.



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


May 13, 1997


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  Annual Report on Form 10-Q for the First Quarter ended
March 31, 1997.

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

Sincerely,

Nadine Forsman
Controller
<PAGE>



                       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, 1997


                           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, 1997

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>


                                                                                                               Page


Item 1.   Financial Statements

<S>      <C>                                                              <C>                                 <C>
          Balance Sheets - March 31, 1997 (unaudited) and December 31, 1996.................................    3


          Statements of Earnings for the three months
          ended March 31, 1997 and 1996 (unaudited).........................................................    4


          Statements of Partners' Capital for the three months
          ended March 31, 1997 and 1996 (unaudited).........................................................    5


          Statements of Cash Flows for the three months
          ended March 31, 1997 and 1996 (unaudited).........................................................    6


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


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



</TABLE>
<PAGE>



                          TCC EQUIPMENT INCOME FUND
                     (a California limited partnership)

                                Balance Sheets

                     March 31, 1997 and December 31, 1996
                           (Amounts in thousands)
<TABLE>
<CAPTION>

                                                                           1997               1996
                                                                      ----------------   ---------------
                                                                        (unaudited)

<S>                                                                 <C>                  <C>
Assets
Container rental equipment, net of accumulated
   depreciation of $10,354 (1996:  $10,343)                         $          16,042            15,601
Cash                                                                            1,720             1,253
Net investment in direct financing leases (note 8)                                378               461
Accounts receivable, net of allowance
   for doubtful accounts of $683 (1996:  $687)                                  1,562             1,554
Due from affiliates, net (note 6)                                                 180             1,170
Prepaid expenses                                                                    6                10
                                                                      ----------------   ---------------
                                                                    $         19,888             20,049
                                                                      ================   ===============

Liabilities and Partners' Capital
Liabilities:
   Accounts payable                                                 $             106               133
   Accrued liabilities                                                             14                 -
   Accrued damage protection plan costs (note 2)                                  120               130
   Accrued maintenance and repair costs (note 3)                                   34                45
   Warranty claims (note 4)                                                       244               260
   Equipment purchases payable                                                    377               269
                                                                      ----------------   ---------------
       Total liabilities                                                          895               837
                                                                      ----------------   ---------------

Partners' capital:
   General partners                                                              (36)              (36)
   Limited partners                                                            19,029            19,248
                                                                      ----------------   ---------------
       Total partners' capital                                                 18,993            19,212
                                                                      ----------------   ---------------

Commitments (note 10)
                                                                    $          19,888            20,049
                                                                      ================   ===============


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, 1997 and 1996
      (Dollar amounts in thousands except for unit and per unit amounts)
                                    (unaudited)



<TABLE>
<CAPTION>

                                                                       1997                    1996
                                                                 -----------------       -----------------

<S>                                                            <C>                       <C>  
Rental Income                                                  $            1,207                   1,520
                                                                 -----------------       -----------------

Costs and expenses:
   Direct container expenses                                                  184                     273
   Bad debt provision (benefit)                                                11                    (17)
   Depreciation                                                               363                     374
   Professional fees                                                            7                       9
   Management fees to affiliates (note 6)                                     116                     138
   General and administrative costs to affiliates (note 6)                     79                      94
   Other general and administrative costs                                      14                      15
                                                                 -----------------       -----------------

                                                                              774                     886
                                                                 -----------------       -----------------

   Income from operations                                                     433                     634
                                                                 -----------------       -----------------

Other income:
   Interest income (expense), net                                              14                     (1)
   Gain on sale of equipment                                                   78                     110
                                                                 -----------------       -----------------

                                                                               92                     109
                                                                 -----------------       -----------------

    Net earnings                                               $              525                     743
                                                                 =================       =================

Allocation of net earnings (note 6):
   General partners                                            $                8                       7
   Limited partners                                                           517                     736
                                                                 -----------------       -----------------

                                                               $              525                     743
                                                                 =================       =================
Limited partners' per unit share
   of net earnings                                             $             0.35                    0.50
                                                                 =================       =================

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
                                                                 =================       =================


</TABLE>
See accompanying notes to financial statements



<PAGE>


                         TCC EQUIPMENT INCOME FUND
                    (a California limited partnership)

                      Statements of Partners' Capital

             For the three months ended March 31, 1997 and 1996
                          (Amounts in thousands)
                               (unaudited)

<TABLE>
<CAPTION>

                                                                   Partners' Capital
                                             --------------------------------------------------------
                                               General              Limited               Total
                                             -------------       ---------------      ---------------

<S>                                        <C>                   <C>                  <C>   
Balances at January 1, 1996                $         (36)                19,840               19,804

Distributions                                         (7)                 (736)                (743)

Net earnings                                            7                   736                  743
                                             -------------       ---------------      ---------------

Balances at March 31, 1996                 $         (36)                19,840               19,804
                                             =============       ===============      ===============

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
                                             =============       ===============      ===============


</TABLE>



See accompanying notes to financial statements


<PAGE>


                        TCC EQUIPMENT INCOME FUND
                    (a California limited partnership)

                         Statements of Cash Flows

            For the three months ended March 31, 1997 and 1996
                          (Amounts in thousands)
                               (unaudited)

<TABLE>
<CAPTION>

                                                                       1997            1996
                                                                   -------------    ------------

<S>                                                             <C>                 <C>
Cash flows from operating activities:
     Net earnings                                               $           525             743
     Adjustments  to reconcile  net  earnings to net cash
       provided by operating activities:
        Depreciation                                                        363             374
        Decrease in allowance for doubtful accounts                         (4)            (27)
        Gain on sale of equipment                                          (78)           (110)
        Changes in assets and liabilities:
           (Increase) decrease in accounts receivable                       (4)             123
           Proceeds from principal payments of
              direct financing leases                                        65              76
           Decrease (increase) in due from affiliates, net                  967             (8)
           (Decrease) increase in accounts payable and
              accrued liabilities                                          (13)              26
           (Decrease) increase in maintenance and
              repair costs                                                 (11)              15
           (Decrease) increase in accrued
              damage protection plan costs                                 (10)               6
           Decrease in warranty claim                                      (16)            (16)
           Decrease in prepaid expenses                                       4               3
                                                                   -------------    ------------

              Net cash provided by operating activities                   1,788           1,205
                                                                   -------------    ------------

Cash flows from investing activities:
     Proceeds from sale of equipment                                        377             308
     Equipment purchases                                                  (954)           (465)
                                                                   -------------    ------------

              Net cash used in investing activities                       (577)           (157)
                                                                   -------------    ------------

Cash flows from financing activities:
     Repayment to affiliates                                                  -           (170)
     Distributions to partners                                            (744)           (740)
                                                                   -------------    ------------

              Net cash used in financing activities                       (744)           (910)
                                                                   -------------    ------------

Net increase in cash                                                        467             138

Cash at beginning of period                                               1,253             492
                                                                   -------------    ------------

Cash at end of period                                           $         1,720             630
                                                                   =============    ============

Interest paid during the period                                 $            -                4
                                                                   =============    ============

</TABLE>

See accompanying notes to financial statements


<PAGE>



                            TCC EQUIPMENT INCOME FUND
                       (a California limited partnership)


                      Statements Of Cash Flows--Continued

               For the three months ended March 31, 1997 and 1996
                             (Amounts in thousands)
                                 (unaudited)

Supplemental Disclosures:

Supplemental schedule of non-cash investing and financing activities:

The following table summarizes the amounts of Equipment purchases, distributions
to  partners,  and proceeds  from sale of  Equipment  which had not been paid or
received  as of March  31,  1997 and  1996,  and  December  31,  1996 and  1995,
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, 1997 and 1996.
<TABLE>
<CAPTION>

                                                                Mar. 31       Dec. 31         Mar. 31        Dec. 31
                                                                   1997          1996            1996           1995
                                                            -----------    -----------    ------------    -----------

Equipment purchases included in:
<S>                                                       <C>              <C>            <C>            <C>
     Due to affiliates..............................      $         10              1              28             44
     Equipment purchases payable....................               377            269             218            430

Distributions to partners included in:
     Due to affiliates..............................                 2              2              18             15

Proceeds from sale of Equipment included in:
     Accounts receivable............................                 -              -               -              1
     Due from affiliates............................               313            327             289            229
</TABLE>

The following table summarizes the amounts of Equipment purchases, distributions
to partners and proceeds from sale of Equipment  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, 1997 and 1996.
<TABLE>
<CAPTION>

                                                                                                 1997            1996
                                                                                                 ----            ----

<S>                                                                                         <C>                  <C>
Equipment purchases recorded......................................................          $   1,071            237
Equipment purchases paid..........................................................                954            465

Distributions to partners declared................................................                744            743
Distributions to partners paid....................................................                744            740

Proceeds from sale of Equipment recorded..........................................                363            367
Proceeds from sale of Equipment received..........................................                377            308
</TABLE>


See accompanying notes to financial statements




<PAGE>


                           TCC EQUIPMENT INCOME FUND
                      (a California limited partnership)

                         Notes To Financial Statements

                                 March 31, 1997
            (Dollar amounts in thousands except for per unit amounts)
                                   (Unaudited)


Note 1.   General

      TCC  Equipment  Income  Fund (the  Partnership)  is a  California  limited
      partnership  formed in 1987.  The  Partnership  owns and leases a fleet of
      intermodal   marine  cargo   container   equipment   (the   Equipment)  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, 1997 and December  31, 1996,  and the
      results of its operations, changes in partners' capital and cash flows for
      the three-month periods ended March 31, 1997 and 1996, 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, 1996.

      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.   Damage Protection Plan

      The Partnership  offers a Damage  Protection Plan (the Plan) to lessees of
      its  Equipment.  Under  the  terms  of the  Plan,  the  Partnership  earns
      additional  revenues on a daily basis and, as a result, 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.  At March 31,  1997 and
      December 31, 1996, this reserve was equal to $120 and $130, respectively.

Note 3.   Maintenance and Repair

      The Partnership  accrues  maintenance and repair costs on damaged units in
      depots.  At March 31, 1997 and December 31, 1996,  the amount  accrued was
      $34 and $45, respectively.

Note 4.   Warranty Claims

      During 1992 and 1995, the Partnership  settled  warranty claims against an
      equipment  manufacturer.  The  Partnership  is amortizing  the  settlement
      amounts over the remaining  estimated  useful life of the Equipment (seven
      years), reducing maintenance and repair costs over that time. At March 31,
      1997 and December  31, 1996,  the  unamortized  portion of the  settlement
      amount was equal to $244 and $260, respectively.

Note 5.   Acquisition of Equipment

      During  the  three-month  periods  ended  March  31,  1997 and  1996,  the
      Partnership   purchased   Equipment  with  a  cost  of  $1,071  and  $237,
      respectively.

Note 6.   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  and are
      commonly  owned by Textainer  Group Holdings  Limited  (TGH).  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
      Equipment  outside  the United  States on behalf of the  Partnership.  TCC
      Securities  Corporation  (TSC), a licensed broker and dealer in securities
      and an affiliate of the General Partners, was the managing sales agent for
      the offering of Units for sale.

      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
      capitalized $46 and $21 of equipment acquisition fees as part of container
      costs  during  the  three-month  periods  ended  March 31,  1997 and 1996,
      respectively.  The Partnership  incurred $31 of incentive  management fees
      during both of the  three-month  periods ended March 31, 1997 and 1996. No
      equipment liquidation fees were incurred during either period.

      The Partnership's Equipment is managed by TEM. In its role as manager, TEM
      has authority to acquire,  hold,  manage,  lease,  sell and dispose of the
      Partnership's  Equipment.  Additionally,  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
      March 31, 1997 and December 31,1996.

      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, 1997 and 1996, these fees totaled $85
      and $107,  respectively.  The Partnership's  Equipment is leased by TEM to
      third  party  lessees on  operating  master  leases,  spot leases and term
      leases.  The majority of the  Equipment 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 borne by TFS and TEM. During the three-month periods ended
      March 31, 1997 and 1996 costs  allocated to the  Partnership  for salaries
      were $41 and $46, respectively, and other general and administrative costs
      were $38 and $48,  respectively.  TEM  allocates  these costs based on the
      ratio of the Partnership's  interest in the managed Equipment to the total
      Equipment  managed  by  TEM  during  the  period.   Indirect  general  and
      administrative costs allocated to the Partnership by TEM were $69, and $76
      for the three-month periods ended March 31, 1997 and 1996, respectively.

      TFS allocates indirect general and administrative costs to the Partnership
      based on the ratio of the  Partnership's  Equipment to the total Equipment
      of all limited  partnerships  managed by TFS. TFS allocated $10 and $18 of
      these indirect costs to the  Partnership  during the  three-month  periods
      ended March 31, 1997 and 1996, respectively.

      The General  Partners or TAS may acquire  Equipment  in their own name and
      hold  title on a  temporary  basis for the  purpose  of  facilitating  the
      acquisition of such Equipment for the Partnership.  The Equipment 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
      Equipment resold to the Partnership.

      At March 31, 1997 and  December  31,  1996,  due from  affiliates,  net is
      comprised of:
<TABLE>
<CAPTION>

                                                                                         1997            1996
                                                                                         ----            ----
<S>                                                                             <C>                    <C>
                    Due from affiliates:
                             Due from TEM...................................    $         215           1,190
                                                                                        =====           =====

                    Due to affiliates:
                             Due to TCC.....................................    $          11               6
                             Due to TAS.....................................               10               -
                             Due to TFS.....................................               14              14
                                                                                        ------        -------
                                                                                $          35              20
                                                                                        ======        =======
</TABLE>

      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 intercompany  balances which are outstanding for more than one
      month,  to  the  extent  such  balances  relate  to  loans  for  Equipment
      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 intercompany  balances for the three-month  period ended March
      31, 1997. The Partnership  incurred interest expense of $8 on intercompany
      balances payable to TFS for the three-month period ended March 31, 1996.

Note 7.   Rentals Under Operating Leases

      The following is a schedule by year of minimum future  rentals  receivable
      on noncancelable operating leases as of March 31, 1997:

             Year ending March 31:

             1998.............................................           $  263
             1999.............................................               11
                                                                          -----

             Total minimum future rentals receivable..........           $  274
                                                                           ====

Note 8.   Direct Financing Leases

      The  components  of the net  investment in direct  financing  leases as of
      March 31, 1997 and December 31, 1996 are as follows:

                                                            1997            1996
                                                            ----            ----

      Future minimum lease payments receivable............ $ 413            515
      Residual value......................................     2              2
      Less: unearned income...............................   (37)           (56)
                                                             ---            ---

      Net investment in direct financing leases........... $ 378            461
                                                             ===            ===

      The following is a schedule by year of minimum lease  payments  receivable
      under the three direct financing leases as of March 31, 1997:

        Year ending March 31:

        1998...............................................          $ 380
        1999...............................................             33
                                                                        --
        Total minimum lease payments receivable............          $ 413
                                                                       ===

      Rental income for the three-month  periods  ended  March 31, 1997 and 1996
      includes $28 and  $32,  respectively,  of  income  from  direct  financing
      leases.

Note 9.   Redemptions

      No redemption  offerings were  consummated  during the three-month  period
      ended March 31, 1997 or 1996.  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 and varies  depending  on the length of time the
      units are outstanding.

Note 10.  Commitments

      At March 31,  1997,  the  Partnership  has  committed  to purchase 250 new
      containers at an  approximate  total purchase price of $675 which includes
      acquisition fees of $32. These  commitments were made to TAS which, as the
      contracting  party,  has in turn  committed to purchase this  Equipment on
      behalf of the Partnership.




<PAGE>

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

         (Dollar amounts in thousands of dollars except for 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, 1997 and 1996. 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  was  involved  in the
offering of limited  partnership  interests to the public.  On October 26, 1989,
the  Partnership's  offering  of  limited  partnership  interests  was closed at
$29,491.

The Partnership  has set up a program whereby limited  partners may redeem units
for a specified  redemption  value.  The redemption  price is set by formula and
varies  depending on length of time the units are  outstanding.  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.

Prior  to  its  distribution  or  reinvestment  in  additional  Equipment,   the
Partnership invests working capital and cash flow from operations in short-term,
highly liquid  investments.  It is the policy of the  Partnership  to maintain a
minimum  working  capital  reserve in an amount which is the lesser of (i) 1% of
capital contributions or (ii) $100. At March 31, 1997, the Partnership's cash of
$1,720 was primarily invested in a market-rate account.

During the  three-month  period ended March 31, 1997, the  Partnership  declared
cash distributions to limited partners  pertaining to the fourth quarter of 1996
in the amount of $736.  These  distributions  represent 10% of original  capital
(measured on an  annualized  basis) on each unit. Of these  distributions,  on a
GAAP basis,  $219 was a return of capital and the balance was from net earnings.
On a cash basis all of these distributions were from operations.

At March 31, 1997, the  Partnership had committed to purchase 250 new containers
at an approximate total purchase price of $675, which includes  acquisition fees
of $32. At March 31, 1997, the  Partnership  had sufficient cash on hand to meet
these  commitments.  In the event the  Partnership  decides not to purchase  the
Equipment,  one of the General  Partners or an affiliate of the General Partners
will retain the Equipment for its own account.

For the  three-month  period ended March 31, 1997, the  Partnership had net cash
provided  by  operating  activities  of  $1,788  compared  with  $1,205  for the
equivalent period in 1996. The increase is primarily  attributable to a decrease
in due from  affiliates,  net of $967,  offset by a decrease in net  earnings of
$218 and an increase in accounts  receivable from operations of $4. The decrease
in due from  affiliates,  net, was due to timing  differences in the accrual and
payment of  expenses  and fees or in the accrual  and  remittance  of net rental
revenues.  The  decrease  in net  earnings  of 29% in the first  quarter of 1997
compared to the first  quarter of 1996 was  primarily  due to a 21%  decrease in
rental  revenues.  The decrease in rental revenues  between periods was due to a
decline  in  utilization,  rental  rates and fleet  size.  These  decreases  are
discussed more fully below under "Results of  Operations".  Accounts  receivable
from operations  increased despite the decrease in rental revenues primarily due
to an  increase  in the  average  collection  period from 134 days for the three
months ended March 31, 1996 to 167 days for the comparable period in 1997.

As explained below under "Results of Operations",  demand for leased  containers
has  declined,  and  this  decline  has  affected  the  Partnership's  financial
condition.

Net  cash  used in  investing  activities  (the  purchase  and  sale  of  rental
equipment) for the three-month  period ended March 31, 1997 was $577 compared to
$157 for the same  period in 1996.  This  difference  reflects  that,  on a cash
basis,  the  Partnership  purchased  more Equipment in the first quarter of 1997
than in the same  period  in 1996.  The  General  Partners  believe  that  these
differences  reflect  normal  fluctuations  in  equipment  sales and  purchases.
Moreover,  the  Partnership  has a significant  amount of used  Equipment in its
portfolio and expects to sell this  Equipment  periodically  when it reaches the
end of its useful marine life. Consistent with the investment objectives and the
General  Partners'  determination  that the Equipment can be profitably  sold or
bought at any time,  the  Partnership  intends to reinvest all or a  significant
amount of proceeds from future  Equipment  sales in additional  Equipment.  Such
additional Equipment purchases may not, however, equal the number of units sold.


Results of Operations

The  Partnership's  operations,   which  consist  of  rental  income,  container
depreciation,  direct container expenses,  management fees, and reimbursement of
administrative expenses were directly related to the size of the container fleet
(inventory)  during the  three-month  periods  ended March 31, 1997 and 1996, 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:

                                                               1997        1996
                                                               ----        ----
                   Opening inventory.......................    7,849      8,471
                   Closing inventory.......................    7,983      8,415
                   Average.................................    7,916      8,443

The decline in the average  container  fleet of 6% from the three  months  ended
March 31, 1996 to the equivalent period in 1997 was primarily due to the sale of
certain Equipment.  Although sales proceeds were used to purchase new Equipment,
fewer units were bought than sold,  resulting  in a net  decrease in the size of
the  Equipment  fleet.  The decline in the  container  fleet  contributed  to an
overall  decline in rental  income from the three months ended March 31, 1996 to
the equivalent period in 1997.

Since the Fund is now in its eighth year of operations, an increasing portion of
its fleet may be sold in future years,  and the sales proceeds are not likely to
be sufficient to replace all of the Equipment  sold.  Therefore,  the decline in
the size of the fleet may continue.

Rental  income  and  direct  container  expenses  are  also  affected  by  lease
utilization  percentages  for the  equipment  which  were 79% and 83% on average
during the three-month periods ended March 31, 1997 and 1996,  respectively.  In
addition, rental income is affected by daily rental rates, which declined.

The  following is a comparative  analysis of the results of  operations  for the
three-month periods ended March 31, 1997 and 1996.

The Partnership's income from operations for the three-month periods ended March
31, 1997 and 1996 was $433 and $634,  respectively,  on rental  income of $1,207
and $1,520, respectively. The decrease in rental income of $313, or 21% from the
three-month period ended March 31, 1996 to the same period in 1997 was primarily
attributable  to income from  container  rentals,  the major  component of total
revenue,  which  decreased by $226,  or 18%.  Income from  container  rentals is
largely  dependent  upon three factors:  equipment  available for lease (average
inventory),  average on-hire (utilization) percentage,  and average daily rental
rates. Average inventory decreased 6%, average on-hire utilization  decreased 5%
and average daily rental rates  decreased 7% from the  three-month  period ended
March 31, 1996 to the comparable period in 1997.

Container  utilization  began to decline in late 1995 and that decline persisted
throughout 1996 and into 1997. The General  Partners  believe that this decrease
in demand for leased containers is the result of adverse changes in the business
of its shipping line  customers.  These changes  consist  principally  of: (i) a
general slowdown in the growth of world containerized cargo trade,  particularly
in the  Asia-North  America and  Asia-Europe  trade routes;  (ii)  over-capacity
resulting from the 1996 and 1997 additions of new,  larger ships to the existing
container  ship  fleet at a rate in excess of the growth  rate in  containerized
cargo  trade;   and  (iii)  shipping  line   alliances  and  other   operational
consolidations   that  have  allowed   shipping  lines  to  operate  with  fewer
containers,  thereby decreasing the demand for leased containers.  The container
ship  over-capacity  in particular  led to lower  shipping  rates,  resulting in
shipping  lines'  need to reduce  operating  costs.  The drive to reduce  costs,
coupled with the  availability  of  inexpensive  financing  and lower  container
prices,  encouraged  shipping  lines to purchase,  rather than lease,  a greater
number of new  containers in 1996 than in previous  years.  All of these factors
have led to downward pressure on container lease rates, a decline in utilization
of leased containers,  and an increase in leasing incentives and other discounts
being  granted  to  shipping  lines  by  container   lessors,   further  eroding
Partnership profitability.  The decline in demand for leased containers has been
accompanied  by a drop in the  purchase  price of new  containers.  For the near
term,  the  General  Partners  do not  foresee  any  changes in  current  market
conditions and caution that both  utilization  and lease rates could continue to
decline, 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. There
were three direct financing leases at March 31, 1997.

The balance of rental income consists of other  lease-related  items,  primarily
income  from  charges  to the  lessees  for  pick-up  of  containers  from prime
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-month period ended March 31, 1997, the total of these other
revenue items was $145, a decrease of $87 compared to the  equivalent  period in
1996.  The primary  components of this net decrease  were  decreases in location
income and DPP of $68 and $14, respectively.  This decline in location income is
mainly due to lower  demand,  which drove  drop-off  charges to lessees down and
increased  credits  given to lessees  for  picking up units from less  desirable
locations.  DPP revenue  declined due to the decrease in return fees as a result
of fewer  units  being  turned in during  the  period  ended  March 31,  1997 as
compared to the equivalent period in 1996.

Direct container expenses,  excluding bad debt expense, decreased by $88, or 32%
from the  three-month  periods  ended March 31, 1997 to the same period in 1996.
The primary components of this decrease were decreases in maintenance and repair
costs of $71 offset by an increase in storage  expenses of $14.  Maintenance and
repair  costs  decreased  due to a  decrease  in the  average  number  of  units
requiring repairs from March 31, 1996 to the same period in 1997.  Additionally,
there was a slight decrease in the average repair costs per unit between the two
periods.  Storage  costs  increased  due  to  lower  utilization  rates  in  the
three-month period ended March 31, 1997 compared to the same period in 1996.

Bad debt expense increased from a benefit of $17 in the first quarter of 1996 to
an expense of $11 in the same  period of 1997.  The  increase is mainly due to a
benefit  recorded in the first  quarter of 1996,  which was  primarily  due to a
reduction in reserve requirements for two specific lessees.

Depreciation  expense  decreased by $11 or 3% from the three-month  period ended
March  31,  1996  to  the  same  period  in  1997.  The  decrease  is  primarily
attributable  to the 6%  decrease  in the  average  fleet  size  and to  certain
equipment, acquired used, which has now been fully depreciated.

Management  fees  decreased by $22 or 16%, from the three months ended March 31,
1996 to the equivalent period in 1997 due to a decrease in equipment  management
fees.  Equipment  management  fees which are based  primarily  of gross  revenue
decreased  $22 or 21% due to the decrease in rental  income and were 7% of gross
revenue for both  periods.  Incentive  management  fees,  which are based on the
Partnership's limited and general partner distribution  percentage and partners'
capital, were $31 for both periods.

General and administrative  costs to affiliates decreased by $15, or 16%, in the
three-month period ended March 31, 1997 compared to the same period in 1996. The
decrease was primarily the result of a decline in overhead costs  allocable from
TEM and TFS.

Other  income  (expense)  includes  a gain on sale of  equipment  of $78 for the
three-month  period  ended  March 31,  1997  compared  to a gain of $110 for the
equivalent period ended in 1996.

Net earnings per limited partnership unit decreased from $0.50 to $0.35 from the
three-month  period ended March 31, 1996 to the same period in 1997,  reflecting
the decrease in net earnings from $743 to $525 for the respective periods.

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  Equipment.  The  Partnership's  business  risk in its foreign
operations lies with the  creditworthiness of the lessees, and the Partnership's
ability to keep the Equipment under lease,  rather than the geographic  location
of the  Equipment  or the domicile of the  lessees.  The  Equipment is generally
operated on the international  high seas rather than on the domestic  waterways.
The  Equipment  is subject to the risk of war or other  political,  economic  or
social  occurrence  where the Equipment is used, which may result in the loss of
Equipment,  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, 1997 which  would  result in such risk
materializing.

Other risks of the Partnership's  leasing  operations include  competition,  the
cost of  repositioning  Equipment  after  it  comes  off-lease,  the  risk of an
uninsured  loss,  increases in maintenance  expenses or other costs of operating
the  Equipment,  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:  May 13, 1997

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 13, 1997
John R. Rhodes                           (Principal Financial and
                                         Accounting Officer) and
                                         Secretary




-------------------------                 President (Principal Executive                 May 13, 1997
James E. Hoelter                          Officer) and Director

</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 13, 1997


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 13, 1997
-------------------------                (Principal Financial and
John R. Rhodes                           Accounting Officer) and
                                         Secretary

/s/James E. Hoelter                      President (Principal Executive                 May 13, 1997
-----------------------                  Officer) and Director
James E. Hoelter                         

</TABLE>