997.

The  Partnership's  income from operations for the six-month periods ending June
30, 1998 and 1997 was $816 and $764,  respectively,  on rental  income of $2,273
and $2,388, respectively. The decrease in rental income of $115, or 5%, from the
six-month  period  ended  June 30,  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  $133,  or 6%. This  decrease was
primarily due to the decrease in average  rental rates of 6% and the decrease in
the  average  container  fleet of 5%, and was offset by the  increase in average
on-hire  (utilization)  percentage of 4% and a decrease in leasing incentives of
25%.

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.

Average utilization for the three- and six-month periods ended June 30, 1998 was
greater than the average utilization for the comparable periods in 1997. Despite
the improvement in average utilization from the prior year, utilization has been
slowly declining over the last six months. Rental rates have also been declining
and average rental rates for the six-month  period ended June 30, 1998 are lower
than average  rental  rates for the same period in 1997.  These  decreases  were
offset by decreased  leasing  incentives  during the six-month period ended June
30, 1998 as compared to the same period in 1997. The  improvement in utilization
over the prior  year and the  overall  improvement  in  leasing  incentives,  is
primarily  due to  increased  demand  in  Asia.  The  weakening  of  many  Asian
currencies  resulted in a significant  increase in exports from Asia,  which has
created a strong  demand for  containers  in  certain  locations.  However,  the
weakening of these  currencies  has also lowered demand in Asia for imports from
North  America and Europe  resulting in a lower demand for  containers  in these
areas.  For the near term, the General  Partners do not foresee material changes
in existing market conditions and caution that both utilization and rental rates
could  continue  declining,  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
June 30, 1998 and 1997,  there were 22 and 111 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 dropping off containers in surplus
locations less credits  granted to lessees for leasing  containers  from surplus
locations  (location  income),  income from  charges to lessees for handling and
returning  containers and income from charges to lessees for a Damage Protection
Plan (DPP).  For the  six-month  period ended June 30, 1998,  the total of these
other  rental  income  items was $270,  an increase  of $18 from the  equivalent
period in 1997.  The  primary  component  of this  increase  was an  increase in
location  income of $85.  Location  income  increased  due to the  inclusion  of
certain credits received during 1997 and 1998 which had been previously  applied
against  repositioning expense and due to a decrease in credits given to lessees
for picking up containers from certain locations.

Direct  container  expenses  increased  $57, or 14%, from the  six-month  period
ending  June 30,  1997 to the  equivalent  period  in  1998.  The  increase  was
primarily  due to an  increase  in  repositioning  expense  of $98  offset  by a
decrease in storage expense of $33.  Repositioning  expense increased due to the
removal of certain  credits from  repositioning  costs to other rental income as
discussed  above and due to an increase in the  average  repositioning  cost per
container offset by a decrease in the number of containers repositioned. Storage
expense decreased primarily due to the increase in average utilization.

Bad debt expense decreased from an expense of $28 for the six-month period ended
June 30,  1997 to a  benefit  of $46 for the  comparable  period  in  1998.  The
write-off of certain  receivables that had reserves in excess of the receivable,
due to insurance proceeds received,  as well as the resolution of payment issues
with one lessee, resulted in the benefit recorded in 1998.

Depreciation expense decreased $87, or 12%, from the six-month period ended June
30, 1997 to the comparable  period in 1998 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 $35, or 15%, from the six-month  period
ended  June 30,  1997 to the  comparable  period  in 1998 due to a  decrease  in
equipment  management  fees.  Equipment  management  fees  decreased  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
management fees are primarily based.

General and administrative  costs to affiliates  decreased $21, or 13%, from the
six-month  period ended June 30, 1997 to the comparable  period in 1998 due to a
decrease in overhead costs allocated by TFS and TEM.

Other income increased $54, or 43%, primarily due to an increase in gain on sale
of  containers  of $41 from the  six-month  period  ending  June 30, 1997 to the
equivalent period in 1998.

Net earnings per limited partnership unit increased from $0.59 to $0.67 from the
six-month  period  ending  June 30,  1997  compared  to the same period in 1998,
reflecting the increase in net earnings  allocated to limited partners from $875
to $981, respectively.


The  following is a comparative  analysis of the results of  operations  for the
three-month periods ended June 30, 1998 and 1997.

The Partnership's income from operations for the three-month periods ending June
30, 1998 and 1997 was $391 and $331,  respectively,  on rental  income of $1,100
and $1,181  respectively.  The decrease in rental income of $81, or 7%, from the
three-month  period  ended June 30,  1997 to the  comparable  period in 1998 was
primarily due to a decrease in income from container rentals of $39, or 4%. This
decrease was primarily due to the decrease in average rental rates of 3% and the
decrease in the average container fleet of 4%, and was offset by the increase in
average utilization of 5% and the decrease in leasing incentives of 38%.

Direct  container  expenses  decreased  $5, or 2%, from the  three-month  period
ending  June 30,  1997 to the  equivalent  period  in  1998.  The  decrease  was
primarily  due to  decreases  in  storage  and  handling  expenses  offset by an
increase in repositioning  expense.  Storage expense decreased  primarily due to
the  increase  in average  utilization  and a  decrease  in  container  movement
resulted in a lower handling expense.  Repositioning expense increased primarily
due to an increase in the average repositioning cost per container,  offset by a
decrease in the number of containers repositioned.

Bad debt expense  decreased  from an expense of $17 for the  three-month  period
ended June 30, 1997 to a benefit of $32 for the  comparable  period in 1998. The
benefit  recorded in 1998 was primarily due to the  resolution of payment issues
with one lessee.

Depreciation  expense  decreased $60, or 15%, from the three-month  period ended
June 30,  1997 to the  comparable  period  in 1998 due to the  reduction  in the
average fleet size and due to certain  containers  acquired used, which now have
been fully depreciated.

Management fees to affiliates  decreased $5, or 4%, from the three-month  period
ended June 30,  1997 to the  comparable  period in 1998,  due to a  decrease  in
equipment management fees resulting from the decrease in rental income.

General and administrative  costs to affiliates  decreased $16, or 21%, from the
three-month period ended June 30, 1997 to the comparable period in 1998 due to a
decrease in overhead costs allocated by TFS and TEM.

Other  income  increased  $12, or 35%,  primarily  due to  increases in interest
income and gain on sale of containers  from the  three-month  period ending June
30, 1997 to the same period in 1998.

Net earnings per limited partnership unit increased from $0.24 to $0.29 from the
three-month  period ending June 30, 1997 to the same period in 1998,  reflecting
the increase in net earnings  allocated to limited  partners  from $358 to $430,
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 General Partners and
Partnership's core internal systems, where Year 2000 issues have been identified
are currently being revised.  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 continuing  their  assessment of Year
2000  issues not related to their core  systems,  including  issues  surrounding
systems that  interface  with external  third  parties.  If external third party
systems  are not Year 2000  compliant,  those  external  third  parties may have
difficulty conducting ordinary operations, which could have an adverse affect on
the General Partners and the Partnership.

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 June 30, 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 the 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:  August 13, 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>                                           <C>
________________________                 Executive Vice President,                      August 13, 1998
John R. Rhodes                           (Principal Financial and
                                         Accounting Officer) and
                                         Secretary




________________________                 President (Principal Executive                 August 13, 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:  August 13, 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>                                           <C>
/s/John R. Rhodes                        Executive Vice President,                      August 13, 1998
-------------------------                (Principal Financial and
John R. Rhodes                           Accounting Officer) and
                                         Secretary



/s/Philip K. Brewer                      President (Principal Executive                 August 13, 1998
---------------------------              Officer)
Philip K. Brewer                         


</TABLE>