UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-K

(Mark One)

[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                   For the fiscal year ended December 31, 2000

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                        For the transition period from to


                         Commission file number 0-19144

                            CNL INCOME FUND VI, LTD.
             (Exact name of registrant as specified in its charter)

         Florida                                        59-2922954
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

                             450 South Orange Avenue
                             Orlando, Florida 32801
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (407) 540-2000

          Securities registered pursuant to Section 12 (b) of the Act:

    Title of each class:                   Name of exchange on which registered:
             None                                     Not Applicable

           Securities registered pursuant to section 12(g) of the Act:

              Units of limited partnership interest ($500 per Unit)
                                (Title of class)

         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 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

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [x]

         Aggregate market value of the voting stock held by nonaffiliates of the
registrant:  The  registrant  registered  an offering of 70,000 units of limited
partnership  interest  (the  "Units") on Form S-11 under the  Securities  Act of
1933, as amended. Since no established market for such Units exists, there is no
market value for such Units. Each Unit was originally sold at $500 per Unit.

                      DOCUMENTS INCORPORATED BY REFERENCE:
                                      None



<PAGE>



                                     PART I


Item 1.  Business

         CNL Income Fund VI, Ltd. (the  "Registrant" or the  "Partnership") is a
limited  partnership  which was  organized  pursuant to the laws of the State of
Florida on August 17, 1988. The general  partners of the  Partnership are Robert
A.  Bourne,  James  M.  Seneff,  Jr.  and  CNL  Realty  Corporation,  a  Florida
corporation (the "General Partners"). Beginning on June 8, 1989, the Partnership
offered  for  sale up to  $35,000,000  in  limited  partnership  interests  (the
"Units") (70,000 Units at $500 per Unit) pursuant to a registration statement on
Form S-11 under the Securities Act of 1933, as amended,  effective  December 16,
1988.  The offering  terminated  on January 22, 1990,  at which date the maximum
offering  proceeds of  $35,000,000  had been  received  from  investors who were
admitted to the Partnership as limited partners (the "Limited Partners").

         The  Partnership  was organized to acquire both newly  constructed  and
existing  restaurant  properties,  as well as properties upon which  restaurants
were to be  constructed  (the  "Properties"),  which  are  leased  primarily  to
operators  of  selected   national  and  regional   fast-food  and  family-style
restaurant  chains (the  "Restaurant  Chains").  Net proceeds to the Partnership
from its  offering of Units,  after  deduction  of  organizational  and offering
expenses, totaled $30,975,000, and were used to acquire 42 Properties, including
interests in four Properties owned by joint ventures in which the Partnership is
a co-venturer.

         During the year ended  December  31,  1994,  the  Partnership  sold its
Properties  in  Batesville  and  Heber  Springs,  Arkansas,  to the  tenant  and
reinvested  the net sales  proceeds  in a Jack in the Box  Property  in  Dallas,
Texas,  and a Jack in the Box  Property  in  Yuma,  Arizona,  which  is owned as
tenants-in-common with an affiliate of the General Partners. In addition, during
1995,  the  Partnership  sold its  Property  in Little  Canada,  Minnesota,  and
reinvested  the net sales  proceeds  in a  Denny's  Property  in  Broken  Arrow,
Oklahoma,  in 1995 and in a Property  located in Clinton,  North Carolina,  with
affiliates of the General Partners as  tenants-in-common,  in 1996. Also, during
1996,  the  Partnership  sold its Property in Dallas,  Texas,  and in 1997,  the
Partnership  reinvested the net sales proceeds in a Bertucci's  Property located
in  Marietta,  Georgia.  In  addition,  during 1997,  the  Partnership  sold its
Properties in Plattsmouth,  Nebraska;  Venice,  Florida;  Naples,  Florida;  and
Whitehall,  Michigan,  and the  Property  in Yuma,  Arizona,  which  was held as
tenants-in-common  with an affiliate of the General  Partners,  and reinvested a
portion  of these  net sales  proceeds  in two IHOP  Properties,  one in each of
Elgin,  Illinois,  and  Manassas,  Virginia,  and in a  Property  in  Vancouver,
Washington,  as  tenants-in-common  with affiliates of the General Partners.  In
addition,  Show Low Joint Venture, a joint venture in which the Partnership is a
co-venturer with an affiliate of the General Partners, sold its Property in Show
Low, Arizona.  The joint venture reinvested the net sales proceeds in a Property
in Greensboro,  North Carolina.  During 1998, the Partnership reinvested the net
sales  proceeds  from the sales of the  Properties  in  Whitehall,  Michigan and
Plattsmouth,  Nebraska in one Property in Overland Park, Kansas and one Property
in Memphis,  Tennessee,  as  tenants-in-common,  with  affiliates of the General
Partners.  In addition,  in 1998, the Partnership sold its Properties in Deland,
Florida;  Liverpool, New York; Melbourne,  Florida; and Bellevue,  Nebraska. The
Partnership  reinvested  the net sales proceeds from the sale of the Property in
Deland,  Florida in one Property in Fort Myers,  Florida, as  tenants-in-common,
with an affiliate of the General Partners and the Partnership reinvested the net
sales  proceeds  from the sales of the  Properties  in  Melbourne,  Florida  and
Bellevue,  Nebraska in two joint  ventures,  Warren Joint  Venture and Melbourne
Joint Venture,  respectively, to each purchase and hold one restaurant Property.
In 1999, the Partnership  sold four of its Burger King Properties all located in
Tennessee  and  reinvested a portion of the net sales  proceeds in Properties in
Baytown and Round Rock, Texas and Dublin, California,  each as tenants-in-common
with affiliates of the General Partners. In 2000, the Partnership reinvested the
majority of the remaining net sales  proceeds in a Property in Niles,  Illinois,
as  tenants-in-common  with an affiliate of the General  Partners.  In addition,
during 2000, the Partnership sold four of its Popeye's Properties all located in
Florida.

         As a result of the above  transactions,  as of December 31,  2000,  the
Partnership owned 38 Properties.  The 38 Properties include six Properties owned
by joint ventures in which the  Partnership is a co-venturer and nine Properties
owned  with   affiliates  as   tenants-in-common.   During  February  2001,  the
Partnership  reinvested  the  net  sale  proceeds  from  the  sale  of the  four
Properties in Florida in two Properties located in Burley, Indiana and Cleburne,
Texas.  Generally,  the  Properties  are leased on a  triple-net  basis with the
lessees responsible for all repairs and maintenance,  property taxes,  insurance
and utilities.

         The  Partnership  will hold its Properties  until the General  Partners
determine that the sale or other  disposition of the Properties is  advantageous
in view of the Partnership's investment objectives.  In deciding whether to sell
Properties, the General Partners will consider factors such as potential capital
appreciation,  net cash flow and  federal  income  tax  considerations.  Certain
lessees also have been granted options to purchase Properties,  generally at the
Property's  then fair market  value after a specified  portion of the lease term
has elapsed.  The  Partnership has no obligation to sell all or any portion of a
Property at any  particular  time,  except as may be required  under property or
joint venture purchase options granted to certain lessees.

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
of Merger with CNL American Properties Fund, Inc. ("APF"), pursuant to which the
Partnership  would be merged with and into a subsidiary  of APF (the  "Merger").
APF is a real estate investment trust whose primary business is the ownership of
restaurant properties leased on a long-term,  "triple-net" basis to operators of
national and regional restaurant chains. Under the Agreement and Plan of Merger,
APF was to issue shares of its common stock as consideration  for the Merger. On
March 1, 2000,  the General  Partners and APF  announced  that they had mutually
agreed to terminate the Agreement and Plan of Merger. The agreement to terminate
the  Agreement  and Plan of Merger  was based,  in large  part,  on the  General
Partners'  concern  that,  in light of market  conditions  relating  to publicly
traded  real  estate  investment  trusts,  the  value  of  the  transaction  had
diminished.  As a result of such diminishment,  the General Partners' ability to
unequivocally  recommend  voting for the  transaction,  in the exercise of their
fiduciary duties, had become questionable.

Leases

         Although there are variations in the specific terms of the leases,  the
following  is  a  summarized   description  of  the  general  structure  of  the
Partnership's leases. The leases of the Properties owned by the Partnership, the
joint  ventures in which the  Partnership  is a co-venturer  and the  properties
owned with affiliates as  tenants-in-common  provide for initial terms,  ranging
from five to 20 years (the average being 18 years),  and expire between 2003 and
2019.  The  leases  generally  are  on a  triple-net  basis,  with  the  lessees
responsible  for all repairs and  maintenance,  property  taxes,  insurance  and
utilities.  The leases of the Properties  provide for minimum base annual rental
payments (payable in monthly installments) ranging from approximately $37,900 to
$222,800.  Generally,  the leases provide for percentage  rent based on sales in
excess of a specified  amount.  In addition,  some of the leases  provide  that,
commencing  in the fourth to sixth lease year,  the  percentage  rent will be an
amount equal to the greater of the percentage  rent  calculated  under the lease
formula or a  specified  percentage  (ranging  from one to five  percent) of the
purchase price or gross sales.

         Generally,  the  leases  of the  Properties  provide  for  two to  four
five-year  renewal  options  subject  to the same  terms and  conditions  as the
initial lease.  Lessees of 32 of the  Partnership's 38 Properties also have been
granted options to purchase Properties at the Property's then fair market value,
or pursuant to a formula based on the original  purchase  price of the Property,
after a specified portion of the lease term has elapsed.  Fair market value will
be determined through an appraisal by an independent appraisal firm.

         The leases also  generally  provide that, in the event the  Partnership
wishes to sell the Property  subject to that lease,  the Partnership  first must
offer the  lessee  the right to  purchase  the  Property  on the same  terms and
conditions,  and for the same  price,  as any offer  which the  Partnership  has
received for the sale of the Property.

         In January 2000, the  Partnership  reinvested in the net sales proceeds
from the 1999  sale of a  Property  in  Sevierville,  Tennessee,  in a  Property
located in Niles ,  Illinois,  with an  affiliate  of the General  Partners,  as
tenants-in-common,  also as  described  below in "Joint  Venture  and Tenancy in
Common Arrangement." In addition,  in February 2001, the Partnership  reinvested
the  net  sales  proceeds  from  the  four  Properties  sold in  Florida  in two
Properties located in Burley,  Indiana and Cleburne,  Texas. The lease terms for
these Properties are substantially  the same as the Partnership's  other leases,
as described above.


<PAGE>


Major Tenants

         During 2000, two lessees of the Partnership and its consolidated  joint
venture,  Golden Corral Corporation and IHOP Properties,  Inc., each contributed
more than ten  percent of the  Partnership's  total  rental  and  earned  income
(including  rental income from the Partnership's  consolidated  joint venture in
which the Partnership is a co-venturer and the Partnership's share of the rental
and  earned  income  from the five  Properties  owned  by  unconsolidated  joint
venturers and nine Properties  owned with affiliates of the General  Partners as
tenants-in-common).  As of December 31, 2000, Golden Corral  Corporation was the
lessee under leases relating to five restaurants and IHOP  Properties,  Inc. was
the lessee under leases relating to eight  restaurants.  It is anticipated that,
based on the minimum rental payments  required by the leases,  these two lessees
each will  continue to  contribute  more than ten  percent of the  Partnership's
total rental and earned  income in 2001.  In addition,  two  Restaurant  Chains,
Golden Corral Family  Steakhouse  Restaurants  ("Golden  Corral") and IHOP, each
accounted for more than ten percent of the Partnership's total rental and earned
income in 2000  (including  rental  income from the  Partnership's  consolidated
joint venture and the  Partnership's  share of the rental and earned income from
the five  Properties  owned  by  unconsolidated  joint  ventures  in  which  the
Partnership is a co-venturer  and nine  Properties  owned with affiliates of the
General  Partners as  tenants-in-common).  In 2001, it is anticipated that these
two Restaurant Chains each will continue to account for more than ten percent of
the total rental and earned income to which the  Partnership  is entitled  under
the terms of the leases. Any failure of these lessees or Restaurant Chains could
materially  affect the  Partnership's  income if the  Partnership is not able to
re-lease the  Properties  in a timely  manner.  As of December 31, 2000,  Golden
Corral Corporation and IHOP Properties, Inc. leased Properties with an aggregate
carrying value in excess of 20 percent of the total assets of the Partnership.

Joint Venture and Tenancy in Common Arrangements

         The  Partnership  has entered into a joint  venture  arrangement,  Caro
Joint Venture, with an unaffiliated entity to purchase and hold one Property. In
addition,  the Partnership has entered into the following separate joint venture
arrangements: Auburn Joint Venture with CNL Income Fund IV, Ltd.; Show Low Joint
Venture with CNL Income Fund II, Ltd.;  Asheville  Joint Venture with CNL Income
Fund VIII,  Ltd.;  Melbourne  Joint Venture with CNL Income Fund XIV,  Ltd.; and
Warren Joint Venture with CNL Income Fund IV, Ltd. Each joint venture was formed
to purchase and hold one  property.  Each CNL Income Fund is an affiliate of the
General Partners and is a limited partnership  organized pursuant to the laws of
the State of Florida.

         The joint  venture  arrangements  provide for the  Partnership  and its
joint venture  partners to share in all costs and benefits  associated  with the
joint venture in accordance  with their  respective  percentage  interest in the
joint venture. The Partnership has 66.14% interest in Caro Joint Venture, a 3.9%
interest  in Auburn  Joint  Venture,  a 36  percent  interest  in Show Low Joint
Venture,  a 14.46% interest in Asheville Joint Venture, a 50 percent interest in
Melbourne  Joint Venture,  and a 64.29%  interest in Warren Joint  Venture.  The
Partnership and its joint venture  partners are jointly and severally liable for
all debts, obligations and other liabilities of the joint venture.

         Each  joint  venture  has an initial  term of 20 years  and,  after the
expiration of the initial term,  continues in existence from year to year unless
terminated  at the option of either joint  venturer by an event of  dissolution.
Events of dissolution  include the bankruptcy,  insolvency or termination of any
joint  venturer,  sale of the  Property  owned by the joint  venture  and mutual
agreement of the Partnership and its joint venture partner to dissolve the joint
venture.

         The Partnership has management control of Caro Joint Venture and shares
management  control equally with  affiliates of the General  Partners for Auburn
Joint Venture, Show Low Joint Venture,  Asheville Joint Venture, Melbourne Joint
Venture,  and Warren Joint Venture.  The joint venture agreements  restrict each
venturer's  ability  to sell,  transfer  to assign  its joint  venture  interest
without  first  offering it for sale to its joint venture  partner,  either upon
such terms and  conditions  as to which the venturers may agree or, in the event
the venturers cannot agree, on the same terms and conditions as any offer from a
third party to purchase such joint venture interest.

         Net cash flow from  operations of Auburn Joint Venture,  Show Low Joint
Venture, Caro Joint Venture,  Asheville Joint Venture,  Melbourne Joint Venture,
and Warren Joint Venture is distributed 3.9%, 36.0%, 66.14%,  14.46%, 50 percent
and 64.29%,  respectively,  to the Partnership and the balance is distributed to
each of the other joint  venture  partners  in  accordance  with its  respective
percentage interest in the joint venture. Any liquidation proceeds, after paying
joint  venture  debts  and  liabilities  and  funding  reserves  for  contingent
liabilities,  will be  distributed  first to the  joint  venture  partners  with
positive  capital  account  balances in proportion  to such balances  until such
balances  equal  zero,  and  thereafter  in  proportion  to each  joint  venture
partner's percentage interest in the joint venture.

         In addition to the above joint venture  arrangements,  the  Partnership
has entered into  agreements  to hold a Property in  Vancouver,  Washington,  as
tenants-in-common, with CNL Income Fund, Ltd., CNL Income Fund II, Ltd., and CNL
Income   Fund  V,  Ltd.,   a   Property   in   Clinton,   North   Carolina,   as
tenants-in-common,  with CNL Income Fund IV, Ltd.,  CNL Income Fund X, Ltd., and
CNL  Income  Fund  XV,  Ltd.,   a  Property  in  Overland   Park,   Kansas,   as
tenants-in-common,  with CNL Income Fund II, Ltd. and CNL Income Fund III, Ltd.,
a Property in Memphis, Tennessee, as tenants-in-common, with CNL Income Fund II,
Ltd.  and CNL Income  Fund XVI,  Ltd.,  a Property  in Ft.  Myers,  Florida,  as
tenants-in-common,  with CNL Income Fund XV, Ltd., a Property in Baytown, Texas,
as tenants-in-common,  with CNL Income Fund III, Ltd., a Property in Round Rock,
Texas,  as  tenants-in-common,  with CNL Income Fund XI, Ltd.  and a Property in
Dublin,  California, as tenants-in-common with CNL Income Fund IX, Ltd. Each CNL
Income Fund is an affiliate of the General Partners.  The agreements provide for
the  Partnership  and the  affiliates  to share in the profits and losses of the
Property and net cash flow from the  Properties,  in  proportion to each party's
percentage  interest.  The Partnership owns a 23.04%, an 18 percent, a 34.74%, a
46.2%, an 85 percent, an 80 percent, an 77 percent and an 75 percent interest in
the Properties in Vancouver, Washington; Clinton, North Carolina; Overland Park,
Kansas;  Memphis,  Tennessee;  and Ft. Myers,  Florida;  Bay Town, Texas,; Round
Rock, Texas; and Dublin, California, respectively.

         In January 2000,  the  Partnership  entered into an agreement to hold a
Baker's  Square  Property in Niles,  Illinois,  as  tenants-in-common,  with CNL
Income Fund XIV, Ltd., affiliate of the General Partners. The agreement provides
for the Partnership and the affiliates to share in the profits and losses of the
Property  and  net  cash  flow  from  the   Property,   in  proportion  to  each
co-venturer's percentage interest. The Partnership owns a 74 percent interest in
this Property.

         Each of the affiliates is a limited  partnership  organized pursuant to
the laws of the state of Florida. The tenancy in common agreement restricts each
party's  ability to sell,  transfer,  or assign its  interest  in the tenancy in
common's Property without first offering it for sale to the remaining parties.

         The use of joint venture and tenancy in common  arrangements allows the
Partnership  to fully invest its available  funds at times at which it would not
have  sufficient  funds to purchase an additional  property,  or at times when a
suitable  opportunity to purchase an additional  property is not available.  The
use of joint  venture  and  tenancy in common  arrangements  also  provides  the
Partnership  with  increased  diversification  of its portfolio  among a greater
number of properties. In addition,  tenancy in common arrangements may allow the
Partnership to defer the gain for federal income tax purposes upon the sale of a
Property if the proceeds are reinvested in an additional Property.

Certain Management Services

         CNL Fund Advisors, Inc., an affiliate of the General Partners, provides
certain  services  relating to management of the  Partnership and its Properties
pursuant to a management  agreement with the Partnership.  Under this agreement,
CNL  Fund  Advisors,   Inc.  is  responsible  for  collecting  rental  payments,
inspecting  the  Properties  and the tenants'  books and records,  assisting the
Partnership  in  responding  to  tenant  inquiries  and  notices  and  providing
information  to  the  Partnership  about  the  status  of  the  leases  and  the
Properties.  CNL Fund  Advisors,  Inc.  also  assists  the  General  Partners in
negotiating the leases.  For these  services,  the Partnership has agreed to pay
CNL Fund Advisors,  Inc. an annual fee of one percent of the sum of gross rental
revenues from Properties  wholly owned by the Partnership plus the Partnership's
allocable  share of gross revenues of joint ventures in which the Partnership is
a co-venturer and the Property held as tenants-in-common with an affiliate,  but
not in excess of competitive fees for comparable services.  Under the management
agreement, the management fee is subordinated to receipt by the Limited Partners
of an aggregate,  ten percent,  cumulative  noncompounded annual return on their
adjusted  capital  contributions  (the "10%  Preferred  Return"),  calculated in
accordance   with  the   Partnership's   limited   partnership   agreement  (the
"Partnership  Agreement").  In any year in which the Limited  Partners  have not
received the 10% Preferred Return, no property management fee will be paid.

         The management agreement continues until the Partnership no longer owns
an interest in any Properties unless terminated at an earlier date upon 60 days'
prior notice by either party.



<PAGE>


Competition

         The fast-food and family-style  restaurant business is characterized by
intense  competition.  The restaurants on the Partnership's  Properties  compete
with  independently  owned  restaurants,  restaurants which are part of local or
regional chains, and restaurants in other well-known national chains,  including
those offering different types of food and service.

Employees

         The  Partnership   has  no  employees.   The  officers  of  CNL  Realty
Corporation  and the  officers and  employees of APF, the parent  company of CNL
Fund Advisors, Inc., perform certain services for the Partnership.  In addition,
the General  Partners have  available to them the resources and expertise of the
officers and employees of CNL Financial  Group,  Inc., a diversified real estate
company,  and its  affiliates,  who may also  perform  certain  services for the
Partnership.


Item 2.  Properties

         As of December 31, 2000, the Partnership owned 38 Properties. Of the 38
Properties, 23 are owned by the Partnership in fee simple, six are owned through
joint  venture   arrangements   and  nine  owned   through   tenancy  in  common
arrangements.  See Item 1.  Business  - Joint  Venture  and  Tenancy  in  Common
Arrangements.  The Partnership is not permitted to encumber its Properties under
the terms of its  partnership  agreement.  Reference  is made to the Schedule of
Real Estate and  Accumulated  Depreciation  for a listing of the  Properties and
their  respective  costs,  including  acquisition  fees and certain  acquisition
expenses.

Description of Properties

         Land. The Partnership's  Property sites range from approximately 11,500
to 88,200  square  feet  depending  upon  building  size and  local  demographic
factors.  Sites  purchased  by  the  Partnership  are  in  locations  zoned  for
commercial use which have been reviewed for traffic patterns and volume.

         The following table lists the Properties owned by the Partnership as of
December 31, 2000 by state. More detailed information  regarding the location of
the  Properties  is  contained  in the  Schedule of Real Estate and  Accumulated
Depreciation for the year ended December 31, 2000.

                     State                    Number of Properties

                     California                         1
                     Florida                            7
                     Georgia                            1
                     Illinois                           2
                     Indiana                            1
                     Kansas                             1
                     Massachusetts                      1
                     Michigan                           3
                     North Carolina                     3
                     New Mexico                         1
                     Ohio                               1
                     Oklahoma                           2
                     Pennsylvania                       1
                     Tennessee                          4
                     Texas                              5
                     Virginia                           2
                     Washington                         1
                     Wyoming                            1
                                                   -------------
                     TOTAL PROPERTIES                   38
                                                   =============


<PAGE>


         Buildings.  Each of the Properties owned by the Partnership  includes a
building that is one of a Restaurant  Chain's  approved  designs.  The buildings
generally are  rectangular  and are  constructed  from various  combinations  of
stucco,  steel,  wood, brick and tile.  Building sizes range from  approximately
1,175 to 10,700 square feet.  All buildings on Properties are  freestanding  and
surrounded by paved  parking  areas.  Buildings  are suitable for  conversion to
various uses, although modifications may be required prior to use for other than
restaurant operations. As of December 31, 2000, the Partnership had no plans for
renovation of the Properties. Depreciation expense is computed for buildings and
improvements using the straight-line  method using depreciable lives of 31.5 and
39 years for federal income tax purposes.

         As of December 31, 2000, the aggregate cost of the Properties  owned by
the Partnership  (including its  consolidated  joint venture) and joint ventures
(including  Properties owned through tenancy in common arrangements) for federal
income tax purposes was $19,834,603 and $18,239,974, respectively.

         The following table lists the Properties owned by the Partnership as of
December 31, 2000 by Restaurant Chain.

          Restaurant Chain                       Number of Properties

          5 & Diner                                        1
          Arby's                                           1
          Baker's Square                                   1
          Bennigan's                                       1
          Burger King                                      1
          Captain D's                                      1
          Chevy's Fresh Mex                                1
          Church's                                         2
          Darryl's                                         1
          Denny's                                          2
          Durango's Steakhouse of Atlanta                  1
          Golden Corral                                    5
          Hardee's                                         2
          IHOP                                             8
          Jack in the Box                                  1
          KFC                                              3
          Loco Lupe's Mexican Restaurant                   1
          Shoney's                                         1
          Taco Bell                                        1
          Waffle House                                     3
                                                    -----------------

          TOTAL PROPERTIES                                 38
                                                    =================

         The General Partners consider the Properties to be well-maintained  and
sufficient for the Partnership's operations.

         The General Partners believe that the Properties are adequately covered
by  insurance.  In  addition,  the General  Partners  have  obtained  contingent
liability and property coverage for the Partnership.  This insurance is intended
to reduce the Partnership's  exposure in the unlikely event a tenant's insurance
policy lapses or is insufficient to cover a claim relating to the Property.

         Leases.  The Partnership leases the Properties to operators of selected
national and regional fast-food restaurant chains. The leases are generally on a
long-term  "triple  net"  basis,  meaning  that the  tenant is  responsible  for
repairs,  maintenance,  property taxes,  utilities and insurance.  Generally,  a
lessee is required, under the terms of its lease agreement, to make such capital
expenditures as may be reasonably  necessary to refurbish  buildings,  premises,
signs  and  equipment  so  as  to  comply  with  the  lessee's  obligations,  if
applicable,  under the  franchise  agreement  to reflect the current  commercial
image of its Restaurant  Chain.  These capital  expenditures  are required to be
paid by the lessee during the term of the lease.  The terms of the leases of the
Properties owned by the Partnership are described in Item 1. Business - Leases.

         At December 31, 2000,  1999,  1998, 1997, and 1996, the Properties were
97%,  100%,  95%,  98%,  and 100%  occupied,  respectively.  The  following is a
schedule of the average rent per Property for the years ended December 31:
<TABLE>
<CAPTION>
<S> <C>
                                   2000              1999             1998              1997              1996
                               --------------    -------------    --------------    --------------    --------------

Rental Revenues (1)              $ 3,456,021      $ 3,417,147       $ 3,342,220       $ 3,139,283        $3,568,754
Properties (2)                            37               41                42                39                42
Average Rent per
    Property                       $  93,406        $  83,345         $  79,577         $  80,494         $  84,970
</TABLE>

(1)      Rental income  includes the  Partnership's  share of rental income from
         the  Properties  owned  through  joint  venture  arrangements  and  the
         Properties  owned  through  tenancy  in  common  arrangements.   Rental
         revenues have been adjusted,  as applicable,  for any amounts for which
         the Partnership has established an allowance for doubtful accounts.

(2)      Excludes  Properties  that were vacant at December 31, and that did not
         generate rental revenues during the year ended December 31.

         The following is a schedule of lease expirations for leases in place as
of December 31, 2000 for the next ten years and thereafter.

<TABLE>
<CAPTION>
<S> <C>
                                                                                     Percentage of
             Expiration Year          Number             Annual Rental               Gross Annual
                                   of Leases (1)            Revenues                 Rental Income
             -----------------    ----------------    ---------------------    --------------------------
              2001                             --                   $   --                      --
              2002                             --                       --                      --
              2003                              1                   54,000                   1.41%
              2004                              3                  515,141                  13.47%
              2005                              3                  316,868                   8.29%
              2006                             --                       --                      --
              2007                             --                       --                      --
              2008                              3                  128,440                   3.36%
              2009                              3                  273,725                   7.16%
              2010                              7                  485,100                  12.69%
              Thereafter                       17                2,049,890                  53.62%
                                        ----------            -------------           -------------
              Total                            37              $ 3,823,164                 100.00%
                                        ==========            =============           =============
</TABLE>

(1)      Excludes one Property which was vacant at December 31, 2000.

         Leases  with Major  Tenants.  The terms of each of the leases  with the
Partnership's  major  tenants as of December  31,  2000 (see Item 1.  Business -
Major Tenants) are substantially the same as those described in Item 1. Business
- Leases.

         Golden Corral  Corporation leases five Golden Corral  restaurants.  The
initial term of each lease is 15 years (expiring  between 2004 and 2011) and the
average  minimum  base  annual  rent is  approximately  $152,900  (ranging  from
approximately $88,000 to $185,700).

         IHOP Corp.  leases  eight IHOP  restaurants.  The initial  term of each
lease is 20 years (expiring  between 2017 and 2019) and the average minimum base
annual rent is approximately  $137,600 (ranging from  approximately  $114,500 to
$163,200).


Item 3.   Legal Proceedings

         Neither the  Partnership,  not its General Partners or any affiliate of
the General Partners,  nor any of their respective  Properties,  is party to, or
subject to, any material pending legal proceedings.


Item 4.  Submission of Matters to a Vote of Security Holders

         Not applicable.


                                     PART II


Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

(a) As of March 15, 2001, there were 2,976 holders of record of the Units. There
is no public  trading  market for the Units,  and it is not  anticipated  that a
public  market for the Units will  develop.  During 2000,  Limited  Partners who
wished to sell their Units may have  offered the Units for sale  pursuant to the
Partnership's  distribution reinvestment plan (the "Plan"), and Limited Partners
who wished to have their  distributions used to acquire additional Units (to the
extent Units were  available  for  purchase),  may have done so pursuant to such
Plan.  The General  Partners had the right to prohibit  transfers of Units.  The
price paid for any Unit transferred  pursuant to the Plan was $475 per Unit. The
price paid for any Unit transferred  other than pursuant to the Plan was subject
to negotiation by the purchaser and the selling Limited Partner. The Partnership
will not redeem or repurchase Units.

         The following table reflects,  for each calendar quarter, the high, low
and average  sales prices for transfers of Units during 2000 and 1999 other than
pursuant to the Plan, net of commissions.
<TABLE>
<CAPTION>
<S> <C>
                                              2000 (1)                               1999 (1)
                                 -----------------------------------    -----------------------------------
                                   High         Low        Average        High         Low       Average
                                 ---------    --------    ----------    ---------    --------   -----------
         First Quarter              $ 380        $380         $ 380        $ 475       $ 475         $ 475
         Second Quarter               382         371           378          475         418           466
         Third Quarter                387         334           363          475         260           429
         Fourth Quarter               395         300           346          475         386           434
</TABLE>

(1)      A  total  of 216 1/3 and 592 3/4  Units  were  transferred  other  than
         pursuant  to the Plan for the years ended  December  31, 2000 and 1999,
         respectively.

         The capital  contribution  per Unit was $500.  All cash  available  for
distribution  will be distributed to the partners  pursuant to the provisions of
the Partnership Agreement.

         For the  years  ended  December  31,  2000 and  1999,  the  Partnership
declared cash distributions of $3,150,000 and $3,150,000,  respectively,  to the
Limited  Partners.  Distributions of $787,500 were declared at the close of each
of the  Partnership's  calendar  quarter  during  2000 and  1999 to the  Limited
Partners.  No amounts  distributed  to partners for the years ended December 31,
2000 and 1999,  are required to be or have been treated by the  Partnership as a
return of capital for purposes of calculating  the Limited  Partners'  return on
their adjusted capital  contributions.  No  distributions  have been made to the
General  Partners to date. These amounts include monthly  distributions  made in
arrears  for the Limited  Partners  electing  to receive  distributions  on this
basis.

         The  Partnership  intends to  continue  to make  distributions  of cash
available  for  distribution  to the  Limited  Partners  on a  quarterly  basis,
although some Limited  Partners,  in  accordance  with their  election,  receive
monthly distributions, for an annual fee.

(b)      Not applicable.

Item 6.  Selected Financial Data
<TABLE>
<CAPTION>
<S> <C>
                                         2000               1999              1998               1997               1996
                                     --------------    ---------------    --------------    ---------------    ---------------
Year ended December 31:
     Revenues (1)                       $3,211,507         $3,461,440        $3,370,532         $3,456,406         $3,565,493
     Net income (2)(4)                   3,016,796          3,510,474         3,020,881          2,899,882          2,803,601
     Cash distributions
       declared (3)                      3,150,000          3,150,000         3,220,000          3,150,000          3,220,000
     Net income per Unit (2)                 43.10              49.67             42.75              41.06              39.65
     Cash distributions
       declared per Unit (3)                 45.00              45.00             46.00              45.00              46.00

At December 31:
     Total assets                      $29,820,589        $30,120,859       $29,655,896        $29,993,069        $30,129,286
     Partners' capital                  28,822,400         28,955,604        28,595,130         28,794,249         29,044,367


</TABLE>

(1)      Revenues  include equity in earnings of  unconsolidated  joint ventures
         and minority interest in income of the consolidated joint venture.

(2)      Net  income  for the years  ended  December  31,  2000,  1997 and 1996,
         includes  provision  for  loss on  assets  of  $368,430,  $263,186  and
         $77,023,  respectively.  In  addition,  net income for the years  ended
         December 31, 1997 and 1996, includes $79,777 and $1,706,  respectively,
         from a loss on sale of assets.  Net income for the years ended December
         31, 2000,  1999,  1998,  and 1997,  also includes  $639,806,  $848,303,
         $345,122,  and $626,804,  respectively,  from gains on sale of land and
         buildings.

(3)      Distributions for the years ended December 31, 1998 and 1996, include a
         special  distribution  to  the  Limited  Partners  of  $70,000,   which
         represented cumulative excess operating reserves.

(4)      Net income for the year ended December 31, 2000, includes $175,000 from
         lease termination income.

         The above selected  financial  data should be read in conjunction  with
the financial statements and related notes contained in Item 8 hereof.


Item 7.  Management's  Discussion  and Analysis of Financial  Condition  and
         Results of Operations

         The  Partnership was organized on August 17, 1988, to acquire for cash,
either directly or through joint venture  arrangements,  both newly  constructed
and  existing  restaurant  Properties,  as well as land  upon  which  restaurant
Properties  were to be constructed,  which are leased  primarily to operators of
selected national and regional fast-food and family-style Restaurant Chains. The
leases are generally  triple-net  leases,  with the lessees  responsible for all
repairs and maintenance, property taxes, insurance and utilities. As of December
31, 2000, the  Partnership  owned 38 Properties,  either  directly or indirectly
through joint venture or tenancy in common arrangements.

Capital Resources

         During  the  years  ended  December  31,  2000,  1999,  and  1998,  the
Partnership  generated cash from  operations  (which includes cash received from
tenants, distributions from joint ventures and interest received, less cash paid
for expenses) of  $3,136,299,  $3,204,934,  and  $3,243,660,  respectively.  The
decrease in cash from  operations  during 2000 and 1999, each as compared to the
previous  year,  was  primarily  a result of changes in income and  expenses  as
described in "Results of Operations" below.

         In 1996, the  Partnership  entered into an agreement with the tenant of
the Properties in Chester,  Pennsylvania,  and Orlando,  Florida, for payment of
certain  rental  payment  deferrals  the  Partnership  had granted to the tenant
through March 31, 1996.  Under the agreement,  the  Partnership  agreed to abate
approximately  $42,700 of the rental payment deferral  amounts.  The tenant made
payments of approximately $18,600 in each of April 1996, March 1997, April 1998,
and April 1999 in accordance with the terms of the agreement,  and the remaining
balance of approximately $55,800 was collected during 2000. In addition,  during
2000,  the  Partnership  terminated  the lease with the  tenant of the  Property
located in Chester,  Pennsylvania  due to financial  difficulties the tenant was
experiencing.  In connection with the terminated lease, the Partnership received
$175,000 in  consideration  for the  Partnership  releasing  the tenant from its
obligations under the lease terms.

         In June 1997, the  Partnership  terminated the lease with the tenant of
the Property in Greensburg,  Indiana. In connection  therewith,  the Partnership
accepted a  promissory  note from the  former  tenant for  $13,077  for  amounts
relating to past due real estate taxes the  Partnership had incurred as a result
of the former tenant's  financial  difficulties.  The promissory  note, which is
uncollateralized,  bears  interest at a rate of ten  percent  per annum,  and is
being  collected in 36 monthly  installments.  Receivables at December 31, 2000,
included $1,657 of such amounts.  In July 1997, the  Partnership  entered into a
new lease for the Property in Greensburg,  Indiana, with a new tenant to operate
the Property as an Arby's restaurant.  In connection therewith,  the Partnership
paid $125,000 in renovation  costs.  The  renovations  were completed in October
1997, at which time payments of rent commenced.

         In January 1998, the Partnership reinvested the net sales proceeds from
the 1997 sale of the Property in Plattsmouth,  Nebraska,  in an IHOP Property in
Memphis,    Tennessee,    with   affiliates   of   the   General   Partners   as
tenants-in-common.  In connection therewith,  the Partnership and the affiliates
entered  into an  agreement  whereby  each party will share in the  profits  and
losses of the Property in proportion to its applicable  percentage interest.  As
of December 31, 2000, the Partnership owned a 46.2% interest in this Property.

         In January 1998, the Partnership sold its Property in Deland,  Florida,
to the tenant,  for  $1,250,000  and received net sales  proceeds of $1,234,122,
resulting in a gain of $345,122 for financial reporting purposes.  This Property
was  originally  acquired by the  Partnership  in October 1989 and had a cost of
approximately   $1,000,000,   excluding   acquisition  fees  and   miscellaneous
acquisition  expenses;   therefore,   the  Partnership  sold  the  Property  for
approximately  $234,100 in excess of its original  purchase price. In June 1998,
the Partnership  reinvested the majority of the net sales proceeds in a Property
in  Fort  Myers,   Florida,  with  an  affiliate  of  the  General  Partners  as
tenants-in-common.  As of December 31, 2000, the Partnership owned an 85 percent
interest in this Property.  The transaction relating to the sale of the Property
in Deland, Florida, and the reinvestment of the net sales proceeds, qualified as
a like-kind exchange transaction for federal income tax purposes.

         In February  1998,  the  Partnership  sold its  Property in  Melbourne,
Florida,  for $590,000 and received net sales  proceeds of $552,910.  Due to the
fact that  during  1997,  the  Partnership  recorded  an  allowance  for loss of
$158,239  for  this  Property,  no gain or loss  was  recognized  for  financial
reporting  purposes in February  1998,  relating to the sale. In April 1998, the
Partnership  contributed  approximately  $494,900,  of the net sales proceeds to
Melbourne  Joint Venture to construct and hold one  restaurant  Property.  As of
December 31, 2000, the  Partnership  had  contributed an additional  $44,120 for
such  construction  costs. As of December 31, 2000, the  Partnership  owned a 50
percent interest in the profits and losses of the joint venture.

         In addition,  in February  1998, the  Partnership  sold its Property in
Liverpool,  New York,  for $157,500 and received net sales proceeds of $145,221.
Due to the fact that in prior years the  Partnership  recorded an allowance  for
loss of $181,970 for this Property, no gain or loss was recognized for financial
reporting purposes in February 1998, relating to the sale. In November 1999, the
Partnership  used the net sales  proceeds from the sale to invest  approximately
$145,000  in an IHOP  Property in Dublin,  California,  with CNL Income Fund IX,
Ltd.,  an  affiliate  of the General  Partners,  as  tenants-in-common  for a 75
percent  interest  in  this  Property.   The  Partnership   distributed  amounts
sufficient to enable the Limited Partners to pay federal and state income taxes,
at a level reasonably assumed by the General Partners, resulting from the sale.

         In June 1998, the Partnership sold its Property in Bellevue,  Nebraska,
to a third party and received gross sales proceeds of $900,000.  Due to the fact
that during 1998 the  Partnership  reversed  $155,528 in accrued  rental income,
representing  non-cash  amounts that the  Partnership  had  recognized as income
since the  inception  of the lease  relating  to the  straight-lining  of future
scheduled  rent  increases in  accordance  with  generally  accepted  accounting
principles,  no gain or loss was recorded for  financial  reporting  purposes in
June 1998 relating to this sale.  This Property was  originally  acquired by the
Partnership in December 1989 and had a cost of approximately $899,500, excluding
acquisition  fees  and  miscellaneous   acquisition  expenses;   therefore,  the
Partnership sold the Property for  approximately  $500 in excess of its original
purchase price. In September  1998, the  Partnership  contributed  approximately
$898,100  of the net  sales  proceeds  to  Warren  Joint  Venture  to  acquire a
restaurant  Property.  The  Partnership has a 64.29% interest in the profits and
losses of Warren Joint Venture and the remaining  interest in this joint venture
is held by an affiliate of the General Partners.

         In June 1999, the Partnership sold four Burger King Properties,  one in
each of Sevierville, Walker Springs, Broadway and Greeneville, Tennessee, to the
tenant in accordance with the purchase  options under the lease agreements for a
total of approximately $4,354,000 and received net sales proceeds of $4,316,145,
resulting in a total gain of $848,303 for financial  reporting  purposes.  These
Properties were  originally  acquired by the Partnership in January 1990 and had
costs  totaling  approximately   $3,535,700,   excluding  acquisition  fees  and
miscellaneous  acquisition  expenses;  therefore,  the  Partnership  sold  these
Properties  for a total of  approximately  $780,400 in excess of their  original
purchase prices.

         In October  1999,  the  Partnership  used the majority of the net sales
proceeds  from the sales of the  Properties  in  Walker  Springs  and  Broadway,
Tennessee, to invest approximately $2,108,100 in two Properties,  one in each of
Baytown,  Texas and Round Rock,  Texas,  with CNL Income Fund III,  Ltd. and CNL
Income Fund XI,  Ltd.,  respectively,  affiliates  of the General  Partners,  as
tenants-in-common for an 80 percent and a 77 percent interest,  respectively, in
the Properties. In addition, in November 1999, the Partnership used the majority
of the net  sales  proceeds  from  the  sale  of the  Property  in  Greeneville,
Tennessee,  to invest an additional  amount of  approximately  $1,017,600 in the
IHOP Property in Dublin,  California,  as described  above. In January 2000, the
Partnership  invested a majority of the net sales  proceeds from the sale of the
Property in Sevierville,  Tennessee,  in a Property in Niles, Illinois, with CNL
Income Fund XIV, Ltd., an affiliate of the General Partners as tenants-in-common
for a 74 percent interest in the Property. The Partnership acquired the Property
from an affiliate of the General  Partners.  The  affiliate  had  purchased  and
temporarily held title to the Property in order to facilitate the acquisition of
the  Property by the  Partnership.  The purchase  price paid by the  Partnership
represented  the costs  incurred  by the  affiliate  to  acquire  the  Property,
including  closing costs. A portion of the transaction  relating to the sales of
the four Properties and the reinvestment of the net sales proceeds  qualified as
a like-kind exchange  transaction for federal income tax purposes.  However, the
Partnership will distribute  amounts  sufficient to enabled the Limited Partners
to pay federal and state income taxes, if any (at a level reasonably  assumed by
the General Partners) resulting from the sales.

         In September 2000, the Partnership sold four of its Popeyes Properties,
three in Jacksonville, Florida and one in Tallahassee, Florida, to a third party
for a total of approximately $2,081,800 and received net sales proceeds totaling
approximately  $2,071,800 resulting in gains totaling approximately $639,800 for
financial reporting  purposes.  These Properties were originally acquired by the
Partnership in 1990 and had costs totaling  approximately  $1,708,900  excluding
acquisition  fees  and  miscellaneous   acquisition  expenses;   therefore,  the
Partnership sold these Properties for approximately  $362,900 in excess of their
original purchase prices. In January 2001, the Partnership invested a portion of
these net sales  proceeds  in two  Properties  located  in Burley,  Indiana  and
Cleburne,  Texas at an  approximate  cost of  $2,098,400.  The General  Partners
believe  a  portion  of the  transaction  relating  to the  sale of  these  four
Properties  and the  reinvestment  of the net sales  proceeds  will qualify as a
like-kind  exchange  transaction for federal income tax purposes.  However,  the
Partnership will distribute amounts sufficient to enable the Limited Partners to
pay federal and state income taxes, if any (at a level reasonably assumed by the
General Partners) resulting from the sales.

         None of the Properties owned by the Partnership,  or the joint ventures
or tenancy in common arrangements in which the Partnership owns an interest,  is
or may be  encumbered.  Under its  partnership  agreement,  the  Partnership  is
prohibited from borrowing for any purpose;  provided,  however, that the General
Partners or their affiliates are entitled to reimbursement,  at cost, for actual
expenses  incurred by the General  Partners or their affiliates on behalf of the
Partnership.  Affiliates of the General Partners from time to time incur certain
operating  expenses  on behalf  of the  Partnership  for  which the  Partnership
reimburses the affiliates without interest.

         Currently,  rental  income from the  Partnership's  Properties  and net
sales proceeds from the sale of Properties,  pending  reinvestment in additional
Properties,  are invested in money market accounts or other  short-term,  highly
liquid  investments such as demand deposit accounts at commercial  banks,  money
market  accounts and  certificates  of deposit with less than a 30-day  maturity
date, pending the Partnership's use of such funds to pay Partnership expenses or
to make distributions to the partners. At December 31, 2000, the Partnership had
$972,373  invested in such  short-term  investments  (including a certificate of
deposit in the amount of  $100,000)  as compared to  $2,125,493  at December 31,
1999.  The  decrease in cash and cash  equivalents  during 2000 was  primarily a
result of the Partnership  investing in a Property  located in Niles,  Illinois,
with an affiliate of the General Partners,  as  tenants-in-common,  as described
above.  For the year ending December 31, 2000, the average  interest rate earned
on the rental income  deposited in demand deposit  accounts at commercial  banks
was  approximately  4.13%  annually.  The funds  remaining at December 31, 2000,
after payment of distributions and other  liabilities,  will be used to meet the
Partnership's working capital and other needs.

Short-Term Liquidity

         The Partnership's  short-term liquidity  requirements consist primarily
of the operating expenses of the Partnership.

         The Partnership's  investment strategy of acquiring Properties for cash
and  leasing  them under  triple-net  leases to  operators  who  generally  meet
specified financial  standards  minimizes the Partnership's  operating expenses.
The General Partners believe that the leases will continue to generate cash flow
in excess of operating expenses.

         Due to low  operating  expenses  and  ongoing  cash flow,  the  General
Partners do not believe that  working  capital  reserves  are  necessary at this
time. In addition,  because the leases of the Partnership's  Properties are on a
triple-net basis, it is not anticipated that a permanent reserve for maintenance
and repairs will be established at this time. To the extent,  however,  that the
Partnership has insufficient funds for such purposes,  the General Partners will
contribute to the  Partnership  an aggregate  amount of up to one percent of the
offering proceeds for maintenance and repairs.

         The General  Partners have the right,  but not the obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the operations of the Partnership.

         The Partnership  generally  distributes cash from operations  remaining
after the payment of the operating  expenses of the  Partnership,  to the extent
that  the  General  Partners   determine  that  such  funds  are  available  for
distribution.  Based on cash from  operations,  and cumulative  excess operating
reserves  for the  year  ended  December  31,  1998,  the  Partnership  declared
distributions to the Limited Partners of $3,150,000,  $3,150,000, and $3,220,000
for the years ended  December  31,  2000,  1999,  and 1998,  respectively.  This
represents  distributions  of $45,  $45,  and $46 per Unit for the  years  ended
December 31, 2000, 1999, and 1998,  respectively.  No amounts distributed to the
Limited  Partners for the years ended  December 31, 2000,  1999,  and 1998,  are
required to be or have been  treated by the  Partnership  as a return of capital
for  purposes of  calculating  the Limited  Partners'  return on their  adjusted
capital contributions. The Partnership intends to continue to make distributions
of cash available for distribution to the Limited Partners on a quarterly basis.

         During 2000, the General  Partners waived their right to receive future
distributions  from the Partnership,  including both  distributions of operating
cash flow and  distributions  of  liquidation  proceeds,  to the extent that the
cumulative amount of such distributions  would exceed the balance in the General
Partners'  capital  account as of December  31, 1999.  Accordingly,  the General
Partners were not allocated any net income and did not receive any distributions
during the year ended December 31, 2000.

         As of  December  31,  2000 and 1999,  the  Partnership  owed $5,396 and
$65,220,  respectively,  to affiliates for operating expenses  andaccounting and
administrative  services.  As of March 15, 2001, the  Partnership had reimbursed
all such  amounts  to the  affiliates.  Other  liabilities  of the  Partnership,
including distributions payable decreased to $842,460 at December 31, 2000, from
$946,165 at December 31, 1999. The decrease in other  liabilities  was primarily
attributable  to the fact that during 2000,  the  Partnership  paid amounts that
were accrued at December 31, 1999  relating to the proposed  merger with APF, as
described  in  "Termination  of Merger." The General  Partners  believe that the
Partnership  has  sufficient  cash on hand to meet its current  working  capital
needs.

Long-Term Liquidity

         The  Partnership  has no long-term  debt or other  long-term  liquidity
requirements.

Results of Operations

         During 1998, the Partnership and its consolidated  joint venture,  Caro
Joint  Venture,  owned and leased 36 wholly  owned  Properties  (including  four
Properties which were sold in 1998), and during 1999, the Partnership  owned and
leased 32 wholly owned  Properties  (including four  Properties  which were sold
during 1999), and during 2000, the Partnership  owned and leased 28 wholly owned
Properties (including four Properties which were sold during 2000). In addition,
during 1998 and 1999, the  Partnership  was a co-venturer in five separate joint
ventures  that owned and leased a total of five  Properties  and during 2000 the
Partnership  was a co-venturer  in one  additional  joint venture that owned and
leased  one  Property.  During  1998,  the  Partnership  owned and  leased  five
Properties with affiliates as tenants-in-common and during 1999, the Partnership
owned and leased eight  Properties  with  affiliates  as  tenants-in-common  and
during 2000 the Partnership  owned and leased nine Properties with affiliates as
tenants-in-common.  As of December  31,  2000,  the  Partnership  owned,  either
directly,  or  through  joint  venture  arrangements,  38  Properties  which are
generally subject to long-term,  triple-net leases. The leases of the Properties
provide for minimum base annual rental amounts (payable in monthly installments)
ranging from approximately  $37,900 to $222,800.  Generally,  the leases provide
for percentage rent based on sales in excess of a specified amount. In addition,
some of the leases  provide that,  commencing in the fourth to sixth lease year,
the  percentage  rent will be an amount  equal to the greater of the  percentage
rent calculated under the lease formula or a specified  percentage (ranging from
one to  five  percent)  of the  purchase  price  or  gross  sales.  For  further
description of the Partnership's  leases and Properties,  see Item 1. Business -
Leases and Item 2. Properties, respectively.

         During  the  years  ended  December  31,  2000,  1999,  and  1998,  the
Partnership and its consolidated  joint venture earned  $2,355,377,  $2,675,958,
and  $2,823,377,  respectively,  in rental income from operating  leases (net of
adjustments to accrued  rental  income) and earned income from direct  financing
leases.  Rental  and  earned  income  decreased  during  2000 and 1999,  each as
compared  to  the  previous  year,  by  approximately   $249,700  and  $324,600,
respectively, primarily as a result of the sales of Properties during 2000, 1999
and 1998, described above in "Capital  Resources".  Rental and earned income are
expected to remain at reduced amounts while equity in earnings of joint ventures
is expected to increase due to the fact that the Partnership  reinvested the net
sales  proceeds from the 2000 and 1999 sales at Properties in joint  ventures or
in Properties with affiliates of the General Partners, as tenants-in-common.

         Rental and earned  income  decreased  during 2000, as compared to 1999,
due to the fact that the Partnership recorded an allowance for doubtful accounts
during 2000 by approximately  $34,000 for rental amounts relating to the Denny's
Property  located  in Broken  Arrow,  Oklahoma,  in  accordance  with  generally
accepted  accounting  principles.  The General  Partners will continue to pursue
collection of these past due amounts and will  recognize such amounts as income,
if collected. No such allowance was recorded in 1999 or 1998.

         The decrease in rental and earned income during 2000 and 1999,  each as
compared  to the  previous  year,  was  offset by the fact that the  Partnership
collected and recorded as income  approximately  $53,700 and $18,600 during 2000
and 1999, in rental payment  deferrals for the two Properties leased by the same
tenant  in  Chester,   Pennsylvania,   and  Orlando,  Florida.  Previously,  the
Partnership  had  established  an  allowance  for  doubtful  accounts  for these
amounts.  These amounts were collected in accordance with the agreement  entered
into in March 1996,  with the tenant to pay the remaining  balance of the rental
payment deferral amounts as discussed above in "Capital Resources." During 2000,
the  tenant   terminated   its  lease  relating  to  the  Property  in  Chester,
Pennsylvania.  In connection  with the  termination,  the  Partnership  received
termination  income in  consideration  for the Partnership  releasing the tenant
from its obligations  under the lease.  The  Partnership  will not recognize any
rental income  relating to this Property  until the Property is re-leased or the
Property is sold and the proceeds are reinvested in an additional Property.  The
General  Partners are currently  seeking a  replacement  tenant or purchaser for
this Property. The lost revenues from this vacant Property could have an adverse
effect on the results of operations of the  Partnership,  if the  Partnership is
not able to re-lease the Property in a timely manner.

         The decrease in rental and earned  income  during 1999,  as compared to
1998,  was  partially  offset  by the fact  that  during  1999  the  Partnership
collected and recognized as income a portion of the past due rental amounts owed
by the former tenant of the Property  located in Melbourne,  Florida,  for which
the Partnership had previously established an allowance for doubtful accounts of
$107,100 in 1997.  The former  tenant  vacated this Property in October 1997 and
the Partnership had been pursuing collection of the past due rental amounts. The
Partnership sold this Property in February 1998.

         The decrease in rental and earned  income  during 1999,  as compared to
1998,  was  partially  offset by the fact that during  1999,  the  Partnership's
consolidated  joint venture  collected and  recognized as income past due rental
amounts of  approximately  $33,000 for which the joint  venture  had  previously
established  an  allowance  for  doubtful   accounts.   No  such  allowance  was
established during 2000.

         The decrease in rental and earned  income for 1999 as compared to 1998,
was partially offset by the fact that during June 1998, the Partnership reversed
approximately $155,500 in accrued rental income (non-cash accounting adjustments
relating to the  straight-lining  of future  scheduled  rent  increases over the
lease term in accordance with generally accepted accounting principles) relating
to the Property in Bellevue,  Nebraska to adjust the carrying value of the asset
to the net proceeds received from the sale of this Property in June 1998.

         In addition, for the years ended December 31, 2000, 1999, and 1998, the
Partnership earned $672,749, $524,643, and $323,105, respectively,  attributable
to  net  income  earned  by  joint  ventures  in  which  the  Partnership  is  a
co-venturer. The increase in net income earned by joint ventures during 2000 and
1999,  each as compared to the previous year, was primarily due to the fact that
in 1999 and 2000, the Partnership  reinvested the net sales proceeds it received
from the 1999 sales of four  Burger  King  Properties  in four  Properties  with
affiliates  of the general  partners as  tenants-in-common.  The increase in net
income earned by joint  ventures  during 2000 was  partially  offset by the fact
that during 2000, the lease  relating to the Property  owned by Melbourne  Joint
Venture,  in which the Partnership  owns a 50 percent  interest,  was amended to
provide  for rent  reductions  starting  in  February  2000.  In June 2000,  the
operator of this Property vacated the Property and discontinued operations. As a
result,  during 2000,  the joint venture  established  an allowance for doubtful
accounts for past due rental amounts.  The joint venture will continue to pursue
collection of past due rental  amounts and will recognize such amounts as income
if collected. The joint venture will not recognize any rental income relating to
this Property until such time as the joint venture executes a new lease or until
the  Property  is sold and the  proceeds  from  such sale are  reinvested  in an
additional Property. In addition, the joint venture established an allowance for
loss on assets  for this  Property  of  approximately  $219,100.  The  allowance
represented the difference between the Property's net carrying value at December
31, 2000 and the current  estimated net realizable  value for the Property.  Net
income earned during 2000 and 1999 was also higher due to the fact that in 1998,
the Partnership  reinvested the net sales proceeds it received from the 1997 and
1998 sales of three  Properties  in  additional  Properties  in  Overland  Park,
Kansas;  Memphis,  Tennessee  and Fort Myers,  Florida  with  affiliates  of the
General Partners as tenants-in-common.

         During the year  ended  December  31,  2000,  two of the  Partnership's
lessees, Golden Corral Corporation,  and IHOP Properties, Inc., each contributed
more than ten  percent of the  Partnership's  total  rental  and  earned  income
(including rental income from the Partnership's  consolidated  joint venture and
the  Partnership's  share of the rental and earned  income  from the  Properties
owned by five  unconsolidated  joint  ventures  in which  the  Partnership  is a
co-venturer and nine Properties owned with affiliates of the General Partners as
tenants-in-common).  As of December 31, 2000, Golden Corral  Corporation was the
lessee under leases relating to five restaurants,  IHOP Properties, Inc. was the
lessee under leases relating to eight restaurants. It is anticipated that, based
on the minimum annual rental payments required by the leases,  these two lessees
each will  continue to  contribute  more than ten  percent of the  Partnership's
total rental income  during 2001. In addition,  two  Restaurant  Chains,  Golden
Corral and IHOP,  each accounted for more than ten percent of the  Partnership's
total  rental  and  earned  income  during  the year  ended  December  31,  2000
(including rental income from the Partnership's  consolidated  joint venture and
the  Partnership's  share of the rental and earned  income  from the  Properties
owned by five  unconsolidated  joint  ventures  in which  the  Partnership  is a
co-venturer and nine Properties owned with affiliates of the General Partners as
tenants-in-common). In 2001, it is anticipated that these Restaurant Chains each
will  continue to account for more than ten percent of the  Partnership's  total
rental and earned income to which the Partnership is entitled under the terms of
the leases.  Any failure of these lessees or Restaurant  Chains could materially
affect the  Partnership's  income if the Partnership is not able to re-lease the
Properties in a timely manner.

         For the years ended 2000,  1999, and 1998, the Partnership  also earned
$58,100,  $147,908,  and $110,502,  respectively,  in interest and other income.
Interest and other income  during the year ended  December 31, 1999, as compared
to the years ended December 31, 2000 and 1998,  was higher  primarily due to the
high  number of dollars  uninvested  during  1999,  as compared to 2000 and 1998
amount of interest earned on the net sales proceeds  received and held in escrow
relating  to the sale of the four Burger King  Properties,  until such  proceeds
were  reinvested  in  additional  Properties,  as  described  above in  "Capital
Resources."

         Operating expenses,  including  depreciation and amortization  expense,
were $641,087,  $799,269,  and $694,773,  for the years ended December 31, 2000,
1999, and 1998, respectively. The decrease in operating expenses during 2000, as
compared to 1999,  and the  increase  during  1999,  as  compared  to 1998,  was
primarily due to the amount of the transaction  costs the  Partnership  incurred
related to the General Partners retaining financial and legal advisors to assist
them in evaluating and negotiating the proposed and terminated  Merger with APF,
as described in  "Termination  of Merger." The decrease during 2000, as compared
to 1999, was partially  attributed to, and the increase during 1999, as compared
to 1998,  was  partially  offset by, a decrease in  depreciation  expense due to
sales of several Properties in 2000, 1999 and 1998.

         As a result of the sale of four Popeye's Properties, as described above
in "Capital Resources," the Partnership  recognized gains of $639,806 during the
year ended December 31, 2000, for financial reporting  purposes.  As a result of
the sale of the four  Burger King  Properties,  as  described  above in "Capital
Resources",  the Partnership  recognized gains of $848,303 during the year ended
December 31, 1999, for financial reporting purposes. In addition, as a result of
the sale of the  Property in Deland,  Florida,  as  described  above in "Capital
Resources," the Partnership  recognized a gain of $345,122 during the year ended
December 31, 1998, for financial reporting purposes.

         During the year ended  December 31, 2000,  the  Partnership  recorded a
provision for loss on assets in the amount of $368,430,  for financial reporting
purposes for the Property in Chester, Pennsylvania. This lease for this Property
was terminated in 2000, as described above in "Capital Resources." The allowance
at December 31, 2000, represented the difference between the Property's carrying
value at December 31, 2000,  and the  estimated  net  realizable  value for this
Property.  No such  provision was recorded  during the years ended  December 31,
1999 and  1998.  In  connection  with the  lease  termination,  the  Partnership
received  $175,000  as  lease   termination   income  as  consideration  of  the
Partnership  releasing  the  tenant  from  its  obligations  and the  lease,  as
described in "Capital Resources."

         The  Partnership's  leases  as of  December  31,  2000,  are  generally
triple-net  leases and  contain  provisions  that the General  Partners  believe
mitigate  the adverse  effect of  inflation.  Such  provisions  include  clauses
requiring the payment of percentage rent based on certain restaurant sales above
a specified  level and/or  automatic  increases in base rent at specified  times
during the term of the lease.  Management  expects that  increases in restaurant
sales  volumes  due to  inflation  and real  sales  growth  should  result in an
increase in rental income over time.  Continued inflation also may cause capital
appreciation of the  Partnership's  Properties.  Inflation and changing  prices,
however,  also may have an adverse impact on the sales of the restaurants and on
potential capital appreciation of the Properties.

         In December 1999, the Securities and Exchange  Commission  released SAB
101, which provides the staff's view in applying generally  accepted  accounting
principles  to  selected  revenue  recognition  issues.  SAB  101  requires  the
Partnership  to defer  recognition  of certain  percentage  rental  income until
certain defined  thresholds are met. The  Partnership  adopted SAB 101 beginning
January 1, 2000. Implementation of SAB 101 did not have a material impact on the
Partnership results of operations.

         In June 1998, the Financial Accounting Standards Board issued Statement
of  Financial   Accounting   Standards  No.  133,   "Accounting  for  Derivative
Instruments and Hedging  Activities." The Statement  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments,   embedded  in  other  contracts   (collectively   referred  to  as
derivatives),  and for hedging activities. The Statement requires that an entity
recognize all  derivatives  as either assets or liabilities in the balance sheet
and  measure  those  instruments  at fair  value.  In June 1999,  the  Financial
Accounting  Standards Board issued Statement of Financial  Accounting  Standards
No.  137,  "Accounting  for  Derivative  Instruments  and Hedging  Activities  -
Deferral of the Effective  Date of FASB  Statement No. 133, an Amendment of FASB
Statement No. 133." FAS 137 deferred the effective date of FAS 133 for one year.
FAS 133,  as amended,  is now  effective  for all fiscal  quarters of all fiscal
years  beginning  after  June  15,  2000.  The  Partnership  has  reviewed  both
statements and has determined  that both FAS 133 and FAS 137 do not apply to the
Partnership as of December 31, 2000.



<PAGE>


Termination of  Merger

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
of Merger with APF,  pursuant to which the Partnership  would be merged with and
into a subsidiary of APF.  Under the  Agreement  and Plan of Merger,  APF was to
issue shares of its common stock as  consideration  for the Merger.  On March 1,
2000, the General  Partners and APF announced  that they had mutually  agreed to
terminate  the  Agreement  and Plan of Merger.  The  agreement to terminate  the
Agreement and Plan of Merger was based, in large part, on the General  Partners'
concern that,  in light of market  conditions  relating to publicly  traded real
estate  investment  trusts,  the value of the transaction  had diminished.  As a
result of such  diminishment,  the General  Partners'  ability to  unequivocally
recommend voting for the transaction, in the exercise of their fiduciary duties,
had become questionable.


Item 7A. Quantitative and Qualitative Disclosures About Market Risk

         Not applicable.


Item 8.  Financial Statements and Supplementary Data




<PAGE>



                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                                    CONTENTS







                                                                   Page

Report of Independent Certified Public Accountants                  18

Financial Statements:

     Balance Sheets                                                 19

     Statements of Income                                           20

     Statements of Partners' Capital                                21

     Statements of Cash Flows                                    22-23

     Notes to Financial Statements                               24-40







<PAGE>






               Report of Independent Certified Public Accountants





To the Partners
CNL Income Fund VI, Ltd.


In our opinion,  the financial  statements  listed in the index  appearing under
item 14(a)(1) present fairly, in all material  respects,  the financial position
of CNL Income Fund VI, Ltd. (a Florida limited partnership) at December 31, 2000
and 1999,  and the results of its  operations and its cash flows for each of the
three years in the period ended December 31, 2000 in conformity  with accounting
principles  generally accepted in the United States of America. In addition,  in
our opinion,  the financial  statement  schedules  listed in the index appearing
under item 14(a)(2) present fairly,  in all material  respects,  the information
set  forth  therein  when  read  in  conjunction  with  the  related   financial
statements. These financial statements and financial statement schedules are the
responsibility of the Partnership's management; our responsibility is to express
an opinion on these financial statements and financial statement schedules based
on our audits.  We conducted our audits of these  statements in accordance  with
auditing  standards  generally  accepted in the United States of America,  which
require that we plan and perform the audit to obtain reasonable  assurance about
whether the financial  statements  are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.




/s/ PricewaterhouseCoopers LLP


Orlando, Florida
February 2, 2001


<PAGE>

                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                                 BALANCE SHEETS
<TABLE>
<CAPTION>
<S> <C>

                                                                                              December 31,
                                                                                   2000                        1999
                                                                             ------------------         --------------------

                            ASSETS


Land and buildings on operating leases, less accumulated
      depreciation and allowance for loss on land and building                    $13,428, 503                 $ 15,069,805
Net investment in direct financing leases                                            3,324,866                    3,864,455
Investment in joint ventures                                                         9,280,761                    8,377,455
Cash and cash equivalents                                                              868,873                    2,125,493
Certificate of deposit                                                                 103,500                           --
Restricted cash                                                                      2,062,036                           --
Receivables, less allowance for doubtful accounts of $193,869
      and $240,497, respectively                                                       141,085                      134,477
Due from related parties                                                                13,593                       19,111
Prepaid expenses                                                                        30,010                        2,847
Lease costs, less accumulated amortization of $10,481 and
      $8,831, respectively                                                               7,219                        8,869
Accrued rental income, less allowance for doubtful accounts
      of $47,718 in 2000 and 1999                                                      533,412                      491,616
Other assets                                                                            26,731                       26,731
                                                                            ------------------         --------------------

                                                                                  $ 29,820,589                 $ 30,120,859
                                                                            ==================         ====================


              LIABILITIES AND PARTNERS' CAPITAL


Accounts payable                                                                    $   41,715                   $  131,093
Escrowed real estate taxes payable                                                      11,126                       11,572
Due to related parties                                                                   5,396                       65,220
Distributions payable                                                                  787,500                      787,500
Rents paid in advance and deposits                                                      12,119                       16,000
                                                                             ------------------         --------------------
        Total liabilities                                                              857,856                    1,011,385

Minority interest                                                                      140,333                      153,870

Partners' capital                                                                   28,822,400                   28,955,604
                                                                            ------------------         --------------------

                                                                                  $ 29,820,589                 $ 30,120,859
                                                                             ==================         ====================

                See accompanying notes to financial statements.
<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                              STATEMENTS OF INCOME


                                                                               Year Ended December 31,
                                                                      2000                1999               1998
                                                                ------------------   ---------------    ---------------

Revenues:
     Rental income from operating leases                            $   1,935,866      $  2,226,183       $  2,520,346
     Adjustments to accrued rental income                                      --            (8,774 )         (167,227 )
     Earned income from direct financing leases                           419,511           458,549            470,258
     Contingent rental income                                             152,450           149,981            156,676
     Interest and other income                                             58,100           147,908            110,502
                                                                  ---------------    ---------------    ---------------
                                                                        2,565,927         2,973,847          3,090,555
                                                                ------------------   ---------------    ---------------
Expenses:
     General operating and administrative                                 169,603           158,011            160,358
     Professional services                                                 45,719            45,076             32,400
     Bad debt expense                                                          --                --             12,854
     Real estate taxes                                                      3,780                --                 --
     State and other taxes                                                 18,720            10,042             10,392
     Depreciation and amortization                                        368,978           411,907            458,558
     Transaction costs                                                     34,287           174,233             20,211
                                                                ------------------   ---------------    ---------------
                                                                          641,087           799,269            694,773
                                                                ------------------   ---------------    ---------------
Income Before Minority Interest in Income of Consolidated
     Joint Venture, Equity in Earnings of Unconsolidated
     Joint Ventures, Gain on  Sale of Assets, Provision for
     Loss on Assets, and Lease Termination Income                       1,924,840         2,174,578          2,395,782

Minority Interest in Income of Consolidated Joint Venture                 (27,169  )        (37,050  )         (43,128 )

Equity in Earnings of Unconsolidated Joint Ventures                       672,749           524,643            323,105

Gain on Sale of Assets                                                    639,806           848,303            345,122

Provision for Loss on Assets                                             (368,430  )             --                 --

Lease Termination Income                                                  175,000                --                 --
                                                                  ---------------    ---------------    ---------------

Net Income                                                          $   3,016,796      $  3,510,474       $  3,020,881
                                                                ==================   ===============    ===============

Allocation of Net Income:
     General partners                                                   $      --        $   33,908         $   28,327
     Limited partners                                                   3,016,796         3,476,566          2,992,554
                                                                ------------------   ---------------    ---------------

                                                                    $   3,016,796      $  3,510,474       $  3,020,881
                                                                ==================   ===============    ===============

Net Income Per Limited Partner Unit                                   $     43.10        $    49.67         $    42.75
                                                                ==================   ===============    ===============

Weighted Average Number of Limited Partner Units Outstanding
                                                                           70,000            70,000             70,000
                                                                ==================   ===============    ===============

                See accompanying notes to financial statements.
<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                         STATEMENTS OF PARTNERS' CAPITAL

                  Years Ended December 31, 2000, 1999 and 1998


                                 General Partners                                      Limited Partners
                              ------------------------------  ----------------------------------------------------------------------
                                             Accumulated                                       Accumulated    Syndication
                              Contributions   Earnings    Contributions     Distributions      Earnings        Costs        Total
                              ------------- -----------  ---------------   --------------- --------------- ------------ ------------

Balance, December 31, 1997     $  1,000       $228,363    $  35,000,000    $ (25,584,226 )  $  23,164,112   $(4,015,000)$28,794,249

    Distributions to limited
       partners ($46.00 per
       limited partner unit)         --            --               --       (3,220,000 )             --           --    (3,220,000)
    Net income                       --         28,327               --               --        2,992,554           --    3,020,881
                              ------------- --------------  ---------------   --------------- ------------- ------------ -----------

Balance, December 31, 1998        1,000        256,690       35,000,000      (28,804,226 )     26,156,666    (4,015,000) 28,595,130

    Distributions to limited
       partners ($45.00 per
       limited partner unit)         --             --               --       (3,150,000 )             --           --   (3,150,000)
    Net income                       --         33,908               --               --        3,476,566           --    3,510,474
                              ------------- --------------  ---------------   --------------- --------------- ------------ ---------

Balance, December 31, 1999        1,000        290,598       35,000,000      (31,954,226 )     29,633,232    (4,015,000) 28,955,604

    Distributions to limited
       partners ($45.00 per
       limited partner unit)         --             --               --       (3,150,000 )             --           --   (3,150,000)
    Net income                       --             --               --               --        3,016,796           --    3,016,796
                              ------------- --------------  ---------------   --------------- --------------- ------------ ---------

Balance, December 31, 2000     $  1,000       $290,598    $  35,000,000    $ (35,104,226 )  $  32,650,028    (4,015,000)$28,822,400
                              ============= ==============  ===============   =============== =============== ============ =========



                See accompanying notes to financial statements.
<PAGE>



                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                            STATEMENTS OF CASH FLOWS


                                                                                Year Ended December 31,
                                                                    2000                1999                  1998
                                                               ---------------     ---------------       ---------------

Increase ( Decrease) in Cash and Cash Equivalents:

Cash Flows from Operating Activities:
    Cash received from tenants                                   $  2,647,604        $  2,817,707         $  3,092,644
    Distributions from unconsolidated joint ventures                  881,943             483,152              328,721
    Cash paid for expenses                                           (437,139)           (227,913)            (270,339)
    Interest received                                                  43,891             131,988               92,634
                                                            ------------------  ------------------   ------------------
        Net cash provided by operating activities                   3,136,299           3,204,934            3,243,660
                                                            ------------------  ------------------   ------------------

Cash Flows from Investing Activities:
    Proceeds from sale of assets                                    2,071,847           4,316,145            2,832,253
    Additions to land and buildings on operating leases
                                                                           --                  --             (125,000)
    Investment in joint ventures                                   (1,112,500)         (3,314,843)          (3,896,598)
    Investment in certificate of deposit                             (100,000)                 --                   --
    Decrease (increase) in restricted cash                         (2,061,560)                 --              697,650
    Payment of lease costs                                                 --              (3,300)              (3,300)
    Other                                                                  --                  --                  (84)
                                                            ------------------  ------------------   ------------------

        Net cash provided by (used in) investing
           activities                                              (1,202,213)            998,002             (495,079)
                                                            ------------------  ------------------   ------------------

Cash Flows from Financing Activities:
    Distributions to limited partners                              (3,150,000)         (3,220,000)          (3,150,000)
    Distributions to holder of minority interest                      (40,706)            (28,129)             (42,654)
                                                            ------------------  ------------------   ------------------
        Net cash used in financing activities                      (3,190,706)         (3,248,129)          (3,192,654)
                                                            ------------------  ------------------   ------------------

Net Increase (Decrease) in Cash and Cash
    Equivalents                                                    (1,256,620)            954,807             (444,073)

Cash and Cash Equivalents at Beginning of Year                      2,125,493           1,170,686            1,614,759
                                                            ------------------  ------------------   ------------------

Cash and Cash Equivalents at End of Year                          $   868,873        $  2,125,493         $  1,170,686
                                                            ==================  ==================   ==================

                See accompanying notes to financial statements.
<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                      STATEMENTS OF CASH FLOWS - CONTINUED


                                                                                   Year Ended December 31,
                                                                            2000               1999               1998
                                                                       ---------------    ---------------    ---------------

Reconciliation of Net Income to Net Cash Provided by Operating
    Activities:

       Net income                                                        $  3,016,796       $  3,510,474       $  3,020,881
                                                                      ---------------    ---------------     ---------------

       Adjustments to  reconcile  net income to net cash  provided
          by  operating activities:
            Depreciation                                                      367,328            410,257            456,958
            Amortization                                                        1,650              1,650              1,600
            Bad debt expense                                                       --                 --             12,854
            Equity in earnings of unconsolidated joint ventures,
               net of distributions                                           209,194            (41,491 )            5,616
            Gain on sale of assets                                           (639,806 )         (848,303 )         (345,122 )
            Provision for loss on assets                                      368,430                 --                 --
            Minority interest in income of consolidated joint
               venture                                                         27,169             37,050             43,128
            Decrease in due from related parties                                5,518                 --                 --
            Decrease (increase) in receivables                                (10,584 )           (2,676 )            8,649
            Decrease (increase) in prepaid expenses                           (27,163 )           (1,898 )            3,286
            Decrease in net investment in direct financing leases              68,794             64,697             63,868
            Decrease (increase) in accrued rental income                      (97,498 )          (95,735 )           51,142
            Increase (decrease) in accounts payable and accrued
               expenses                                                       (89,824 )          135,333            (37,246 )
            Increase (decrease ) in due to related parties                    (59,824 )           45,817            (12,532 )
            Increase (decrease) in rents paid in advance and
               deposits                                                        (3,881 )          (10,241 )          (29,422 )
                                                                       ---------------    ---------------    ---------------
            Total adjustments                                                 119,503           (305,540 )          222,779
                                                                       ---------------    ---------------    ---------------

Net Cash Provided by Operating Activities                                $  3,136,299       $  3,204,934       $  3,243,660
                                                                       ===============    ===============    ===============

Supplemental Schedule of Non-Cash Financing Activities:

       Distributions declared and unpaid at December 31                   $   787,500        $   787,500        $   857,500
                                                                       ===============    ===============    ===============


                See accompanying notes to financial statements.

</TABLE>

<PAGE>
                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                          NOTES TO FINANCIAL STATEMENTS

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies:
         -------------------------------

         Organization  and Nature of Business - CNL Income  Fund VI,  Ltd.  (the
         "Partnership") is a Florida limited  partnership that was organized for
         the purpose of acquiring both newly constructed and existing restaurant
         properties,  as well as properties  upon which  restaurants  were to be
         constructed,  which are leased  primarily  to operators of national and
         regional fast-food and family-style restaurant chains.

         The general partners of the Partnership are CNL Realty Corporation (the
         "Corporate  General  Partner"),  James M.  Seneff,  Jr.  and  Robert A.
         Bourne.  Mr. Seneff and Mr. Bourne are also 50 percent  shareholders of
         the Corporate General Partner. The general partners have responsibility
         for managing the day-to-day operations of the Partnership.

         Real  Estate  and  Lease  Accounting  -  The  Partnership  records  the
         acquisition of land and buildings at cost,  including  acquisition  and
         closing costs. Land and buildings are leased to unrelated third parties
         generally on a triple-net basis,  whereby the tenant is responsible for
         all operating  expenses  relating to the property,  including  property
         taxes, insurance, maintenance and repairs. The leases are accounted for
         using  either the  direct  financing  or the  operating  methods.  Such
         methods are described below:

                  Direct  financing  method - The leases accounted for using the
                  direct  financing  method are recorded at their net investment
                  (which at the inception of the lease generally  represents the
                  cost of the asset) (Note 4).  Unearned  income is deferred and
                  amortized  to income  over the lease  terms so as to produce a
                  constant  periodic  rate of  return on the  Partnership's  net
                  investment in the leases.

                  Operating  method - Land and  building  leases  accounted  for
                  using the  operating  method are recorded at cost,  revenue is
                  recognized as rentals are earned and  depreciation  is charged
                  to operations as incurred.  Buildings are  depreciated  on the
                  straight-line  method over their estimated  useful lives of 30
                  years.  When  scheduled  rentals  vary  during the lease term,
                  income is recognized on a straight-line basis so as to produce
                  a constant periodic rent over the lease term commencing on the
                  date the property is placed in service.




<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

                  Accrued  rental  income  represents  the  aggregate  amount of
                  income  recognized  on a  straight-line  basis  in  excess  of
                  scheduled rental payments to date.  Whenever a tenant defaults
                  under  the  terms  of its  lease,  or  events  or  changes  in
                  circumstance  indicate  that the  tenant  will not  lease  the
                  property  through the end of the lease term,  the  Partnership
                  either  reserves or reverses  the  cumulative  accrued  rental
                  income balance.

         When  the  properties  are  sold,  the  related  cost  and  accumulated
         depreciation  for operating  leases and the net  investment  for direct
         financing leases,  plus any accrued rental income, are removed from the
         accounts and gains or losses from sales are  reflected  in income.  The
         general  partners of the Partnership  review  properties for impairment
         whenever events or changes in circumstances  indicate that the carrying
         amount of the assets may not be  recoverable  through  operations.  The
         general partners  determine whether an impairment in value has occurred
         by comparing the estimated future  undiscounted  cash flows,  including
         the  residual  value of the  property,  with the  carrying  cost of the
         individual  property.  If an impairment  is  indicated,  the assets are
         adjusted to the fair value.  Although  the general  partners  have made
         their best estimate of these factors based on current conditions, it is
         reasonably  possible  that  changes  could occur in the near term which
         could adversely affect the general  partners' best estimate of net cash
         flows  expected to be generated  from its  properties  and the need for
         asset impairment write-downs.

         When the  collection  of amounts  recorded as rental or other income is
         considered  to be  doubtful,  an  adjustment  is made to  increase  the
         allowance for doubtful  accounts,  which is netted against  receivables
         and accrued  rental income,  and to decrease  rental or other income or
         increase  bad  debt  expense  for  the  current  period,  although  the
         Partnership  continues to pursue collection of such amounts. If amounts
         are  subsequently  determined to be  uncollectible,  the  corresponding
         receivable   and   allowance   for  doubtful   accounts  are  decreased
         accordingly.

         Investment  in Joint  Ventures - The  Partnership  accounts  for its 66
         percent interest in Caro Joint Venture, a Florida general  partnership,
         using  the  consolidation  method.  Minority  interests  represent  the
         minority joint venture partners'  proportionate  share of equity in the
         Partnership's  consolidated joint venture. All significant intercompany
         accounts and transactions have been eliminated.


<PAGE>

                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

         The Partnership's  investments in Auburn Joint Venture,  Show Low Joint
         Venture,  Asheville Joint Venture,  Warren Joint Venture, and Melbourne
         Joint Venture and  properties in Clinton,  North  Carolina;  Vancouver,
         Washington;  Overland Park,  Kansas;  Memphis,  Tennessee;  Fort Myers,
         Florida;  Baytown,  Texas; Round Rock, Texas; Dublin,  California;  and
         Niles,  Illinois,  each of  which  is held  as  tenants-in-common  with
         affiliates of the general partners,  are accounted for using the equity
         method since the Partnership shares control with the affiliates.

         Cash and Cash Equivalents - The Partnership considers all highly liquid
         investments  with a maturity of three months or less when  purchased to
         be cash  equivalents.  Cash  and cash  equivalents  consist  of  demand
         deposits at commercial  banks and money market funds (some of which are
         backed by government  securities).  Cash equivalents are stated at cost
         plus accrued interest, which approximates market value.

         Cash  accounts  maintained  on  behalf  of the  Partnership  in  demand
         deposits  at  commercial  banks  and  money  market  funds  may  exceed
         federally insured levels;  however, the Partnership has not experienced
         any losses in such accounts.

         Lease  Costs - Brokerage  fees and lease  incentive  costs  incurred in
         finding new tenants and  negotiating  new leases for the  Partnership's
         properties  are  amortized  over the terms of the new leases  using the
         straight-line method.

         Income Taxes - Under  Section 701 of the  Internal  Revenue  Code,  all
         income,  expenses and tax credit items flow through to the partners for
         tax  purposes.  Therefore,  no  provision  for federal  income taxes is
         provided in the accompanying  financial statements.  The Partnership is
         subject to certain state taxes on its income and property.

         Additionally,  for tax  purposes,  syndication  costs are  included  in
         Partnership equity and in the basis of each partner's  investment.  For
         financial  reporting  purposes,  syndication  costs are netted  against
         partners' capital and represent a reduction of Partnership equity and a
         reduction in the basis of each partner's investment.




<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

         Use of Estimates - The general  partners of the Partnership have made a
         number of estimates and assumptions relating to the reporting of assets
         and liabilities and the disclosure of contingent assets and liabilities
         to prepare these  financial  statements in  conformity  with  generally
         accepted  accounting  principles.  The more significant areas requiring
         the use of  management  estimates  relate to the allowance for doubtful
         accounts  and future  cash flows  associated  with  long-lived  assets.
         Actual results could differ from those estimates.

         Staff  Accounting  Bulletin No. 101 ("SAB 101") - In December 1999, the
         Securities and Exchange Commission released SAB 101, which provides the
         staff's view in applying  generally accepted  accounting  principles to
         selected revenue  recognition  issues. SAB 101 requires the Partnership
         to defer recognition of certain  percentage rental income until certain
         defined  thresholds are met. The Partnership  adopted SAB 101 beginning
         January  1,  2000.  Implementation  of SAB 101 did not have a  material
         impact on the Partnership results of operations.

         Statement of  Financial  Accounting  Standards  No. 133 ("FAS 133") and
         Statement of Financial  Accounting  Standards  No. 137 ("FAS 137") - In
         June 1998, the Financial Accounting Standards Board issued Statement of
         Financial  Accounting  Standards No. 133,  "Accounting  for  Derivative
         Instruments  and  Hedging   Activities."   The  Statement   establishes
         accounting  and  reporting   standards  for   derivative   instruments,
         including certain derivative  instruments,  embedded in other contracts
         (collectively referred to as derivatives),  and for hedging activities.
         The Statement  requires that an entity  recognize  all  derivatives  as
         either  assets or  liabilities  in the balance  sheet and measure those
         instruments  at fair  value.  In June 1999,  the  Financial  Accounting
         Standards Board issued Statement of Financial  Accounting Standards No.
         137,  "Accounting for Derivative  Instruments and Hedging  Activities -
         Deferral of the Effective  Date of FASB Statement No. 133, an Amendment
         of FASB  Statement No. 133." FAS 137 deferred the effective date of FAS
         133 for one year. FAS 133, as amended,  is now effective for all fiscal
         quarters  of all  fiscal  years  beginning  after  June 15,  2000.  The
         Partnership  has reviewed both  statements and has determined that both
         FAS 133 and FAS 137 do not apply to the  Partnership as of December 31,
         2000.



<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


2.       Leases:
         ------

         The Partnership  leases its land and buildings to operators of national
         and regional  fast-food and  family-style  restaurants.  The leases are
         accounted for under the provisions of Statement of Financial Accounting
         Standards  No. 13,  "Accounting  for Leases." The leases  generally are
         classified  as  operating  leases;   however,  some  leases  have  been
         classified as direct  financing  leases.  For the leases  classified as
         direct financing  leases,  the building portions of the property leases
         are accounted for as direct financing leases while the land portions of
         some of these leases are operating leases. Substantially all leases are
         for 15 to 20 years and provide for minimum and contingent  rentals.  In
         addition,  the tenant pays all property  taxes and  assessments,  fully
         maintains  the  interior  and  exterior  of the  building  and  carries
         insurance  coverage for public  liability,  property  damage,  fire and
         extended  coverage.  The lease options generally allow tenants to renew
         the leases for two to four successive  five-year periods subject to the
         same terms and conditions as the initial lease.  Most leases also allow
         the tenant to  purchase  the  property  at fair  market  value  after a
         specified portion of the lease has elapsed.

3.       Land and Buildings on Operating Leases:
         --------------------------------------

         Land and  buildings on operating  leases  consisted of the following at
         December 31:
<TABLE>
<CAPTION>
<S> <C>
                                                                      2000                 1999
                                                               -------------------   ------------------

                  Land                                               $  6,719,502          $ 7,094,433
                  Buildings                                            10,239,615           11,233,038

                                                               -------------------   ------------------

                                                                       16,959,117           18,327,471
                  Less accumulated depreciation                        (3,162,184 )         (3,257,666 )
                                                               -------------------   ------------------
                                                                       13,796,933           15,069,805
                  Less allowance for loss on
                       land and building                                 (368,430 )                 --
                                                               -------------------   ------------------

                                                                     $ 13,428,503         $ 15,069,805
                                                               ===================   ==================
</TABLE>


         In June 1999, the Partnership sold four Burger King properties,  one in
         each  of  Sevierville,   Walker  Springs,   Broadway  and  Greeneville,
         Tennessee,  to the tenant in accordance with the purchase options under
         the  lease  agreements,  for a total of  approximately  $4,354,000  and
         received net sales proceeds of $4,316,145, resulting in a total gain of
         $848,303  for  financial  reporting  purposes.  These  properties  were
         originally

<PAGE>



                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


3.       Land and Buildings on Operating Leases - Continued:
         ---------------------------------------------------

         acquired  by the  Partnership  in January  1990 and had costs  totaling
         approximately $3,535,700,  excluding acquisition fees and miscellaneous
         acquisition expenses;  therefore, the Partnership sold these properties
         for a total of  approximately  $780,400  in  excess  of their  original
         purchase prices. In October 1999, the Partnership  reinvested a portion
         of the net sales proceeds in two properties  located in Baytown,  Texas
         and Round Rock, Texas, each as tenants-in-common with affiliates of the
         general  partners.  In  addition,  in November  1999,  the  Partnership
         acquired a property in Dublin, California, as tenants-in common with an
         affiliate of the general  partners.  In January 2000,  the  Partnership
         reinvested  the remaining net sales  proceeds in a property  located in
         Niles,  Illinois, as a tenants-in-common with affiliates of the general
         partners (see Note 5).

         In September 2000, the Partnership  sold four of its properties,  three
         in Jacksonville,  Florida and one in Tallahassee,  Florida,  to a third
         party for a total of  approximately  $2,081,800  and received net sales
         proceeds totaling approximately  $2,071,800 resulting in gains totaling
         approximately   $639,800  for  financial  reporting   purposes.   These
         properties were originally  acquired by the Partnership in 1990 and had
         costs totaling approximately  $1,708,900 excluding acquisition fees and
         miscellaneous acquisition expenses; therefore, the Partnership sold the
         properties  for  approximately  $362,900  in excess  of their  original
         purchase prices.  In February 2001, the Partnership  reinvested the net
         sales proceeds to acquire two properties located in Burley, Indiana and
         Cleburne, Texas at an approximate cost of $2,098,400 (see Note 13).

         During 2000, the Partnership recorded a provision for loss on assets of
         $368,430 relating to the property located in Chester,  Pennsylvania due
         to the fact that the operator of this property vacated the property and
         ceased  operations.  The provision for loss  represented the difference
         between the net  carrying  value of the  property at December 31, 2000,
         and the realizable value for this property.

         Some leases provide for escalating  guaranteed minimum rents throughout
         the  lease  terms.  Income  from  these  scheduled  rent  increases  is
         recognized on a straight-line  basis over the terms of the leases.  For
         the years ended  December 31, 2000,  1999,  and 1998,  the  Partnership
         recognized income of $97,498,  $95,735 (net of $8,774 in reserves), and
         a loss  of  $51,142  (net of  $155,528  in  reversals  and  $11,699  in
         reserves),  respectively,  of such rental  income.  The  following is a
         schedule  of the  future  minimum  lease  payments  to be  received  on
         noncancellable operating leases at December 31, 2001:


<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


3.       Land and Buildings on Operating Leases - Continued:
         ---------------------------------------------------

                     2001                                  $1,733,526
                     2002                                   1,748,610
                     2003                                   1,740,021
                     2004                                   1,727,876
                     2005                                   1,059,857
                     Thereafter                             6,363,472
                                                      ----------------

                                                          $14,373,362
                                                      ================

         Since  lease  renewal  periods  are  exercisable  at the  option of the
         tenant, the above table only presents future minimum lease payments due
         during  the  initial  lease  terms.  In  addition,  this table does not
         include any amounts for future contingent rentals which may be received
         on the leases based on a percentage of the tenant's gross sales.

4.       Net Investment in Direct Financing Leases:
         ------------------------------------------

         The  following  lists the  components  of the net  investment in direct
         financing leases at December 31:
<TABLE>
<CAPTION>
<S> <C>
                                                                          2000                 1999
                                                                     ----------------    -----------------

                Minimum lease payments receivable                        $ 5,684,730          $ 6,726,045
                Estimated residual values                                  1,244,870            1,440,446
                Less unearned income                                      (3,604,734 )         (4,302,036 )
                                                                     -----------------   ----------------

                Net investment in direct financing leases                $ 3,324,866          $ 3,864,455
                                                                     ================    =================


</TABLE>

<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


4.       Net Investment in Direct Financing Leases - Continued:
         ------------------------------------------------------

         The  following  is a schedule of future  minimum  lease  payments to be
         received on direct financing leases at December 31, 2000:

                      2001                                $  439,616
                      2002                                   439,616
                      2003                                   439,616
                      2004                                   439,616
                      2005                                   442,505
                      Thereafter                           3,483,761
                                                    -----------------
                                                         $ 5,684,730
                                                    =================

         The above table does not include  future  minimum  lease  payments  for
         renewal  periods or for contingent  rental payments that may become due
         in future periods (see Note 3).

         During the year ended  December  31, 2000,  the tenant  relating to the
         property in  Chester,  Pennsylvania,  defaulted  under the terms of its
         lease and vacated the property and terminated its lease.  In connection
         with the termination,  the Partnership  received  termination income in
         consideration  for  the  Partnership  releasing  the  tenant  from  its
         obligations under the lease. As a result, the Partnership  reclassified
         the related  assets from net investment in direct  financing  leases to
         land and building on operating  leases. In accordance with Statement of
         Financial  Accounting  Standards No. 13,  "Accounting  for Leases," the
         Partnership  recorded the  reclassified  asset at the lower of original
         cost,  present  fair  value,  or  present  carrying  value.  No loss on
         termination  of direct  financing  leases was  recorded  for  financial
         reporting purposes (see Note 3).

5.       Investment in Joint Ventures:
         ----------------------------

         The  Partnership has a 3.9%, 36 percent,  14.46%,  64.29%,  23.04%,  18
         percent,  34.74%,  46.2% and 85 percent  interest  in the  profits  and
         losses of Auburn Joint Venture, Show Low Joint Venture, Asheville Joint
         Venture, Warren Joint Venture, a property in Vancouver,  Washington,  a
         property  in Clinton,  North  Carolina,  a property  in Overland  Park,
         Kansas,  and a property in Memphis,  Tennessee,  and a property in Fort
         Myers, Florida, held as tenants-in-common,  respectively. The remaining
         interests in these joint ventures and the properties held as tenants in
         common are held by  affiliates of the  Partnership  which have the same
         general partners.

<PAGE>

                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


5.       Investment in Joint Ventures - Continued:
         ----------------------------------------

         In October  1999,  the  Partnership  used the majority of the net sales
         proceeds  from the  sales  of the  properties  in  Walker  Springs  and
         Broadway,  Tennessee,  to  invest  in two  properties,  one in  each of
         Baytown,  Texas and Round Rock,  Texas,  with CNL Income Fund III, Ltd.
         and CNL Income Fund XI, Ltd.,  respectively,  affiliates of the general
         partners,  as  tenants-in-common,  for an 80  percent  and a 77 percent
         interest, respectively, in the properties. As of December 31, 2000, the
         Partnership  had  contributed  a total of  approximately  $2,108,100 to
         these tenancy in common arrangements.

         In addition, in November 1999, the Partnership used the majority of the
         net  sales  proceeds  from the  sale of the  property  in  Greeneville,
         Tennessee,   and  the  property  in  Liverpool,  New  York,  to  invest
         $1,162,602  in an IHOP Property in Dublin,  California  with CNL Income
         Fund  IX,   Ltd.,   an   affiliate   of  the   general   partners,   as
         tenants-in-common, for 75 percent interest in the property.

         In  April  1998,   the   Partnership   entered  into  a  joint  venture
         arrangement,  Melbourne Joint Venture, with an affiliate of the general
         partners,  to construct and hold one restaurant  property.  During 1999
         and  1998,  the  Partnership  contributed   approximately  $44,120  and
         $494,900,  respectively,  to purchase land and pay  construction  costs
         relating to the property  owned by the joint  venture.  At December 31,
         1999, the  Partnership  had an  approximate 50 percent  interest in the
         profits and losses of the joint venture.

         During  2000,  the lease  relating to the  property  owned by Melbourne
         Joint Venture was amended to provide for rent reductions.  As a result,
         the joint  venture  reclassified  the building  portion of the property
         from a net investment in direct  financing lease to an operating lease.
         In accordance with Statement of Financial  Accounting Standards No. 13,
         "Accounting  for Leases" the joint  venture  recorded the  reclassified
         asset at the lower of original  cost,  present  fair value,  or present
         carrying value. No loss on termination of direct  financing  leases was
         recorded for financial reporting purposes. As of December 31, 2000, the
         joint  venture,  in which the  Partnership  has a 50 percent  interest,
         recorded a provision for loss on assets totaling approximately $219,100
         for financial reporting purposes,  due to the fact that the operator of
         this property vacated the property and ceased operations. The allowance
         represented the difference between the property's net carrying value at
         December 31, 2000 and the current  estimate of net realizable  value of
         the property.



<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                                   Years Ended December 31, 2000, 1999, and 1998


5.       Investment in Joint Ventures - Continued:
         ----------------------------------------

         In January 2000, the Partnership  used the net sales proceeds  received
         from the 1999 sale of a property in Sevierville,  Tennessee, to acquire
         an interest in a Baker's Square property in Niles,  Illinois,  with CNL
         Income Fund XIV, Ltd., a Florida  limited  partnership and an affiliate
         of the general partners, as tenants-in-common. The Partnership acquired
         this interest from CNL BB Corp., an affiliate of the general  partners.
         In connection therewith,  the Partnership and CNL Income Fund XIV, Ltd.
         entered into an agreement  whereby each  co-venturer  will share in the
         profits and losses of the  property  in  proportion  to its  applicable
         percentage interest.  The Partnership accounts for its interest in this
         property using the equity method since the  Partnership  shares control
         with an affiliate.  As of December 31, 2000, the Partnership owned a 74
         percent interest in this property.

         Auburn Joint Venture, Show Low Joint Venture,  Asheville Joint Venture,
         Melbourne Joint Venture,  Warren Joint Venture, and the Partnership and
         affiliates  as  tenants-in-common  in nine  separate  tenancy-in-common
         arrangements,  each  own and  lease  one  property  to an  operator  of
         national fast-food and family-style restaurants. The following presents
         the combined,  condensed  financial  information for the joint ventures
         and  the  properties  held  as  tenants-in-common  with  affiliates  at
         December 31:
<TABLE>
<CAPTION>
<S> <C>
                                                                          2000                      1999
                                                                -----------------------     --------------------

               Land and buildings on operating leases, less
                    accumulated depreciation and
                    allowance for loss on assets                          $  14,169,149             $ 12,510,374
               Net investment in direct financing leases                      3,273,874                3,938,686
               Cash                                                              43,276                   83,127
               Receivables, less allowance for
                    doubtful accounts                                            41,191                  103,745
               Accrued rental income                                            476,522                  350,510
               Other assets                                                       1,927                    2,320
               Liabilities                                                       23,270                   93,231
               Partners' capital                                             17,982,669               16,895,531
               Revenues                                                       1,861,676                1,435,647
               Provision for loss on assets                                    (219,053 )                     --
               Net income                                                     1,320,968                1,258,086

</TABLE>


<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


5.       Investment in Joint Ventures - Continued:
         ----------------------------------------

         The Partnership  recognized  income totaling  $672,749,  $524,643,  and
         $323,105  for the  years  ended  December  31,  2000,  1999,  and 1998,
         respectively, from these joint ventures.

6.       Restricted Cash:
         ---------------

         As of December 31, 2000, the net sales proceeds of $2,061,560  from the
         sales of the four Popeye's  properties,  plus accrued interest of $476,
         were being held in interest-bearing escrow accounts pending the release
         of funds by the escrow agent to acquire additional properties on behalf
         of the Partnership.

7.       Receivables:
         -----------

         In June 1997, the  Partnership  terminated the lease with the tenant of
         the property in  Greensburg,  Indiana.  In  connection  therewith,  the
         Partnership  accepted  a  promissory  note from the  former  tenant for
         $13,077  for  amounts  relating  to past  due  real  estate  taxes  the
         Partnership had incurred as a result of the former  tenant's  financial
         difficulties.  The promissory  note, which is  uncollateralized,  bears
         interest at a rate of ten percent per annum and is being  collected  in
         36 monthly  installments.  Receivables  at December  31, 2000 and 1999,
         included $1,657 and $3,437, respectively, of such amounts.

8.       Allocations and Distributions:
         -----------------------------

         From inception through December 31, 1999, generally, all net income and
         net losses of the Partnership, excluding gains and losses from the sale
         of properties,  were  allocated 99 percent to the limited  partners and
         one percent to the general  partners.  From inception  through December
         31,  1999  distributions  of net cash flow were made 99  percent to the
         limited  partners  and one  percent to the general  partners;  provided
         however, that the one percent of net cash flow to be distributed to the
         general partners was subordinated to receipt by the limited partners of
         an aggregate, ten percent,  cumulative,  noncompounded annual return on
         their adjusted capital contributions (the "10% Preferred Return").

         From inception through December 31, 1999, generally, net sales proceeds
         from the sale of properties not in liquidation of the  Partnership,  to
         the extent distributed,  were distributed first to the limited partners
         in an  amount  sufficient  to  provide  them with  their 10%  Preferred
         Return,  plus the return of their adjusted capital  contributions.  The
         general


<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


8.       Allocations and Distributions - Continued:
         -----------------------------------------

         partners  then  received,  to the extent  previously  subordinated  and
         unpaid, a one percent  interest in all prior  distributions of net cash
         flow and a return of their capital  contributions.  Any remaining sales
         proceeds were  distributed 95 percent to the limited  partners and five
         percent to the general  partners.  Any gain from the sale of a property
         not in liquidation of the Partnership was, in general, allocated in the
         same manner as net sales proceeds are distributable.  Any loss from the
         sale of a property  was, in  general,  allocated  first,  on a pro rata
         basis,  to partners with positive  balances in their capital  accounts;
         and thereafter,  95 percent to the limited partners and five percent to
         the general partners.

         Generally,  net sales  proceeds from a liquidating  sale of properties,
         will be used in the following order: (i) first to pay and discharge all
         of  the  Partnership's   liabilities  to  creditors,  (ii)  second,  to
         establish  reserves that may be deemed necessary for any anticipated or
         unforeseen liabilities or obligations of the Partnership,  (iii) third,
         to pay all of the Partnership's liabilities, if any, to the general and
         limited partners,  (iv) fourth,  after allocations of net income, gains
         and/or  losses,  to distribute  to the partners  with positive  capital
         accounts  balances,  in  proportion  to such  balances,  up to  amounts
         sufficient  to  reduce  such  positive   balances  to  zero,   and  (v)
         thereafter, any funds remaining shall then be distributed 95 percent to
         the limited partners and five percent to the general partners.

         Effective  January 1, 2000, the general  partners waived their right to
         receive  future  distributions  from the  Partnership,  including  both
         distributions  of operating cash flow and  distributions of liquidation
         proceeds,   to  the  extent   that  the   cumulative   amount  of  such
         distributions would exceed the balance in the general partners' capital
         account as of December  31,  1999.  Accordingly,  for years  commencing
         January  1,  2000 and  after,  the  Partnership's  net  income  will be
         allocated entirely among the limited partners.  However,  if losses are
         allocated to the general  partners in a year, an amount of income equal
         to the sum of such losses may be  allocated  to the general  partner in
         succeeding years. Accordingly,  the general partners were not allocated
         any net income and did not  receive any  distributions  during the year
         ended December 31, 2000.

         During  the  years  ended  December  31,  2000,  1999,  and  1998,  the
         Partnership   declared   distributions   to  the  limited  partners  of
         $3,150,000, $3,150,000, and $3,220,000,  respectively. No distributions
         have been made to the general partners to date.



<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


9.       Income Taxes:
         ------------

         The following is a reconciliation of net income for financial reporting
         purposes to net income for federal  income tax  purposes  for the years
         ended December 31:
<TABLE>
<CAPTION>
<S> <C>
                                                                             2000            1999             1998
                                                                        --------------- ---------------- ---------------

          Net income for financial reporting purposes                        3,016,796      $ 3,510,474     $ 3,020,881

          Depreciation for tax reporting purposes in excess of
               depreciation for financial reporting purposes                   (57,187)         (61,184)        (65,666)

          Allowance for loss on assets                                         368,430               --              --

          Direct financing leases recorded as operating leases for
               tax reporting purposes                                           68,794           64,696          63,868

          Gain and loss on sale of land and buildings  for  financial
               reporting purposes in excess of gain and loss on sale
               for tax reporting purposes                                     (639,806)        (459,787)       (543,697)

          Equity in earning  of  unconsolidated  joint  ventures  for
               financial reporting   purposes   in  excess  of  equity
               in   earnings   of unconsolidated joint ventures for tax
               reporting purposes                                                4,976          (70,289)        (14,400)

          Allowance for doubtful accounts                                      (46,628)         (83,316)        (39,597)

          Accrued rental income                                                (97,498)         (95,735)         51,142

          Rents paid in advance                                                 (4,381)         (10,241)        (30,922)

          Capitalization (deduction) of transaction costs for tax             (194,444)         174,233          20,211
               reporting purposes

          Minority interest in timing differences of consolidated
               joint venture                                                     3,761           15,618          14,513
                                                                        --------------- ---------------- ---------------

          Net income for federal income tax purposes                       $ 2,422,813      $ 2,984,469     $ 2,476,333
                                                                        =============== ================ ===============


</TABLE>

<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


10.      Related Party Transactions:
         --------------------------

         One of the individual general partners, James M. Seneff, Jr., is one of
         the principal  shareholders of CNL Holdings,  Inc. The other individual
         general partner, Robert A. Bourne, serves as President and Treasurer of
         CNL Financial  Group,  Inc., a wholly owned subsidiary of CNL Holdings,
         Inc..  CNL Fund  Advisors,  Inc. (the  "Advisor")  was a majority owned
         subsidiary  of CNL  Financial  Group,  Inc.  until it  merged  with CNL
         American  Properties Fund, Inc. ("APF"),  effective  September 1, 1999.
         The individual general partners are stockholders and directors of APF.

         The Advisor  provides  certain  services  relating to management of the
         Partnership and its properties pursuant to a management  agreement with
         the Partnership. In connection therewith, the Partnership agreed to pay
         the  Advisor  a  management  fee of one  percent  of the  sum of  gross
         revenues  from  properties  wholly  owned  by the  Partnership  and the
         Partnership's allocable share of gross revenues from joint ventures and
         the property held as  tenants-in-common  with an affiliate,  but not in
         excess of  competitive  fees for  comparable  services.  These fees are
         payable only after the limited  partners  receive  their 10%  Preferred
         Return.  Due to the fact  that  these  fees are  noncumulative,  if the
         limited  partners have not received  their 10% Preferred  Return in any
         particular  year,  no  management  fees will be due or payable for such
         year. As a result of such  threshold,  no management fees were incurred
         during the years ended December 31, 2000 and 1998.

         The Advisor is also entitled to receive a deferred,  subordinated  real
         estate disposition fee, payable upon the sale of one or more properties
         based on the lesser of one-half of a competitive real estate commission
         or  three  percent  of the  sales  price  if  the  Advisor  provides  a
         substantial amount of services in connection with the sale. However, if
         the sales proceeds are reinvested in a placement property, no such real
         estate  disposition  fees  will  be  incurred  until  such  replacement
         property  is sold  and the net  sales  proceeds  are  distributed.  The
         payment  of the real  estate  disposition  fee is  subordinated  to the
         receipt  by the  limited  partners  of their  aggregate  10%  Preferred
         Return,  plus  their  adjusted  capital  contributions.   No  deferred,
         subordinated  real estate  disposition  fees have been  incurred  since
         inception.

         During the year ended December 31, 2000, the Partnership and CNL Income
         Fund XIV, Ltd., as tenants-in-common, acquired an interest in a Baker's
         Square  property  from  CNL BB  Corp.,  an  affiliate  of  the  general
         partners,  for a purchase  price of  $1,112,500.  CNL Income  Fund XIV,
         Ltd., is a Florida limited partnership and an affiliate of the general

<PAGE>



                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


10.      Related Party Transactions - Continued:
         --------------------------------------

         partners. CNL BB Corp. had purchased and temporarily held title to this
         property in order to facilitate the  acquisition of the property by the
         Partnership.  The purchase price paid by the Partnership represents the
         costs  incurred  by CNL BB Corp.  to  acquire  and carry the  property,
         including  closing costs. In accordance with the Statement of Policy of
         Real Estate Programs for the North American  Securities  Administrators
         Association, Inc., all income, expense, profits and losses generated by
         or  associated  with the  property  were  treated as  belonging  to the
         Partnership.   As  of  December   31,   2000,   other   income  of  the
         tenants-in-common includes $2,103 of such amounts.

         During the years ended  December 31, 2000,  1999, and 1998, the Advisor
         and its affiliates provided  accounting and administrative  services to
         the Partnership on a day-to-day  basis including  services  relating to
         the proposed and terminated merger.  The Partnership  incurred $97,772,
         $118,067, and $107,969 for the years ended December 31, 2000, 1999, and
         1998, respectively, for such services.

         The due to  related  parties at  December  31,  2000 and 1999,  totaled
         $5,396 and $65,220, respectively.

11.      Concentration of Credit Risk:
         ----------------------------

         The  following  schedule  presents  total rental and earned income from
         individual  lessees,  each  representing  more than ten  percent of the
         Partnership's   total   rental  and  earned   income   (including   the
         Partnership's  share of total  rental  and  earned  income  from  joint
         ventures and the properties held as  tenants-in-common  with affiliates
         of the general partners) for each of the years ended December 31:
<TABLE>
<CAPTION>
<S> <C>
                                                                 2000               1999                1998
                                                             --------------    ----------------    ---------------

              IHOP Properties, Inc.                               $864,889           $ 574,011           $454,889
              Golden Corral Corporation                            771,099             761,226            758,646
              Restaurant Management of S.C. Inc.
                                                                       N/A             404,659            438,257
              Mid-America Corporation                                  N/A                 N/A            439,519

</TABLE>


<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


11.      Concentration of Credit Risk - Continued:
         ----------------------------------------

         In addition,  the following  schedule  presents total rental and earned
         income from individual  restaurant chains,  each representing more than
         ten  percent  of the  Partnership's  total  rental  and  earned  income
         (including  the  Partnership's  share of total rental and earned income
         from joint ventures and the properties held as  tenants-in-common  with
         affiliates  of the  general  partners)  for  each  of the  years  ended
         December 31:

<TABLE>
<CAPTION>
<S> <C>
                                                                 2000               1999                1998
                                                             --------------    ----------------    ----------------

              IHOP                                                $864,889           $ 574,011           $ 454,889
              Golden Corral Family Steakhouse Restaurants
                                                                   771,099             761,226             758,646
              Burger King                                              N/A                 N/A             453,634
</TABLE>

         The  information   denoted  by  N/A  indicates  that  for  each  period
         presented,  the tenant and the chains did not  represent  more than ten
         percent of the Partnership's total rental and earned income.

         Although  the  Partnership's   properties  are  geographically  diverse
         throughout the United States and the  Partnership's  lessees  operate a
         variety of restaurant concepts,  default by any one of these lessees or
         restaurant chains could significantly  impact the results of operations
         of the  Partnership  if the  Partnership  is not able to  re-lease  the
         properties in a timely manner.


<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2000, 1999, and 1998


12.      Selected Quarterly Financial Data:
         ----------------------------------

         The following table presents  selected  unaudited  quarterly  financial
         data for each full quarter during the years ended December 31, 2000 and
         1999.
<TABLE>
<CAPTION>
<S> <C>
              2000 Quarter               First            Second            Third            Fourth             Year
         ------------------------    --------------    -------------     -------------    --------------    --------------

         Revenue (1)                      $872,222         $685,446          $830,586          $823,253       $ 3,211,507
         Net income                        660,915          506,573         1,484,346           364,962         3,016,796
         Net income per
             limited partner
             unit                             9.35             7.16             21.02              5.57             43.10

              1999 Quarter               First            Second            Third            Fourth             Year
         ------------------------    --------------    -------------     -------------    --------------    --------------

         Revenue (1)                      $858,723         $862,048          $796,457          $944,212       $ 3,461,440
         Net income                        656,386        1,472,556           605,178           776,354         3,510,474
         Net income per
             limited partner
             unit                             9.28            20.84              8.56             10.99             49.67
</TABLE>

         (1)      Revenues  include equity in earnings of  unconsolidated  joint
                  ventures,  minority  interest in income of consolidated  joint
                  ventures and interest and other income.

13.      Subsequent Event:
         ----------------

         In January 2001, the Partnership used  approximately  $2,098,400 of the
         net sales  proceeds  received from the sale of four of its  properties,
         (three in Jacksonville,  Florida and one in Tallahassee,  Florida),  to
         acquire two properties located in Burley,  Indiana and Cleburne,  Texas
         from CNL Funding  2001-A,  LP, a Delaware  limited  partnership  and an
         affiliate  of  the  general  partners.  CNL  Funding  2001-A,  LP,  had
         purchased and  temporarily  held title to these  properties in order to
         facilitate the acquisition of the property by the Partnership.



<PAGE>



Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

         None.


                                    PART III


Item 10.  Directors and Executive Officers of the Registrant

         The General Partners of the Registrant are James M. Seneff, Jr., Robert
         A.  Bourne  and CNL  Realty  Corporation,  a Florida  corporation.  The
         General Partners manage and control the Partnership's  affairs and have
         general  responsibility  and  the  ultimate  authority  in all  matters
         affecting the Partnership's  business. The Partnership has available to
         it the services,  personnel and experience of CNL Fund Advisors,  Inc.,
         CNL  Financial  Group,  Inc.  and  their  affiliates,  all of which are
         affiliates of the General Partners.

         James M. Seneff, Jr., age 54. Since 1971, Mr. Seneff has been active in
         the  acquisition,  development,  and management of real estate projects
         and, directly or through an affiliated  entity, has served as a general
         partner or co-venturer in over 100 real estate ventures. These ventures
         have involved the financing, acquisition,  construction, and leasing of
         restaurants,  office buildings,  apartment complexes, hotels, and other
         real  estate.  Mr.  Seneff has served as Director  and  Chairman of the
         Board of CNL American Properties Fund, Inc. ("APF"), a public, unlisted
         real estate  investment  trust,  since 1994. Mr. Seneff served as Chief
         Executive  Officer of APF from 1994 through  August 1999 and has served
         as Co-Chief  Executive  Officer of APF since  December 2000. Mr. Seneff
         served as Chairman of the Board and Chief Executive Officer of CNL Fund
         Advisors (the  "Advisor")  until it merged with APF in September  1999,
         and in June 2000, was re-elected to those positions of the Advisor. Mr.
         Seneff is a principal  stockholder  of CNL Holdings,  Inc.,  the parent
         company of CNL Financial  Group,  Inc.  (formerly CNL Group,  Inc.),  a
         diversified real estate company, and has served as a director, Chairman
         of the Board and Chief Executive  Officer of CNL Financial Group,  Inc.
         since its formation in 1980.  CNL Financial  Group,  Inc. is the parent
         company,  either directly or indirectly  through  subsidiaries,  of CNL
         Real Estate Services,  Inc., CNL Capital Markets,  Inc., CNL Investment
         Company and CNL Securities  Corp. Mr. Seneff also serves as a Director,
         Chairman of the Board and Chief  Executive  Officer of CNL  Hospitality
         Properties,  Inc., a public,  unlisted real estate investment trust, as
         well as, CNL Hospitality Corp., its advisor. In addition,  he serves as
         a Director,  Chairman of the Board and Chief  Executive  Officer of CNL
         Retirement Properties,  Inc., a public, unlisted real estate investment
         trust and its advisor,  CNL Retirement Corp. Since 1992, Mr. Seneff has
         also  served as a Director,  Chairman of the Board and Chief  Executive
         Officer of  Commercial  Net Lease  Realty,  Inc.,  a public real estate
         investment  trust  that is listed on the New York Stock  Exchange.  Mr.
         Seneff has also served as a  Director,  Chairman of the Board and Chief
         Executive  Officer of CNL Securities  Corp.  since 1979; CNL Investment
         Company since 1990; and CNL Institutional Advisors,  Inc., a registered
         investment  advisor for pension plans,  since 1990. Mr. Seneff formerly
         served as a Director of First Union National Bank of Florida, N.A., and
         currently  serves as the Chairman of the Board of CNL Bank.  Mr. Seneff
         previously  served on the Florida  State  Commission on Ethics and is a
         former  member and past  Chairman  of the State of  Florida  Investment
         Advisory   Council,   which   recommends   to  the  Florida   Board  of
         Administration  investments  for various  Florida  employee  retirement
         funds.  The  Florida  Board  of  Administration,   Florida's  principal
         investment   advisory  and  money  management   agency,   oversees  the
         investment  of more than $60 billion of  retirement  funds.  Mr. Seneff
         received  his degree in  Business  Administration  from  Florida  State
         University in 1968.

         Robert A.  Bourne,  age 53. Mr.  Bourne has  participated  as a general
         partner or co-venturer in over 100 real estate ventures involved in the
         financing,  acquisition,  construction,  and  leasing  of  restaurants,
         office buildings,  apartment complexes,  hotels, and other real estate.
         Mr.  Bourne is Director and Vice  Chairman of the Board of Directors of
         APF. Mr. Bourne  served as President of APF from 1994 through  February
         1999. He also served as Treasurer  from  February  1999 through  August
         1999 and from May 1994 through December 1994. He also served in various
         executive  positions  with the  Advisor  prior to its  merger  with APF
         including,  President  from 1994 through  September  1997, and Director
         from 1994  through  August 1999.  Mr.  Bourne  serves as President  and
         Treasurer of CNL Financial  Group,  Inc.  (formerly  CNL Group,  Inc.);
         Director,  Vice Chairman of the Board and President of CNL  Hospitality
         Properties,  Inc., a public,  unlisted real estate investment trust; as
         well as, Director and President of CNL Hospitality  Corp., its advisor.
         In  addition,  Mr.  Bourne  serves as  Director  and  President  of CNL
         Retirement Properties,  Inc., a public, unlisted real estate investment
         trust;  as well  as, a  Director  and  President  of its  advisor,  CNL
         Retirement  Corp.  Mr. Bourne also serves as a Director of CNL Bank. He
         has served as a Director  since 1992,  Vice Chairman of the Board since
         February 1996, Secretary and Treasurer from February 1996 through 1997,
         and President  from July 1992 through  February 1996, of Commercial Net
         Lease Realty, Inc., a public real estate investment trust listed on the
         New York Stock Exchange. Mr. Bourne also serves as Director,  President
         and Treasurer  for various  affiliates  of CNL  Financial  Group,  Inc.
         including,  CNL  Investment  Company,  CNL  Securities  Corp.  and  CNL
         Institutional  Advisors,  Inc.,  a  registered  investment  advisor for
         pension  plans.  Mr.  Bourne  began his  career as a  certified  public
         accountant employed by Coopers & Lybrand, Certified Public Accountants,
         from 1971 through  1978,  where he attained the position of Tax Manager
         in 1975.  Mr. Bourne  graduated  from Florida State  University in 1970
         where he received a B.A. in Accounting, with honors.

         Curtis B.  McWilliams,  age 45. Mr.  McWilliams  has served as Co-Chief
         Executive  Officer of APF since December 2000 and previously  served as
         Chief  Executive  Officer from  September  1999 through  December 2000.
         Prior to the  acquisition  of the  Advisor,  Mr.  McWilliams  served as
         President of APF from February 1999 until  September  1999.  From April
         1997 to February  1999, he served as Executive  Vice  President of APF.
         Mr. McWilliams  joined CNL Financial Group,  Inc.  (formerly CNL Group,
         Inc.) in April 1997 and served as an  Executive  Vice  President  until
         September 1999. In addition,  Mr. McWilliams served as President of the
         Advisor  and CNL  Financial  Services,  Inc.  from April 1997 until the
         acquisition of such entities by APF in September  1999.  From September
         1983 through March 1997, Mr. McWilliams was employed by Merrill Lynch &
         Co.  The  majority  of his  career at  Merrill  Lynch & Co.  was in the
         Investment Banking division where he served as a Managing Director. Mr.
         McWilliams  received a B.S.E.  in Chemical  Engineering  from Princeton
         University in 1977 and a Master of Business  Administration degree with
         a concentration in finance from the University of Chicago in 1983.

         John T. Walker, age 42. Mr. Walker has served as President of APF since
         September  1999 and as Chief  Operating  Officer since March 1995.  Mr.
         Walker  also  served  as a  board  member  of CNL  Restaurant  Property
         Services,  Inc., a subsidiary of APF from December 1999 until  December
         2000.  Previously,  he served as Executive  Vice  President of APF from
         January  1996 to  September  1999.  Mr.  Walker  joined the  Advisor in
         September  1994, as Senior Vice President  responsible for Research and
         Development.  He served as the Chief  Operating  Officer of the Advisor
         from April 1995 until  September  1999 and as Executive  Vice President
         from January 1996 until  September  1999,  at which time it merged with
         APF.  Mr.  Walker  also  served  as  Executive  Vice  President  of CNL
         Hospitality  Properties,  Inc. and CNL Hospitality Corp.  (formerly CNL
         Hospitality Advisors, Inc.) from 1997 to October 1998. From May 1992 to
         May  1994,   he  was   Executive   Vice   President   for  Finance  and
         Administration  and Chief Financial  Officer of Z Music,  Inc., a cable
         television   network  which  was   subsequently   acquired  by  Gaylord
         Entertainment,  where he was  responsible  for  overall  financial  and
         administrative management and planning. From January 1990 through April
         1992,  Mr.  Walker was Chief  Financial  Officer  of the First  Baptist
         Church in Orlando,  Florida.  From April 1984 through December 1989, he
         was a partner in the  accounting  firm of  Chastang,  Ferrell & Walker,
         P.A.,  where he was the  partner  in  charge  of audit  and  consulting
         services,   and  from   1981  to  1984,   Mr.   Walker   was  a  Senior
         Consultant/Audit Senior at Price Waterhouse.  Mr. Walker is a cum laude
         graduate of Wake Forest University with a Bachelor of Science degree in
         Accountancy and is a certified public accountant.

         Steven  D.  Shackelford,  age  37.  Mr.  Shackelford  was  promoted  to
         Executive  Vice  President and Chief  Financial  Officer of APF in July
         2000. He served as Senior Vice President and Chief Financial Officer of
         APF since January 1997.  Mr.  Shackelford  also served as Secretary and
         Treasurer  of APF  since  September  1999.  He  also  served  as  Chief
         Financial Officer of the Advisor from September 1996 to September 1999.
         From March 1995 to July 1996, Mr.  Shackelford  was a senior manager in
         the national  office of Price  Waterhouse LLP where he was  responsible
         for  advising  foreign  clients  seeking to raise  capital and a public
         listing in the United States.  From August 1992 to March 1995, he was a
         manager  in the  Paris,  France  office  of Price  Waterhouse,  serving
         several multi-national  clients. Mr. Shackelford was an audit staff and
         senior  from  1986 to 1992 in the  Orlando,  Florida  office  of  Price
         Waterhouse.  Mr.  Shackelford  received  a Bachelor  of Arts  degree in
         Accounting, with honors, and a Master of Business Administration degree
         from Florida State University and is a certified public accountant.




<PAGE>


Item 11. Executive Compensation

         Other than as  described in Item 13, the  Partnership  has not paid and
does not intend to pay any executive compensation to the General Partners or any
of their affiliates.  There are no compensatory plans or arrangements  regarding
termination of employment or change of control.


Item 12.  Security Ownership of Certain Beneficial Owners and Management

         As of March 15,  2001,  no person was known to the  Registrant  to be a
beneficial owner of more than five percent of the Units.

         The following  table sets forth,  as of March 15, 2001,  the beneficial
ownership interests of the General Partners in the Registrant.
<TABLE>
<CAPTION>
<S> <C>
                    Title of Class                           Name of Partner                 Percent of Class
                    --------------                           ---------------                 ----------------

           General Partnership Interests                James M. Seneff, Jr.                           45%
                                                        Robert A. Bourne                               45%
                                                        CNL Realty Corporation                         10%
                                                                                                   --------
                                                                                                      100%
                                                                                                   ========
</TABLE>

         Neither the General  Partners,  nor any of their  affiliates,  owns any
interest in the Registrant, except as noted above.



<PAGE>


Item 13.  Certain Relationships and Related Transactions

         The  table  below   summarizes  the  types,   recipients,   methods  of
computation and amounts of compensation,  fees and distributions paid or payable
by the  Partnership  to the General  Partners and their  affiliates for the year
ended  December 31, 2000,  exclusive of any  distributions  to which the General
Partners or their  affiliates  may be entitled by reason of their  purchase  and
ownership of Units.
<TABLE>
<CAPTION>
<S> <C>
                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
          and Recipient                        Method of Computation                  Ended December 31, 2000
----------------------------------     --------------------------------------      ------------------------------

Reimbursement  to affiliates  for      Operating  expenses are reimbursed at       Accounting and
operating expenses                     the  lower of cost or 90  percent  of       administrative services:
                                       the   prevailing    rate   at   which       $97,772
                                       comparable  services  could have been
                                       obtained   in  the  same   geographic
                                       area.   Affiliates   of  the  General
                                       Partners  from  time  to  time  incur
                                       certain operating  expenses on behalf
                                       of  the  Partnership  for  which  the
                                       Partnership       reimburses      the
                                       affiliates without interest.

Annual, subordinated                   One  percent  of  the  sum  of  gross       $-0-
management fee to affiliates           operating  revenues  from  Properties
                                       wholly owned by the Partnership plus
                                       the Partnership's allocable share of
                                       gross revenues of joint ventures in
                                       which    the    Partnership    is   a
                                       co-venturer and the Property owned
                                       with      an       affiliate       as
                                       tenants-in-common, subordinated to
                                       certain minimum returns to the
                                       Limited Partners. The management
                                       fee will not exceed competitive fees
                                       for comparable  services.  Due to the
                                       fact    that     these    fees    are
                                       noncumulative, if the Limited
                                       Partners have not received  their 10%
                                       Preferred Return in any particular
                                       year, no management  fees will be due
                                       or payable for such year.




<PAGE>



                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         and Recipient                         Method of Computation                  Ended December 31, 2000
---------------------------------      --------------------------------------      ------------------------------

Deferred,    subordinated   real       A deferred,  subordinated real estate       $-0-
estate  disposition  fee payable       disposition  fee,  payable  upon sale
to affiliates                          of  one  or  more  Properties,  in an
                                       amount  equal  to the  lesser  of (i)
                                       one-half of a competitive real
                                       estate commission, or (ii) three
                                       percent of the sales price of such
                                       Property or Properties. Payment of
                                       such  fee   shall  be  made  only  if
                                       affiliates of the General Partners
                                       provide a substantial amount of
                                       services in connection with the sale
                                       of a Property or Properties and
                                       shall be subordinated to certain
                                       minimum returns to the Limited
                                       Partners.  However,  if the net sales
                                       proceeds   are    reinvested   in   a
                                       replacement Property, no such real
                                       estate disposition fee will be
                                       incurred until such replacement
                                       Property   is  sold  and  the  net  sales
                                       proceeds are distributed.

General   Partners'    deferred,       A deferred,  subordinated share equal       $-0-
subordinated       share      of       to   one   percent   of   Partnership
Partnership net cash flow              distributions   of  net  cash   flow,
                                       subordinated to certain minimum
                                       returns to the Limited Partners.

General   Partners'    deferred,       A deferred,  subordinated share equal       $-0-
subordinated       share      of       to  five   percent   of   Partnership
Partnership  net sales  proceeds       distributions   of  such  net   sales
from  a  sale  or  sales  not in       proceeds,   subordinated  to  certain
liquidation of the Partnership         minimum   returns   to  the   Limited
                                       Partners.


<PAGE>



                                                                                          Amount Incurred
      Type of Compensation                                                                 For the Year
         And Recipient                         Method of Computation                  Ended December 31, 2000
---------------------------------      --------------------------------------      ------------------------------

General   Partners'   share   of       Distributions  of net sales  proceeds       $-0-
Partnership  net sales  proceeds       from   a    sale    or    sales    of
from  a   sale   or   sales   in       substantially      all     of     the
liquidation of the Partnership         Partnership's    assets    will    be
                                       distributed in the following order
                                       or priority: (i) first, to pay all
                                       debts   and    liabilities   of   the
                                       Partnership    and    to    establish
                                       reserves; (ii) second, to Partners
                                       with positive capital account
                                       balances, determined after the
                                       allocation  of net income,  net loss,
                                       gain and loss, in proportion to such
                                       balances, up to amounts sufficient
                                       to reduce such balances to zero; and
                                       (iii) thereafter, 95% to the Limited
                                       Partners and 5% to the General Partners.

</TABLE>

In addition,  during 2000,  the  Partnership  and CNL Income Fund XIV,  Ltd., an
affiliate of the General Partners, as tenants-in-common, acquired an interest in
a  Baker's  Square  Property  from CNL BB Corp.,  an  affiliate  of the  General
Partners,  for a purchase  price of  $1,112,500.  CNL BB Corp. had purchased and
temporarily  held title to this Property in order to facilitate the  acquisition
of the Property by the  Partnership.  The purchase price paid by the Partnership
represents the costs incurred by CNL BB Corp. to acquire and carry the Property,
including closing costs.


<PAGE>


                                     PART IV


Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)      The following documents are filed as part of this report.

         1.   Financial Statements

                  Report of Independent Certified Public Accountants

                  Balance Sheets at December 31, 2000 and 1999

                  Statements of Income for the years ended December 31, 2000,
                  1999, and 1998

                  Statements of Partners' Capital for the years ended December
                  31, 2000, 1999, and 1998

                  Statements of Cash Flows for the years ended December 31,2000,
                  1999, and 1998

                  Notes to Financial Statements

         2.   Financial Statement Schedule

                  Schedule II -Valuation and  Qualifying  Accounts for the years
                  ended December 31, 2000, 1999 and 1998

                  Schedule III - Real Estate and Accumulated Depreciation at
                  December 31, 2000

                  Notes to Schedule III - Real Estate and Accumulated
                  Depreciation at December 31, 2000

                  All other Schedules are omitted as the required information is
                  inapplicable  or is presented in the  financial  statements or
                  notes thereto.

         3.   Exhibits

                  3.1      Certificate of Limited Partnership of CNL Income Fund
                           VI, Ltd.  (Included  as Exhibit  3.3 to  Registration
                           Statement No. 33-23892 on Form S-11 and  incorporated
                           herein by reference.)

                  4.1      Certificate of Limited Partnership of CNL Income Fund
                           VI, Ltd.  (Included  as Exhibit  4.2 to  Registration
                           Statement No. 33-23892 on Form S-11 and  incorporated
                           herein by reference.)

                  4.2      Agreement and  Certificate of Limited  Partnership of
                           CNL Income Fund VI, Ltd.  (Included as Exhibit 4.2 to
                           Form 10-K  filed  with the  Securities  and  Exchange
                           Commission on April 1, 1996, and incorporated  herein
                           by reference.)

                  10.1     Management  Agreement  (Included  as Exhibit  10.1 to
                           Form 10-K  filed  with the  Securities  and  Exchange
                           Commission on March 31, 1994, and incorporated herein
                           by reference.)

                  10.2     Assignment   of   Management   Agreement   from   CNL
                           Investment Company to CNL Income Fund Advisors,  Inc.
                           (Included as Exhibit 10.2 to Form 10-K filed with the
                           Securities and Exchange Commission on March 30, 1995,
                           and incorporated herein by reference.)



                  10.3     Assignment  of Management  Agreement  from CNL Income
                           Fund  Advisors,  Inc.  to  CNL  Fund  Advisors,  Inc.
                           (Included as Exhibit 10.3 to Form 10-K filed with the
                           Securities and Exchange  Commission on April 1, 1996,
                           and incorporated herein by reference.)

         (b)      The Registrant  filed no reports on Form 8-K during the period
                  October 1, 2000 through  December 31, 2000.

         (c)      Not Applicable.

         (d)      Other Financial Information

                  The   Partnership  is  required  to  file  audited   financial
                  information of two of its tenants  (Golden Corral  Corporation
                  and  IHOP  Properties,  Inc.) as a  result  of  these  tenants
                  leasing more than 20 percent of the Partnership's total assets
                  for  the  year  ended   December  31,  2000.   Golden   Corral
                  Corporation  is a  privately-held  company  and its  financial
                  information is not available to the  Partnership to include in
                  this  filing.   The   Partnership   will  file  the  financial
                  information for Golden Corral Corporation and IHOP Properties,
                  Inc. under cover of a Form 10-K/A as soon as it is available.



<PAGE>






                                   SIGNATURES


         Pursuant to the  requirements  of Section 13 or 15(d) 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,  on the 28th, day of
March, 2001.

                           CNL INCOME FUND VI, LTD.

                           By:      CNL REALTY CORPORATION
                                    General Partner

                                    /s/ Robert A. Bourne
                                    -----------------------------------
                                    ROBERT A. BOURNE, President


                           By:      ROBERT A. BOURNE
                                    General Partner

                                    /s/ Robert A. Bourne
                                    -----------------------------------
                                    ROBERT A. BOURNE


                           By:      JAMES M. SENEFF, JR.
                                    General Partner

                                    /s/ James M. Seneff, Jr.
                                    -----------------------------------
                                    JAMES M. SENEFF, JR.




<PAGE>




         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C>
        Signature                                  Title                                  Date



/s/ Robert A. Bourne                     President,   Treasurer   and   Director            March 28, 2001
------------------------------------
Robert A. Bourne                         (Principal   Financial  and  Accounting
                                         Officer)

/s/ James M. Seneff, Jr.                 Chief  Executive  Officer and  Director            March 28, 2001
------------------------------------
James M. Seneff, Jr.                     (Principal Executive Officer)


</TABLE>

<PAGE>



                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                  Years Ended December 31, 2000, 1999, and 1998
<TABLE>
<CAPTION>
<S> <C>

                                                     Additions                                   Deductions
                                  -------------------------------------------------    --------------------------------
                                                                                                           Collected
                                                                                                           or Deter-
                                   Balance at       Charged to       Charged to           Deemed           mined to      Balance
                                    Beginning       Costs and           Other           Uncollec-           be Col-      at End
  Year          Description          of Year         Expenses         Accounts            tible            lectible      of Year
----------    -----------------   --------------  ---------------  ----------------    -------------     -------------- ------------

  1998        Allowance for
                  doubtful
                  accounts (a)     $  390,655         $               $   46,023 (b)    $  12,264 (c)     $   61,657   $ 362,757
                                                          --
                                 ==============  ===============  ================    =============     ==============  ============

  1999        Allowance for
                  doubtful
                  accounts (a)      $ 362,757        $    --          $   29,049 (b)       $   --          $ 103,59    $ 288,215
                                 ==============  ===============  ================    =============     ==============  ============

  2000        Allowance for
                  doubtful
                  accounts (a)      $ 288,215        $    --          $   37,003 (b)       $   --         $  83,631    $ 241,587
                                  ==============  ===============  ================    =============     ==============  ===========


</TABLE>

(a)    Deducted from receivables and accrued rental income on the balance sheet.

(b)    Reduction of rental and other income.

(c)    Amounts written off as uncollectible.


<PAGE>

                            CNL INCOME FUND VI, LTD.
                        (A Florida Limited Partnership)

      SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

                               December 31, 2000


<TABLE>
<CAPTION>
<S> <C>
                                                                      Costs Capitalized
                                                                         Subsequent to
                                                      Initial Cost       Acquisition
                                           ------------------------  -------------------
                             Encum-                    Buildings and  Improve-   Carrying
                            brances           Land     Improvements     ments     Costs
                           -----------     -----------  -----------  ----------  -------
Properties the Partnership
   has Invested in Under
   Operating Leases:

    Bertucci's:
      Marietta, Georgia        -             $399,885     $712,762           -        -

    Church's Fried Chicken
      Restaurant:
          Orlando,Florida      -              177,440      270,985           -        -

    Golden Corral Family
      Steakhouse Restaurants:
          Albuquerque, New Mexi-              717,708    1,018,823           -        -
          Amarillo, Texas      -              773,627      908,171           -        -
          Lawton, Oklahoma     -              559,095      838,642           -        -
          El Paso, Texas       -              670,916            -     837,317        -

    Hardee's Restaurants:
      Greensburg, Indiana      -              222,559            -     640,529        -
      Springfield, Tennessee   -              203,159      413,221           -        -

    IHOP:
      Elgin, Illinois          -              426,831            -           -        -
      Manassas, Virginia       -              366,992      759,788           -        -

    Jack in the Box Restaurant:
      San Antonio, Texas       -              272,300            -           -        -

    KFC Restaurants:
      Caro, Michigan           -              150,804            -     373,558        -
      Gainesville, Florida     -              321,789      287,429           -        -

    Popeyes Famous Fried
      Chicken Restaurants:
          Gainesville, Florida -               83,542      208,564     192,227        -

    Shoney's Restaurants:
      Nashville, Tennessee     -              320,540      531,507           -        -

    Captain D's
      Chester, Pennsylvania    -               98,259      372,536           -        -

    Waffle House Restaurants:
      Clearwater Florida       -              130,499      268,580           -        -
      Roanoke, Virginia        -              119,533      236,219           -        -
      Atlantic Beach, Florida  -              141,627      263,021           -        -

    Other:
      Hermitage, Tennessee     -              391,157            -     720,026        -
                                           -----------  -----------  ----------  -------

                                           $6,719,502   $7,090,248   $3,149,366       -
                                           ===========  ===========  ==========  =======

 Property of Joint Venture in Which
    the   Partnership   has  a  36%
    Interest  and has  Invested  in
    Under an Operating Lease:

    Darryl's Restaurant:
      Greensboro, North Carolin-             $261,013            -           -        -
                                           ===========  ===========  ==========  =======

 Property of Joint Venture in Which
    the   Partnership  has  a  3.9%
    Interest  and has  Invested  in
    Under an Operating Lease:

    KFC Restaurant:
      Auburn, Massachusetts    -             $484,362            -           -        -
                                           ===========  ===========  ==========  =======

 Property of Joint Venture in Which
    the  Partnership  has a  14.46%
    Interest  and has  Invested  in
    Under an Operating Lease:

    Burger King Restaurant:
      Asheville, North Carolina-             $438,695     $450,432           -        -
                                           ===========  ===========  ==========  =======

 Property  in  Which  the  Partner-
    ship  has  a  18%  Interest  as
    Tenants-in-Common    and    has
    Invested in Under an  Operating
    Lease:

    Golden Corral Family
      Steakhouse Restaurant:
          Clinton, North Caroli-a            $138,382     $676,588           -        -
                                           ===========  ===========  ==========  =======

 Property  in  Which  the  Partner-
    ship has a 23.04%  Interest  as
    Tenants-in-Common        andhas
    Invested in Under an  Operating
    Lease:

    Chevy's Fresh Mex Restaurant:
      Vancouver, Washington    -             $875,659   $1,389,366           -        -
                                           ===========  ===========  ==========  =======

 Property in Which  Partnership has
    a    46.20%     Interest     as
    Tenants-in-Common  has Invested
    in Under an Operating Lease:

    IHOP Restaurant:
      Memphis, Tennessee       -             $678,890     $825,076           -        -
                                           ===========  ===========  ==========  =======

 Property of Joint Venture in Which
    the   Partnership   has  a  50%
    Interest  and has  Invested  in
    Under an Operating Lease:

    5 & Diner Restaurant:
      Melbourne, Florida(h)    -             $438,972     $639,141           -        -
                                           ===========  ===========  ==========  =======

 Property in Which the  Partnership
    has   a   85%    Interest    as
    Tenants-in-Common    and    has
    Invested in Under an  Operating
    Lease:

    Bennigan's Restaurant:
      Fort Myers, Florida      -             $638,026            -           -        -
                                           ===========  ===========  ==========  =======

 Property of Joint Venture in Which
    the  Partnership  has a  64.29%
    Interest  and has  Invested  in
    Under an Operating Lease:

    IHOP Restaurant:
      Warren,nMichiganan       -             $507,965     $889,080           -        -
                                           ===========  ===========  ==========  =======


 Property in Which the  Partnership
    has a 80% as  Tenants-in-Common
    Interest  and has  Invested  in
    Under an Operating Lease:

    IHOP Restaurant:
      Boytown,,Texasigan       -             $495,847     $799,469           -        -
                                           ===========  ===========  ==========  =======

 Property in Which the  Partnership
    has a 77% as  Tenants-in-Common
    Interest  and has  Invested  in
    Under an Operating Lease:

    IHOP Restaurant:
      RoundrRock,iTexasn       -             $685,578     $706,459           -        -
                                           ===========  ===========  ==========  =======

 Property in Which the  Partnership
    has a 75% as  Tenants-in-Common
    Interest  and has  Invested  in
    Under an Operating Lease:

    IHOP Restaurant:
      Dublin,nCalifornia       -             $670,899     $879,237           -        -
                                           ===========  ===========  ==========  =======

 Property in Which the  Partnership
    has a 74% as  Tenants-in-Common
    Interest  and has  Invested  in
    Under an Operating Lease:

    Baker's Square
      Niles, Illinois               -        $664,944     $838,434           -        -
                                           ===========  ===========  ==========  =======




Properties the Partnership
   has Invested in Under
   Direct Financing Leases:

    Denny's Restaurant:
      Cheyenne, Wyoming        -             $162,209     $648,839           -        -
      Broken Arrow, Oklahoma   -              164,640      559,972           -        -

    IHOP:
      Elgin, Illinois          -               -         1,057,282           -        -

    Hardee's Restaurant:
      Waynesburg, Ohio         -              136,242      441,299           -        -

    Jack in the Box Restaurant:
      San Antonio, Texas       -                    -      420,568           -        -

                                           -----------  -----------  ----------  -------

                               -             $463,091   $3,127,960           -        -
                                           ===========  ===========  ==========  =======

Property of Joint Venture in
   Which the Partnership has a
   3.9% Interest and has
   Invested in Under a Direct
   Financing Lease:

    KFC Restaurant:
      Auburn, Massachusetts    -                    -            -    $434,947        -
                                           ===========  ===========  ==========  =======

Property of Joint Venture
   in Which the Partnership
   has a 36% Interest and
   has Invested in Under
   a Direct Financing Lease

    Darryl's Restaurant:
      Greensboro, North Carolin-                    -            -    $521,400        -
                                           ===========  ===========  ==========  =======

 Property in Which the  Partnerhsip
    has  a   34.74%   Interest   as
    Tenants-in-Common    and    has
    Invested   in  Under  a  Direct
    Financing Lease:

    IHOP Restaurant:
      Overland Park, Kansas    -             $335,374   $1,273,134           -        -
                                           ===========  ===========  ==========  =======

 Property in Which the  Partnership
    has   a   85%    Interest    as
    Tenants-in-Common    and    has
    Invested   in  Under  a  Direct
    Financing Lease:

    Bennigan's Restaurant:
      Fort Myers, Florida      -                    -     $831,741           -        -
                                           ===========  ===========  ==========  =======

Property of Joint Venture
   in Which the Partnership
   has a 50% Interest
   and has Invested in Under
   a Direct Financing Lease:

    5 & Diner Restaurant:
      Melbourne, Florida       -                    -      639,141           -        -
                                           ===========  ===========  ==========  =======



                  Gross Amount at Which                                          Life on Which
                Carried at Close of Period (c)                                   Depreciation in
------------------------------------------                  Date                 Latest Income
                Buildings and                 Accumulated   of Con-    Date      Statement is
    Land        Improvements     Total        Depreciation  struction Acquired     Computed
-------------   -----------    -----------    -----------   ------    -------    ------------





    $399,885      $712,762     $1,112,647        $91,429    1993      02/97          (b)



     177,440       270,985        448,425         96,441    1985      04/90          (b)



     717,708     1,018,823      1,736,531        374,132    1989      12/89          (b)
     773,627       908,171      1,681,798        333,494    1989      12/89          (b)
     559,095       838,642      1,397,737        307,962    1989      12/89          (b)
     670,916       837,317      1,508,233        290,805    1990      04/90          (b)


     222,559       640,529        863,088        209,461    1989      07/89          (b)
     203,159       413,221        616,380        139,325    1990      11/90          (b)


     426,831            (f)       426,831             (d)   1997      12/97          (d)
     366,992       759,788      1,126,780         76,115    1986      12/97          (b)


     272,300            (f)       272,300             (d)   1990      08/90          (d)


     150,804       373,558        524,362        133,859    1990      03/90          (b)
     321,789       287,429        609,218         97,411    1985      11/90          (b)



      83,542       400,791        484,333        138,410    1990      04/90          (b)


     320,540       531,507        852,047        200,057    1988      09/89          (b)


      98,259       372,536        470,795          4,138    1991      01/91          (h)


     130,499       268,580        399,079         98,210    1988      01/90          (b)
     119,533       236,219        355,752         86,376    1987      01/90          (b)
     141,627       263,021        404,648         95,888    1986      01/90          (b)


     391,157       720,027      1,111,184        248,125    1990      02/90          (b)
-------------   -----------    -----------    -----------

  $6,719,502    $10,239,615    $16,959,117    $3,162,184
=============   ===========    ===========    ===========








    $261,013            (f)      $261,013             (d)    1974     06/97          (d)
=============                  ===========








    $484,362            (f)      $484,362             (d)   1989      01/90          (d)
=============                  ===========








    $438,695      $450,432       $889,127       $146,977    1986      03/91          (b)
=============   ===========    ===========    ===========









    $138,382      $676,588       $814,970       $111,380    1996      01/96          (b)
=============   ===========    ===========    ===========








    $875,659    $1,389,366     $2,265,025       $139,061    1994      12/97          (b)
=============   ===========    ===========    ===========








    $678,890      $825,076     $1,503,966        $81,648      -       01/98          (b)
=============   ===========    ===========    ===========








    $438,972      $639,141     $1,078,113        $16,220    1998      04/98          (i)
=============   ===========    ===========    ===========








    $638,026            (f)      $638,026             (d)     -       06/98          (d)
=============                  ===========








    $507,965      $889,080     $1,397,045        $68,040      -       09/98          (b)
=============   ===========    ===========    ===========









    $495,847      $799,469     $1,295,316        $31,967    1998      10/99          (b)
=============   ===========    ===========    ===========








    $685,578      $706,459     $1,392,037        $27,796    1998      10/99          (b)
=============   ===========    ===========    ===========








    $670,899      $879,237     $1,550,136        $33,276    1998      11/99          (b)
=============   ===========    ===========    ===========








    $664,944      $838,434     $1,503,378        $27,947    2000      01/00          (b)
=============   ===========    ===========    ===========









          (f)           (f)            (f)            (e)   1980      12/89          (e)
          (f)           (f)            (f)            (e)   1982      08/95          (e)


           -            (f)            (f)            (e)   1997      12/97          (e)


          (f)           (f)            (f)            (e)   1990      11/90          (e)


           -            (f)            (f)            (d)   1990      08/90          (d)

-------------

           -
=============








           -            (f)            (f)            (d)   1989      01/90          (d)
=============








           -            (f)            (f)            (d)   1974      06/97          (d)
=============








    $335,374    $1,273,134             (f)            (d)     -       01/98          (d)
=============   ===========








           -            (f)            (f)            (d)     -       06/98          (d)
=============








           -            (f)            (f)            (e)   1998      04/98          (e)
=============


</TABLE>



                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2000


(a)      Transactions in real estate and accumulated  depreciation  during 2000,
         1999, and 1998, are summarized as follows:

<TABLE>
<CAPTION>

<S> <C>
                                                                                                    Accumulated
                                                                           Cost                      Depreciation
                                                                   ----------------------        ---------------------

          Properties the Partnership has invested in Under
            Operating leases:

              Balance, December 31, 1997                                $     24,390,423              $     3,327,334
              Dispositions                                                    (2,244,493 )                   (198,206 )
              Depreciation expense                                                    --                      456,958
                                                                   ----------------------        ---------------------

              Balance, December 31, 1998                                      22,145,930                    3,586,086
              Dispositions                                                    (3,818,459 )                   (738,677 )
              Depreciation                                                            --                      410,257
                                                                   ----------------------        ---------------------

              Balance, December 31, 1999                                      18,327,471                    3,257,666
              Dispositions                                                    (1,839,149 )                   (462,810 )
              Reclassified from capital lease (h)                                470,795                           --
              Depreciation                                                            --                      367,328
                                                                   ----------------------        ---------------------

              Balance, December 31, 2000                                $     16,959,117              $     3,162,184
                                                                   ======================        =====================

          Property of Joint Venture in Which the  Partnership
               has a 36% Interest and has Invested in Under an
               Operating Lease:

              Balance, December 31, 1997                                  $      261,013                  $        --
              Depreciation expense (d)                                                --                           --
                                                                   ----------------------        ---------------------

              Balance, December 31, 1998                                         261,013                           --
              Depreciation expense (d)                                                --                           --
                                                                   ----------------------        ---------------------

              Balance, December 31, 1999                                         261,013                           --
              Depreciation expense (d)                                                --                           --
                                                                   ----------------------        ---------------------

              Balance, December 31, 2000                                  $      261,013                  $        --
                                                                   ======================        =====================
</TABLE>



<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 2000


<TABLE>
<CAPTION>
<S> <C>
                                                                                                   Accumulated
                                                                         Cost                     Depreciation
                                                                 ---------------------         --------------------

       Properties of Joint Venture in Which the  Partnership
          has a 3.9% Interest and has Invested in Under an
          Operating Lease:

            Balance, December 31, 1997                                  $     484,362                    $      --
            Depreciation expense (d)                                               --                           --
                                                                 ---------------------         --------------------

            Balance, December 31, 1998                                        484,362                           --
            Depreciation expense (d)                                               --                           --
                                                                 ---------------------         --------------------

            Balance, December 31, 1999                                        484,362                           --
            Depreciation expense (d)                                               --                           --
                                                                 ---------------------         --------------------

            Balance, December 31, 2000                                  $     484,362                    $      --
                                                                 =====================         ====================

       Properties  of  Joint  Venture  in  Which  the  Partnership
          has a 14.46% Interest and has Invested in Under an
          Operating Lease:

            Balance, December 31, 1997                                  $     889,127                 $    101,933
            Depreciation expense                                                   --                       15,015
                                                                 ---------------------         --------------------

            Balance, December 31, 1998                                        889,127                      116,948
            Depreciation expense                                                   --                       15,014
                                                                 ---------------------         --------------------

            Balance, December 31, 1999                                        889,127                      131,962
            Depreciation expense                                                   --                       15,015
                                                                 ---------------------         --------------------

            Balance, December 31, 2000                                  $     889,127                 $    146,977
                                                                 =====================         ====================



</TABLE>

<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 2000

<TABLE>
<CAPTION>
<S> <C>
                                                                                                  Accumulated
                                                                         Cost                    Depreciation
                                                                 ---------------------         ------------------ ---

       Properties  of  Joint  Venture  in  Which  the  Partnership
          has a 64.29% Interest and has Invested in Under an
          Operating Lease:

            Balance, December 31, 1997                                    $        --                 $       --
            Acquisitions                                                    1,397,045                         --
            Depreciation expense                                                   --                      8,769
                                                                ----------------------        -------------------

            Balance, December 31, 1998                                      1,397,045                      8,769
            Depreciation expense                                                   --                     29,636
                                                                ----------------------        -------------------

            Balance, December 31, 1999                                      1,397,045                     38,405
            Depreciation expense                                                   --                     29,635
                                                                ----------------------        -------------------

            Balance, December 31, 2000                                $     1,397,045              $      68,040
                                                                ======================        ===================

       Properties   in  Which   the   Partnership   has  an  18%
          Interest   as Tenants-in-Common and has Invested in Under
          an Operating Lease:

            Balance, December 31, 1997                                 $      814,970              $      43,595
            Depreciation expense                                                   --                     22,679
                                                                ----------------------        -------------------

            Balance, December 31, 1998                                        814,970                     66,274
            Depreciation expense                                                   --                     22,553
                                                                ----------------------        -------------------

            Balance, December 31, 1999                                        814,970                     88,827
            Depreciation expense                                                   --                     22,553
                                                                ----------------------        -------------------

            Balance, December 31, 1999                                 $      814,970              $     111,380
                                                                ======================        ===================


</TABLE>

<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 2000

<TABLE>
<CAPTION>
<S> <C>
                                                                                                 Accumulated
                                                                       Cost                     Depreciation
                                                               ----------------------        --------------------

      Properties   in  Which  the   Partnership   has  a  23.04%
         Interest   as Tenants-in-Common and has Invested in Under
         an Operating Lease:

           Balance, December 31, 1997                                $     2,265,025                $        124
           Depreciation expense                                                   --                      46,313
                                                               ----------------------        --------------------

           Balance, December 31, 1998                                      2,265,025                      46,437
           Depreciation expense                                                   --                      46,312
                                                               ----------------------        --------------------

           Balance, December 31, 1999                                      2,265,025                      92,749
           Depreciation expense                                                   --                      46,312
                                                               ----------------------        --------------------

           Balance, December 31, 2000                                $     2,265,025              $      139,061
                                                               ======================        ====================

      Property  in   Which   the   Partnership   has  a   46.20%
         Interest as Tenants-in-Common and has Invested in Under
         an Operating Lease:

           Balance, December 31, 1997                                    $        --                 $        --
           Acquisition                                                     1,503,966                          --
           Depreciation expense                                                   --                      26,642
                                                               ----------------------        --------------------

           Balance, December 31, 1998                                      1,503,966                      26,642
           Depreciation expense                                                   --                      27,503
                                                               ----------------------        --------------------

           Balance, December 31, 1999                                      1,503,966                      54,145
           Depreciation expense                                                   --                      27,503
                                                               ----------------------        --------------------

           Balance, December 31, 2000                                $     1,503,966               $      81,648
                                                               ======================        ====================


</TABLE>

<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 2000
<TABLE>
<CAPTION>
<S> <C>

                                                                                                 Accumulated
                                                                       Cost                     Depreciation
                                                               ----------------------        --------------------

      Property of Joint Venture in Which the  Partnership has
         a 50% Interest and has Invested in Under an Operating
         Lease:

           Balance, December 31, 1997                                    $        --                 $        --
           Acquisition                                                     1,042,865                          --
           Depreciation expense                                                   --                         937
                                                               ----------------------        --------------------

           Balance, December 31, 1998                                      1,042,865                         937
           Reclassified to capital lease (g)                                (603,893 )                      (937 )
           Depreciation expense                                                   --                          --
                                                               ----------------------        --------------------

           Balance, December 31, 1999                                        438,972                          --
           Reclassified to capital lease (i)                                 639,141                          --
           Depreciation expense                                                   --                      16,220
                                                               ----------------------        --------------------

           Balance, December 31, 2000                                $     1,078,113               $      16,220
                                                               ======================        ====================

      Property in Which the Partnership has a 85% Interest as
         Tenants-in-Common and has Invested in Under an Operating
         Lease:

           Balance, December 31, 1997                                    $        --                 $        --
           Acquisition                                                       638,026                          --
           Depreciation expense                                                   --                          --
                                                               ----------------------        --------------------

           Balance, December 31, 1998                                        638,026                          --
           Depreciation expense (d)                                               --                          --
                                                               ----------------------        --------------------

           Balance, December 31, 1999                                        638,026                          --
           Depreciation expense (d)                                               --                          --
                                                               ----------------------        --------------------

           Balance, December 31, 2000                                 $      638,026                 $        --
                                                               ======================        ====================


</TABLE>

<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 2000
<TABLE>
<CAPTION>
<S> <C>

                                                                                                 Accumulated
                                                                       Cost                     Depreciation
                                                               ----------------------        --------------------

      Property of Joint Venture in Which the  Partnership  has
         a 80% Interest as Tenants-in-Common and has Invested in
         Under an Operating Lease:

           Balance, December 31, 1998                                    $        --                 $        --
           Acquisition                                                     1,295,316                          --
           Depreciation expense                                                   --                       5,318
                                                               ----------------------        --------------------

           Balance, December 31, 1999                                      1,295,316                       5,318
           Depreciation expense                                                   --                      26,649
                                                               ----------------------        --------------------

           Balance, December 31, 2000                                $     1,295,316               $      31,967
                                                               ======================        ====================

      Property in Which the Partnership has a 77% Interest as
         Tenants-in-Common has Invested in Under an Operating Lease:

           Balance, December 31, 1998                                    $        --                 $        --
           Acquisition                                                     1,392,037                          --
           Depreciation expense                                                   --                       4,247
                                                               ----------------------        --------------------

           Balance, December 31, 1999                                      1,392,037                       4,247
           Depreciation expense                                                   --                      23,549
                                                               ----------------------        --------------------

           Balance, December 31, 2000                                $     1,392,037               $      27,796
                                                               ======================        ====================

      Property in Which the Partnership has a 75% Interest as
         Tenants-in-Common has Invested in Under an Operating
         Lease:

           Balance, December 31, 1998                                    $        --                 $        --
           Acquisition                                                     1,550,136                          --
           Depreciation expense                                                   --                       3,968
                                                               ----------------------        --------------------

           Balance, December 31, 1999                                      1,550,136                       3,968
           Depreciation expense                                                   --                      29,308
                                                               ----------------------        --------------------

           Balance, December 31, 2000                                $     1,550,136               $      33,276
                                                               ======================        ====================


</TABLE>

<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 2000

<TABLE>
<CAPTION>
<S> <C>
                                                                                                 Accumulated
                                                                       Cost                     Depreciation
                                                               ----------------------        --------------------

      Property in Which the Partnership has a 74% Interest as
         Tenants-in-Common has Invested in Under an Operating
         Lease:

           Balance, December 31, 1999                                    $        --                 $        --
           Acquisition                                                     1,503,378                          --
           Depreciation expense                                                   --                      27,947
                                                               ----------------------        --------------------

           Balance, December 31, 2000                                $     1,503,378               $      27,947
                                                               ======================        ====================
</TABLE>


(b)      Depreciation  expense is computed for buildings and improvements  based
         upon estimated lives of 30 years.

(c)      As of December 31, 2000, the aggregate cost of the Properties  owned by
         the  Partnership   and  its   consolidated   joint  venture,   and  the
         unconsolidated  joint ventures  (including  the two Properties  held as
         tenants-in-common)  for federal income tax purposes was $19,834,603 and
         $18,239,974,  respectively.  All of the leases are treated as operating
         leases for federal income tax purposes.

(d)      For financial reporting purposes,  the portion of the lease relating to
         the building has been recorded as a direct financing lease. The cost of
         the building has been included in net  investment  in direct  financing
         leases; therefore, depreciation is not applicable.

(e)      For financial reporting  purposes,  the lease for the land and building
         has been recorded as a direct financing lease. The cost of the land and
         building  has been  included  in net  investment  in  direct  financing
         leases; therefore, depreciation is not applicable.

(f)      For  financial  reporting  purposes,  certain  components  of the lease
         relating to land and building have been recorded as a direct  financing
         lease.  Accordingly,  costs relating to these  components of this lease
         are not shown.

(g)      Effective  September 24, 1999,  the lease for this Property was amended
         resulting in the  reclassification of the building portion of the lease
         as a capital lease.

(h)      For  financial  reporting  purposes,  the  undepreciated  cost  of  the
         Property in Chester,  Pennsylvania,  was written down to net realizable
         value due to an impairment in value.  The  Partnership  recognized  the
         impairment  by recording an allowance  for loss on assets in the amount
         of  $368,430 at December  31,  2000.  The  impairment  represented  the
         difference between the Property's  carrying value and the estimated net
         realizable  value of the Property at December 31, 2000. The cost of the
         Property  presented o this  schedule  is the gross  amount at which the
         Property was carried at December 31, 2000,  excluding the allowance for
         loss on assets.


<PAGE>


                            CNL INCOME FUND VI, LTD.
                         (A Florida Limited Partnership)

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 2000


(i)      For financial reporting  purposes,  during 2000, the undepreciated cost
         of the Property in Melbourne, Florida, was reduced to its estimated net
         realizable  value due to an  impairment  in value.  The  tenant of this
         Property  vacated  the  Property  and  ceased  restaurant   operations,
         resulting in a reclassification of the building portion of the lease to
         an  operating  lease.  The  building was recorded at net book value and
         depreciated  over its  remaining  estimated  life of  approximately  29
         years.




<PAGE>






                                    EXHIBITS




<PAGE>


                                  EXHIBIT INDEX


Exhibit Number

         3.1      Certificate of Limited Partnership of CNL Income Fund VI, Ltd.
                  (Included  as  Exhibit  3.3  to  Registration   Statement  No.
                  33-23892 on Form S-11 and incorporated herein by reference.)

         4.1      Certificate of Limited Partnership of CNL Income Fund VI, Ltd.
                  (Included  as  Exhibit  4.2  to  Registration   Statement  No.
                  33-23892 on Form S-11 and incorporated herein by reference.)

         4.2      Agreement and Certificate of Limited Partnership of CNL Income
                  Fund VI, Ltd. (Included as Exhibit 4.2 to Form 10-K filed with
                  the Securities  and Exchange  Commission on April 1, 1996, and
                  incorporated herein by reference.)

         10.1     Management  Agreement  (Included  as Exhibit 10.1 to Form 10-K
                  filed with the Securities and Exchange Commission on March 31,
                  1994, and incorporated herein by reference.)

         10.2     Assignment of Management Agreement from CNL Investment Company
                  to CNL Income Fund Advisors, Inc. (Included as Exhibit 10.2 to
                  From 10-K filed with the Securities and Exchange Commission on
                  March 30, 1995, and incorporated herein by reference.)

         10.3     Assignment  of  Management  Agreement  from  CNL  Income  Fund
                  Advisors, Inc. to CNL Fund Advisors, Inc. (Included as Exhibit
                  10.3 to Form  10-K  filed  with the  Securities  and  Exchange
                  Commission  on April  1,  1996,  and  incorporated  herein  by
                  reference.)