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


November 11, 1998


Securities and Exchange Commission
Washington, DC  20549

Gentlemen:

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



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


                For the quarterly period ended September 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 10-Q for the
Quarter Ended September 30, 1998

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


                                                                                                       Page

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

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


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


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


          Statements of Cash Flows for the nine months
          ended September 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..................................................................... 14
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)

Balance Sheets

September 30, 1998 and December 31, 1997
(Amounts in thousands)
----------------------------------------------------------------------------------------------------
<S>                                                                 <C>                 <C> 
                                                                       1998                1997
                                                                   -------------       -------------
                                                                    (unaudited)
Assets
Container rental equipment, net of accumulated
   depreciation of $9,373 (1997:  $9,854)                        $       13,950      $       15,874
Cash                                                                      2,471               1,166
Net investment in direct financing leases  (note 9)                          17                 129
Accounts receivable, net of allowance for doubtful
   accounts of $166 (1997:  $635) (note 10)                                 998               1,342
Due from affiliates, net (note 7)                                           178                   8
Prepaid expenses                                                              4                  41
                                                                   -------------       -------------
                                                                 $       17,618      $       18,560
                                                                   =============       =============

Liabilities and Partners' Capital
Liabilities:
   Accounts payable                                              $          117      $          130
   Accrued liabilities                                                       39                   7
   Accrued recovery costs (note 2)                                           19                  28
   Accrued damage protection plan costs (note 3)                             97                 101
   Accrued maintenance and repair costs (note 4)                             28                  47
   Warranty claims (note 5)                                                 148                 196
                                                                   -------------       -------------
       Total liabilities                                                    448                 509
                                                                   -------------       -------------

Partners' capital:
   General partners                                                         (36)                (36)
   Limited partners                                                      17,206              18,087
                                                                   -------------       -------------
       Total partners' capital                                           17,170              18,051
                                                                   -------------       -------------
                                                                 $       17,618      $       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 nine months  ended  September  30,  1998 and 1997  
(Amounts in thousands except for unit and per unit amounts) 
(unaudited)
------------------------------------------------------------------------------------------------------------------------------------
<S><C>                                                     <C>                  <C>                <C>                <C>
                                                              Three months        Three months        Nine months        Nine months
                                                                     Ended               Ended              Ended              Ended
                                                            Sept. 30, 1998      Sept. 30, 1997     Sept. 30, 1998     Sept. 30, 1997
                                                          ----------------    ----------------    ---------------    ---------------
Rental income                                             $          1,088    $          1,208    $         3,361    $         3,596
                                                          ----------------    ----------------    ---------------    ---------------

Costs and expenses:
   Direct container expenses                                           221                 226                685                633
   Bad debt  expense (benefit)                                          10                   4                (36)                32
   Depreciation                                                        319                 360                984              1,112
   Professional fees                                                     9                  10                 25                 31
   Management fees to affiliates (note 7)                              107                 118                303                349
   General and administrative costs to affiliates (note 7)              54                  64                190                221
   Other general and administrative costs                               12                  18                 38                 46
                                                          ----------------    ----------------    --------------     ---------------
                                                                       732                 800              2,189              2,424
                                                          ----------------    ----------------    ---------------    ---------------
   Income from operations                                              356                 408              1,172              1,172
                                                          ----------------    ----------------    ---------------    ---------------

Other income:
   Interest income                                                      29                  11                 71                 40
   (Loss) gain on sale of containers                                    (2)                 44                136                141
                                                          ----------------    ----------------    ---------------    ---------------
                                                                        27                  55                207                181
                                                          ----------------    ----------------    ---------------    ---------------
    Net earnings                                          $            383    $            463    $         1,379    $         1,353
                                                          ================    ================    ===============    ===============

Allocation of net earnings (note 7):
   General partners                                       $              8    $              8    $            23    $            23
   Limited partners                                                    375                 455              1,356              1,330
                                                          ----------------    ----------------    ---------------    ---------------
                                                          $            383    $            463    $         1,379    $         1,353
                                                          ================    ================    ===============    ===============
Limited partners' per unit share
   of net earnings                                        $           0.26    $           0.31    $          0.92    $          0.90
                                                          ================    ================    ===============    ===============
Limited partners' per unit share
   of distributions                                       $           0.50    $           0.50    $          1.50    $          1.50
                                                          ================    ================    ===============    ===============
Weighted average number of limited
   partnership units outstanding                                 1,469,029           1,471,779          1,471,412          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 nine months ended September 30, 1998 and 1997
(Amounts in thousands)
(unaudited)
------------------------------------------------------------------------------------------------------
<S><C>                                      <C>                   <C>                 <C>
                                                                   Partners' Capital
                                                 -----------------------------------------------------
                                                   General              Limited             Total
                                                 -------------       --------------      -------------

Balances at January 1, 1997                    $          (36)     $        19,248     $       19,212

Distributions                                             (23)              (2,208)            (2,231)

Net earnings                                               23                1,330              1,353
                                                 -------------       --------------      -------------

Balances at September 30, 1997                 $          (36)     $        18,370     $       18,334
                                                 =============       ==============      =============

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

Distributions                                             (23)              (2,208)            (2,231)

Redemptions (note 11)                                       -                  (29)               (29)

Net earnings                                               23                1,356              1,379
                                                 -------------       --------------      -------------

Balances at September 30, 1998                 $          (36)     $        17,206     $       17,170
                                                 =============       ==============      =============





See accompanying notes to financial statements
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)

Statements of Cash Flows

For the nine months ended September 30, 1998 and 1997
(Amounts in thousands)
(unaudited)
-----------------------------------------------------------------------------------------------------------------
<S><C>                                                                         <C>                  <C>
                                                                                    1998                1997
                                                                                --------------      -------------

Cash flows from operating activities:
      Net earnings                                                            $         1,379     $        1,353
      Adjustments to reconcile net earnings to
        net cash provided by operating activities:
          Depreciation                                                                    984              1,112
          Decrease in allowance for doubtful accounts, excluding
             write-off (note 10)                                                          (78)               (11)
          Gain on sale of containers                                                     (136)              (141)
          (Increase) decrease in:
             Accounts receivable, excluding write-off (note 10)                           422                172
             Net investment in direct financing leases                                    125                248
             Due from affiliates, net                                                    (269)             1,006
             Prepaid expenses                                                              37                 10
          Increase (decrease) in:
             Accounts payable and accrued liabilities                                      19                 73
             Accrued recovery costs                                                        (9)                 9
             Accrued damage protection plan costs                                          (4)               (36)
             Maintenance and repair costs                                                 (19)                (9)
             Warranty claims                                                              (48)               (48)
                                                                                --------------      -------------
                Net cash provided by operating activities                               2,403              3,738
                                                                                --------------      -------------

Cash flows from investing activities:
      Proceeds from sale of containers                                                  1,188              1,246
      Container purchases                                                                 (26)            (2,757)
                                                                                --------------      -------------
                Net cash provided by (used in) investing activities                     1,162             (1,511)
                                                                                --------------      -------------

Cash flows from financing activities:
      Redemptions of limited partnership units                                            (29)                 -
      Distributions to partners                                                        (2,231)            (2,231)
                                                                                --------------      -------------
                Net cash used in financing activities                                  (2,260)            (2,231)
                                                                                --------------      -------------

Net increase (decrease) in cash                                                         1,305                 (4)

Cash at beginning of period                                                             1,166              1,253
                                                                                --------------      -------------
Cash at end of period                                                         $         2,471     $        1,249
                                                                                ==============      =============



See accompanying notes to financial statements
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)


Statements Of Cash Flows--Continued

For the nine months ended September 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  September  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
nine-month periods ended September 30, 1998 and 1997.
<S><C>                                                       <C>            <C>             <C>             <C>
                                                               Sept. 30        Dec. 31         Sept. 30       Dec. 31
                                                                   1998           1997             1997          1996
                                                             -----------    -----------    -------------    ----------

Container purchases included in:
     Due to affiliates..............................               $  -          $  12             $  -          $  1
     Container purchases payable....................                  -              -              138           269

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

Proceeds from sale of containers included in:
     Due from affiliates............................                185            296              338           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
nine-month periods ended September 30, 1998 and 1997.

                                                                                                   1998          1997
                                                                                                   ----          ----

Container purchases recorded......................................................               $   14        $2,625
Container purchases paid..........................................................                   26         2,757

Distributions to partners declared................................................                2,231         2,231
Distributions to partners paid....................................................                2,231         2,231

Proceeds from sale of containers recorded.........................................                1,077         1,257
Proceeds from sale of containers received.........................................                1,188         1,246


See accompanying notes to financial statements
</TABLE>

<PAGE>


TCC EQUIPMENT INCOME FUND
(a California Limited Partnership)

Notes To Financial Statements

For the three and nine months  ended  September  30,  1998 and 1997  
(Amounts in thousands except for unit and 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 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 September 30, 1998 and December 31, 1997, and the
      results of its operations, changes in partners' capital and cash flows for
      the three- and nine-month  periods ended September 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 10-K.

      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 to 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 September 30, 1998 and December 31, 1997,
      the amounts accrued were $19 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 September
      30, 1998 and December 31, 1997,  the related  reserves  were $97 and $101,
      respectively.

Note 4.   Maintenance and Repair

      The Partnership accrues maintenance and repair costs on damaged containers
      in depots.  At  September  30, 1998 and  December  31,  1997,  the amounts
      accrued were $28 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  September  30,  1998 and  December  31,  1997,  the
      unamortized   portion  of  the  settlement   amount  was  $148  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  is no longer
      purchasing  additional  containers (note 12). During the nine-month period
      ended September 30, 1997, the Partnership purchased containers with a cost
      of $2,625.

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 acquisition fee, an equipment management
      fee, an incentive  management fee and an equipment  liquidation fee. These
      fees  are  for  various   services   provided  in   connection   with  the
      administration   and  management  of  the   Partnership.   There  were  no
      acquisition  fees incurred during the nine-month  period ending  September
      30, 1998. The Partnership  capitalized $131 of container  acquisition fees
      as a component  of  container  costs  during the  nine-month  period ended
      September  30,  1997.  The  Partnership  incurred $31 and $93 of incentive
      management  fees during each of the three- and  nine-month  periods  ended
      September 30, 1998 and 1997,  respectively.  No equipment liquidation fees
      were incurred during these periods.

      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
      September 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 nine-month  periods ended  September 30, 1998,  these fees totaled $76
      and $210, respectively, and $87 and $256, 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.  Total  general  and
      administrative costs allocated to the Partnership were as follows:

                                 Three months ended            Nine months ended
                                    September 30,                 September 30,
                                    -------------                 -------------
                                   1998       1997               1998      1997
                                   ----       ----               ----      ----

      Salaries                    $  25      $  37              $  79      $122
      Other                          29         27                111        99
                                   ----       ----                ---       ---
      Total general and
       administrative costs       $  54      $  64               $190      $221
                                   ====       ====                ===       ===

      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. The General
      Partners allocated the following general and  administrative  costs to the
      Partnership:

                                 Three months ended            Nine months ended
                                    September 30,                 September 30,
                                    -------------                 -------------
                                  1998        1997               1998      1997
                                  ----        ----               ----      ----

      TEM                        $  49       $  58               $172      $193
      TFS                            5           6                 18        28
                                  ----        ----                ---       ---
      Total general and
       administrative costs      $  54       $  64               $190      $221
                                  ====        ====                ===       ===

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

                                                             1998           1997
                                                             ----           ----
      Due from affiliates:
        Due from TEM...................................     $ 194          $  38
                                                             ----           ----

      Due to affiliates:
        Due to TCC.....................................         4              4
        Due to TAS.....................................         -             13
        Due to TFS.....................................        12             13
                                                             ----           ----
                                                               16             30
                                                             ----           ----
      Due from  affiliates,  net                            $ 178          $   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 and 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
      nine-month periods ended September 30, 1998 and 1997.

Note 8.   Rentals Under Long-Term Operating Leases

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

             1999.............................................           $  277
             2000.............................................               39
             2001.............................................               15
                                                                           ----

             Total minimum future rentals receivable..........           $  331
                                                                           ====

Note 9.   Direct Financing Leases

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

                                                           1998            1997
                                                           ----            ----

      Future minimum lease payments receivable............ $ 20           $ 135
      Residual value......................................    2               2
      Less:  unearned income..............................   (5)             (8)
                                                           ----            ----

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

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

             Year ending September 30:

             1999...............................................           $  14
             2000...............................................               5
             2001...............................................               1
                                                                            ----

             Total minimum lease payments receivable............           $  20
                                                                            ====

      Rental income for the three- and  nine-month  periods ended  September 30,
      1998  includes  $2 and $48 of income  from  direct  financing  leases  and
      includes $11 and $37, respectively, of income from direct financing leases
      for the comparable periods in 1997.

Note 10.   Accounts Receivable Write-Off

      During  March  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 following  redemption  offerings were  consummated by the  Partnership
      during the nine-month period ended September 30, 1998:
<TABLE>
<CAPTION>
<S><C>                                                         <C>              <C>                      <C>
                                                                 Units               Average
                                                                Redeemed        Redemption Price         Amount Paid
                                                                --------        ----------------         -----------

          Inception through December 31, 1997........              2,775             $  8.29                 $ 23

          Quarter ended:
                September 30, 1998...................              2,750              $10.54                   29
                                                                   -----                                     ----


          Partnership to date........................              5,525             $  9.41                 $ 52
                                                                   =====                                     ====


      The redemption price is fixed by formula.
</TABLE>

Note 12.   Subsequent Event

      The  Partnership is now in its liquidation  phase,  which may last between
      two to six or more years  depending on whether the  containers are sold to
      investors in one or more large  transactions or are sold gradually as they
      reach the end of their useful marine lives.

      The Partnership  anticipates that all excess cash, after regular quarterly
      distributions,   redemptions,   and  working  capital  reserves,  will  be
      distributed  to the general  and  limited  partners in the form of special
      distributions.  The Partnership declared a special distribution to limited
      partners of $735, which was paid on October 31, 1998.

      The  final  termination  and  winding  up of the  Partnership,  as well as
      payment  of  final   distributions   with  respect  to  the  Partnership's
      dissolution,  will occur at the end of the  liquidation  phase when all or
      substantially all of the Partnership's containers have been sold.


<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 nine-month periods
ended September 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 nine-month period ended September 30,
1998, the Partnership redeemed 2,750 units for a total dollar amount of $29. The
Partnership used cash flow from operations to pay for the redeemed 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 nine-month period ended September 30, 1998, the Partnership  declared
cash distributions to limited partners  pertaining to the fourth quarter of 1997
through the second quarter of 1998, in the amount of $2,208. 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,  $852 of these  distributions  was a return of capital and the
balance was from net income.

Net cash provided by operating  activities  for the  nine-month  periods  ending
September 30, 1998 and 1997, was $2,403 and $3,738,  respectively.  The decrease
of $1,335,  or 36%, was primarily  attributable  to the  fluctuation in due from
affiliates,  net which  increased $269 in the nine-month  period ended September
30,  1998  compared to a decrease  of $1,006 in the  equivalent  period in 1997.
Fluctuations  in due from  affiliates,  net result  from timing  differences  in
payment of expenses and fees and in the  remittance of net rental  revenues from
TEM.

For the  nine-month  period  ending  September  30, 1998,  net cash  provided by
investing  activities  (the purchase and sale of containers) was $1,162 compared
to net cash used in investing  activities of $1,511 for the comparable period in
1997.  Net cash  provided by investing  activities  increased  $2,673  primarily
because the Partnership is no longer purchasing containers. Effective January 1,
1998,  the General  Partners  determined  that it is in the best interest of the
Partnership to no longer  purchase  containers,  as the  Partnership  was in its
ninth full year of  operations.  The  Partnership  will sell the  containers  to
investors as discussed  below or will continue to sell  containers as they reach
the end of their useful lives.  Additionally,  TEM  anticipates  selling certain
older  containers  in  surplus  locations  where  demand  is weak,  rather  than
incurring  additional  storage  charges while  waiting for market  conditions to
improve or incurring  expensive  repositioning costs transporting the containers
to demand  locations.  Market conditions are discussed more fully under "Results
of Operations".

The Partnership is now in its liquidation  phase,  which may last between two to
six or more years  depending on whether the  containers are sold to investors in
one or more large  transactions  or are sold  gradually as they reach the end of
their useful marine lives.

The  Partnership  anticipates  that all excess  cash,  after  regular  quarterly
distributions, redemptions, and working capital reserves, will be distributed to
the  general and limited  partners in the form of special  distributions.  These
distributions  will  consist  of cash from  operations  and/or  cash from  sales
proceeds. The Partnership declared a special distribution to limited partners of
$735 to be paid in October 1998. On a cash basis, $166 of this distribution will
be from  operations  and the  remaining  balance  of $569  will be a  return  of
capital. On a GAAP basis the entire distribution will be a return of capital. As
the Partnership's container fleet decreases, cash from operations is expected to
decrease,  while cash from investing  activities is expected to increase as more
containers are sold. Consequently, a greater portion of all future distributions
will be considered a return of capital.

The final  termination and winding up of the Partnership,  as well as payment of
final distributions with respect to the Partnership's dissolution, will occur at
the  end  of  the  liquidation  phase  when  all  or  substantially  all  of the
Partnership's containers have been sold.

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 nine-month periods ended September 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
                                                               ----        ----

                 Beginning container fleet...............      7,887      7,849
                 Ending container fleet..................      7,044      7,938
                 Average container fleet.................      7,466      7,894

The decline in the  average  container  fleet of 5% from the nine  months  ended
September  30,  1997  to  the  equivalent  period  in  1998  resulted  from  the
Partnership  having sold more  containers  than it purchased since September 30,
1997.  Average  container 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 purchase  additional  containers.  The
Partnership  also expects that the size of its container  fleet will decline due
to the  Partnership's  sale of certain  containers in low demand  locations,  as
discussed  above  under  "Liquidity  and  Capital  Resources".  This  decline is
expected to be limited by the fact that only 5% of the  Partnership's  container
fleet was in these lower demand locations as of October 15, 1998. The decline in
the container  fleet has contributed to an overall decline in rental income from
the  nine-month  period ending  September 30, 1997 to the  equivalent  period in
1998.  This  decline is expected to continue in future  years as the size of the
Partnership's container fleet decreases.

Rental income and direct container expenses are also affected by the utilization
of the container  fleet,  which was 81% and 79% on average during the nine-month
periods ended  September 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
nine-month periods ended September 30, 1998 and 1997.

The  Partnership's  income from  operations  for the  nine-month  periods ending
September  30,  1998 and 1997 was  $1,172 for both  periods on rental  income of
$3,361 and $3,596,  respectively.  The decrease in rental income of $235, or 7%,
from the nine-month  period ended September 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 $268, or 8%. This decrease
was primarily due to decreases in average rental rates and the average container
fleet  of 5%  each,  and  was  offset  by an  increase  in the  average  on-hire
(utilization) percentage of 3% and a decrease in leasing incentives of 29%.

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.  The decline in the
purchase price of new containers during this period,  which continued into 1998,
has also caused additional downward pressure on rental rates.

Additionally,  the weakening of many Asian  currencies in 1998 has resulted in a
significant  increase  in exports  from Asia to North  America  and Europe and a
corresponding  decrease in imports into Asia from North America and Europe. This
trade  imbalance has created a strong  demand for  containers in Asia and a weak
demand for  containers in North America and Europe.  This imbalance has resulted
in  the  stabilization  of  average  utilization  and  the  decline  in  leasing
incentives,  but also  resulted in an unusually  high  build-up of containers in
lower demand  locations  during the nine-month  period ended  September 30, 1998
compared to the equivalent  period in 1997.  Although average  utilization rates
have stabilized,  utilization  rates have been slowly declining since late 1997.
In order to improve  utilization and alleviate the container  build-up,  TEM has
begun an aggressive  effort to reposition  newer  containers to demand locations
and  anticipates   selling  certain  older  containers  in  these  lower  demand
locations,  where  repositioning  costs are  high.  The Partnership  anticipates
incurring  increased  direct  container  expenses and some losses on the sale of
containers as a result of  repositioning  and selling  containers in these lower
demand  locations.  These losses are  anticipated to be limited by the fact that
only 5% of the Partnership's container fleet was in these lower demand locations
as of October 15, 1998.  However,  the expected increase in repositioning  costs
may have a material negative effect on the Partnership's  results of operations.
For the near term,  the  General  Partners do not  foresee  material  changes in
existing  market  conditions and caution that both  utilization  and lease rates
could 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. At
September  30,  1998 and 1997,  there were 24 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 (handling income) and income from charges to lessees for a
Damage  Protection  Plan (DPP).  For the nine-month  period ended  September 30,
1998,  the total of these other rental income items was $415, an increase of $33
from the  equivalent  period  in 1997.  The  increase  was  primarily  due to an
increase in location  income of $132,  offset by  decreases  in handling and DPP
income of $39 and $24, respectively. Location income increased due to a decrease
in credits given to lessees for picking up containers from certain locations and
due to the inclusion of certain credits  received during 1997 and 1998 which had
been previously applied against repositioning expense. Handling income decreased
due to the decrease in container  movement,  and DPP income  decreased  due to a
decrease in the average DPP price charged per container.

Direct  container  expenses  increased  $52, or 8%, from the  nine-month  period
ending  September 30, 1997 to the  equivalent  period in 1998.  The increase was
primarily  due to an  increase  in  repositioning  expense  of $107,  offset  by
decreases  in  storage  and  handling  expenses  of $36 and  $25,  respectively.
Repositioning  expense increased due to an increase in the average repositioning
cost per container, an increase in the number of containers repositioned and the
removal of certain  credits from  repositioning  costs to other rental income as
discussed  above.  Storage  expense  decreased  primarily due to the increase in
average  utilization  noted above,  and handling  expense  decreased  due to the
decrease in container movement.

Bad debt  expense  decreased  from an expense of $32 for the  nine-month  period
ended  September 30, 1997 to a benefit of $36 in the comparable  period in 1998.
The benefit  recorded for the period ending September 30, 1998 resulted from the
effect of insurance  proceeds  received for certain  receivables  against  which
reserves had been  recorded in 1994 and 1995,  as well as to the  resolution  of
payment issues with one lessee.

Depreciation  expense  decreased $128, or 12%, from the nine-month  period ended
September 30, 1997 to the comparable period in 1998 primarily due to the decline
in average fleet size and due to certain  containers,  which were acquired used,
that have now been fully depreciated.

Management fees to affiliates  decreased $46, or 13%, from the nine-month period
ended  September 30, 1997 to the comparable  period in 1998 due to a decrease in
equipment  management  fees.  Equipment  management  fees  decreased  due  to an
adjustment  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 $31, or 14%, from the
nine-month  period ended September 30, 1997 to the comparable period in 1998 due
to a decrease in overhead costs allocated by TFS and TEM.

Other income  increased  $26, or 14%,  primarily  due to an increase in interest
income  of $31 from the  nine-month  period  ending  September  30,  1997 to the
equivalent period in 1998.

Net earnings per limited partnership unit increased from $0.90 to $0.92 from the
nine-month  period  ending  September  30,  1997 to the  same  period  in  1998,
reflecting  the increase in net  earnings  allocated  to limited  partners  from
$1,330 to $1,356, respectively.


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

The  Partnership's  income from  operations for the  three-month  periods ending
September 30, 1998 and 1997 was $356 and $408, respectively, on rental income of
$1,088 and $1,208  respectively.  The decrease in rental income of $120, or 10%,
from the three-month period ended September 30, 1997 to the comparable period in
1998 was primarily due to a decrease in income from  container  rentals of $135,
or 13%. This decrease was primarily due to the decrease in the average container
fleet of 11% and the  decrease in average  rental rates of 3%, and was offset by
the decrease in leasing incentives of 67%.

Other rental  income was $145 for the  three-month  period ended  September  30,
1998, an increase of $15 from the  equivalent  period in 1997.  The increase was
primarily due to an increase in location  income of $47, offset by a decrease in
handling income of $24.  Location income  increased due to a decrease in credits
given to lessees for picking up  containers  from  certain  locations.  Handling
income  decreased  due to a decrease in container  movement,  offset by a higher
average handling price charged per container.

Direct  container  expenses  decreased  $5, or 2%, from the  three-month  period
ending  September 30, 1997 to the  equivalent  period in 1998.  The decrease was
primarily due to a decrease in handling  expense of $21 offset by an increase in
DPP expense of $14. Handling expense decreased  primarily due to the decrease in
container  movement,  offset  by a higher  average  handling  cost  charged  per
container.  DPP expense increased  primarily due to an increase in the number of
containers  requiring  repairs,  offset by a decrease in the average repair cost
per container.

Bad debt expense remained fairly  comparable for the three-month  periods ending
September 30, 1998 and 1997.

Depreciation  expense  decreased $41, or 11%, from the three-month  period ended
September 30, 1997 to the comparable  period in 1998 due to the reduction in the
average fleet size and due to certain  containers  which were acquired used that
have now been fully depreciated.

Management fees to affiliates  decreased $11, or 9%, from the three-month period
ended September 30, 1997 to the comparable  period in 1998, due to a decrease in
equipment  management  fees  resulting  primarily  from the  decrease  in rental
income.

General and administrative  costs to affiliates  decreased $10, or 16%, from the
three-month period ended September 30, 1997 to the comparable period in 1998 due
to a decrease in overhead costs allocated by TFS and TEM.

Other  income  decreased  $28,  or  51%,  due to a  decrease  in gain on sale of
containers,  from a  gain  of $44 to a loss  of $2,  offset  by an  increase  in
interest income of $18 from the three-month  period ending September 30, 1997 to
the same period in 1998.

Net earnings per limited partnership unit decreased from $0.31 to $0.26 from the
three-month  period  ending  September  30,  1997 to the  same  period  in 1998,
reflecting the decrease in net earnings  allocated to limited partners from $455
to $375, respectively.

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 September 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.

Readiness for Year 2000

Many computer systems may experience difficulty processing dates beyond the year
1999; as a  consequence,  some computer  hardware and software at most companies
will need to be modified  or replaced  prior to the year 2000 in order to remain
functional.  The  Partnership  relies on the  financial  and  operating  systems
provided  by the  General  Partners;  these  systems  include  both  information
technology (IT) systems as well as non-information  technology (non-IT) systems.
For  IT  and   non-IT   systems   developed   by   independent   third   parties
(externally-developed)  the General Partners have obtained  representations from
their vendors and suppliers  that these systems are Year 2000 compliant and have
internally tested significant systems as operational.  The General Partners have
reviewed all internally-developed IT and non-IT systems for Year 2000 issues and
identified  certain  of these  systems  which  required  revision.  The  General
Partners have  completed the revision and testing of these  identified  systems,
and these revised systems are now operational.

The cost of the revisions and testing  relating to these systems was incurred by
TEM and a  portion  of the  cost was  allocated  to the  Partnership  as part of
general and administrative costs allocated from TEM. While Year 2000 remediation
costs were not  specifically  identified,  it is estimated  that total Year 2000
related expenses included in allocated overhead from TEM were less than $10. The
Partnership  and the General  Partners do not anticipate  incurring  significant
additional  remediation costs related to the Year 2000 issue.  There has been no
material  effect  on  the  Partnership's  financial  condition  and  results  of
operations as a result of TEM's delay in routine maintenance and repair projects
as a result of Year 2000 remediation.

Year 2000  compliance  testing was  undertaken  by the General  Partners on both
externally-  and  internally-developed   systems.   Standard  transactions  were
processed under simulated  operating  conditions for dates crossing over January
1, 2000 as well as for other  critical  dates such as February 29, 2000.  In the
standard business  scenarios tested, the identified systems appeared to function
correctly. Under nonstandard conditions or unforeseen scenarios, the results may
be different.  Therefore,  these tests,  regardless  of how carefully  they were
conducted,  cannot  guarantee that the General  Partners'  systems will function
without error in the Year 2000 and beyond.  If these systems are not operational
in the Year 2000,  the General  Partners have  determined  that they can operate
manually  for  approximately  two to three months  while  correcting  the system
problems before  experiencing  material adverse effects on the Partnership's and
the General  Partners'  business and results of  operations.  However,  shifting
portions of the daily  operations to manual  processes may result in time delays
and  increased  processing  costs.  Additionally,  the  Partnership  and General
Partners  may  not  be  able  to  provide  lessees  with  timely  and  pertinent
information,  which may  negatively  affect  customer  relations and lead to the
potential loss of lessees,  even though the immediate  monetary  consequences of
this would be limited by the standard  Partnership lease agreements  between the
lessees and the Partnership.

The Partnership and the General Partners are also continuing their assessment of
Year 2000  issues  with third  parties,  comprised  of  lessees,  manufacturers,
depots,  and other  vendors and  suppliers,  with whom the  Partnership  and the
General  Partners  have  a  material  business   relationship  (Third  Parties).
Currently,   the  Partnership  and  the  General  Partners  believe  that  if  a
significant  portion of its lessees is non-compliant for a substantial length of
time, the Partnership's  operations and financial  condition would be materially
adversely  affected.  Non-compliance  by other Third  Parties is not expected to
have a material effect on the Partnership's  results of operations and financial
condition.  The General  Partners  have sent  letters to lessees and other Third
Parties  requesting  representations  on their Year 2000 readiness.  The General
Partners  have  received  responses to fewer than 50% of the letters  sent.  The
General  Partners  will  follow up with  non-respondents  and will  continue  to
identify  additional Third Parties whose Year 2000 readiness should be assessed.
As this  assessment has not been  completed,  the General  Partners have not yet
assumed that a lack of response means that the Third Party will not be Year 2000
compliant.

Nevertheless,  the  Partnership and the General  Partners  believe that they are
likely to encounter  Year 2000 problems with Third Parties,  particularly  those
with significant  operations  within  countries that are not actively  promoting
correction  of Year 2000  issues.  In the event that the  systems of these Third
Parties  are not Year 2000  compliant  by  January 1,  2000,  the  Partnership's
business may be disrupted and results of operations  may be adversely  affected.
Possible  consequences of Year 2000 non-compliance  among Third Parties include,
but are not limited to, (i) TEM's  inability to provide service to certain areas
of the world,  (ii) delays in container  movement,  (iii) payment and collection
difficulties,  and (iv) invoicing  errors due to late reporting of transactions.
These types of problems could result in additional  operating  costs and loss of
lessee business.  As discussed above, the General Partners are prepared to shift
portions of their daily  operations  to manual  processes  in the event of Third
Party  non-compliance.   With  respect  to  manufacturers,   vendors  and  other
suppliers, the General Partners would also attempt to find alternate sources for
goods and  services.  With  respect to depots and agents who handle,  inspect or
repair  containers,  if the majority of the computer systems and networks of TEM
are  operational,  the  General  Partners  believe  that  they  will  be able to
compensate  manually for these Third Parties'  failures (e.g.,  one field office
performing data entry for another,  communication  with depots conducted without
computers), using temporary personnel at additional cost. Although costs will be
incurred to pay for the temporary  personnel,  the  Partnership  and the General
Partners  do not expect  these costs to be  material  to the  Partnership.  With
respect to lessees'  non-compliance,  the General  Partners would compensate for
communications failures manually. If a lessee's noncompliance is broad enough to
disrupt  significantly  the operations of its shipping  business,  the resulting
loss of revenue could result in the lessee renting fewer  containers,  adversely
affecting the Partnership's  business.  The Partnership and the General Partners
are unable to estimate the financial impact of these problems, but to the extent
that  lessees   problems  result  in  weakening   demand  for  containers,   the
Partnership's  results of operations would likely be adversely affected. If Year
2000 problems result in delays in collections,  either because of the additional
time  required  to  communicate  with  lessees or because  of  lessees'  loss of
revenues,  the  Partnership's  cash flow could be affected and  distributions to
general and limited  partners could be reduced.  The Partnership and the General
Partners  believe  that these  risks are  inherent in the  industry  and are not
specific to the Partnership or General Partners.

Forward Looking Statements and Other Risk Factors

The foregoing analysis of Year 2000 issues includes  forward-looking  statements
and  predictions  about  possible or future  events,  results of operations  and
financial condition. As such, this analysis may prove to be inaccurate,  because
of the  assumptions  made by the  Partnership  and the  General  Partners or the
actual development of future events. No assurance can be given that any of these
forward-looking  statements and predictions  will ultimately prove to be correct
or  even  substantially  correct.  Some  of the  risks  relating  to  Year  2000
compliance are described above. In addition,  in analyzing Year 2000 issues, the
Partnership and the General Partners have assumed that the infrastructure of the
United States and most other  countries,  including  ports and customs,  remains
intact.  If the  infrastructure  of one or  more  countries  were to  fail,  the
resulting  business  disruption  would  likely  have an  adverse  effect  on the
Partnership and the General Partners.

Various  other risks and  uncertainties  could also affect the  Partnership  and
could affect the Year 2000 analysis  causing the effect on the Partnership to be
more severe than discussed above. These risks and uncertainties include, but are
not limited to, the following. As noted above, the Partnerships' and the General
Partners'  Year 2000  compliance  testing  cannot  guarantee  that all  computer
systems  will  function  without  error  beyond the Year  2000.  Tests were only
conducted of normal  business  scenarios,  and no  independent  verification  or
testing was used. Risks also exist with respect to Year 2000 compliance by Third
Parties,  such as the risk that an external party,  who may have no relationship
to the Partnership or General Partners,  but who has a significant  relationship
with one or more Third Parties, may have a system failure that adversely affects
the Partnership's ability to conduct its business. While the Partnership and the
General Partners are attempting to identify such external parties,  no assurance
can be given that they will be able to do so.  Furthermore,  Third  Parties with
direct relationships with the Partnership, whose systems have been identified as
likely to be Year 2000  compliant,  may  suffer a  breakdown  due to  unforeseen
circumstances. It is also possible that the information collected by the General
Partners  from these Third Parties  regarding  their  compliance  with Year 2000
issues  may be  incorrect.  Finally,  it  should  be noted  that  the  foregoing
discussion of Year 2000 issues assumes that to the extent the General  Partners'
systems fail,  either  because of unforeseen  complications  or because of Third
Parties  failure,  switching to manual  operations will allow the Partnership to
continue to conduct its business. While the Partnership and the General Partners
believe this assumption to be reasonable,  if it is incorrect, the Partnership's
results of operations would likely be adversely affected.




<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:  November 11, 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,                      November 11, 1998
John R. Rhodes                           (Principal Financial and
                                         Accounting Officer) and
                                         Secretary




________________________                 President (Principal Executive                 November 11, 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:  November 11, 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,                      November 11, 1998
________________________                 (Principal Financial and
John R. Rhodes                           Accounting Officer) and
                                         Secretary



/s/Philip K. Brewer                      President (Principal Executive                 November 11, 1998
________________________                 Officer)
Philip K. Brewer                         


</TABLE>