<PAGE>   1

                                    FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended              March 31, 1999                                   
                 ---------------------------------------------------------------


Commission file number          0-13563                                         
                      ----------------------------------------------------------


                     DAMSON/BIRTCHER REALTY INCOME FUND - I
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


              Pennsylvania                              13-3264491
--------------------------------------------------------------------------------
     (State or other jurisdiction of                 (I.R.S. Employer
      incorporation or organization)                Identification No.)


   27611 La Paz Road, P.O. Box 30009, Laguna Niguel, California   92607-0009    
--------------------------------------------------------------------------------
            (Address of principal executive offices)              (Zip Code)


                                 (949) 643-7700
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


                                       N/A
--------------------------------------------------------------------------------
         (Former name, former address and former fiscal year, if changed
                               since last report.)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 12(g), 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding twelve months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.


                               Yes [X]     No [ ]



<PAGE>   2

                      DAMSON/BIRTCHER REALTY INCOME FUND-I
                          QUARTERLY REPORT ON FORM 10-Q
                    FOR THE THREE MONTHS ENDED MARCH 31, 1999

                                      INDEX


<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>       <C>                                                              <C>
PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Statements of Net Assets in Liquidation - March 31, 1999
          (Unaudited)and December 31, 1998 (Audited).....................     3

          Statements of Changes of Net Assets in Liquidation -
          Three Months Ended March 31, 1999 and 1998 (Unaudited).........     4

          Notes to Financial Statements (Unaudited)......................     5

Item 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations..................    10

Item 3.   Quantitative and Qualitative Market Risk Disclosures...........    13

PART II.  OTHER INFORMATION..............................................    14
</TABLE>





                                        2
<PAGE>   3

                          PART I. FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS


                      DAMSON/BIRTCHER REALTY INCOME FUND-I
                     STATEMENTS OF NET ASSETS IN LIQUIDATION


<TABLE>
<CAPTION>
                                                      March 31,           December 31,
                                                        1999                 1998
                                                     -----------          -----------
                                                     (unaudited)
<S>                                                  <C>                  <C>        
ASSETS (Liquidation Basis):

Properties                                           $34,444,000          $34,431,000

Cash and cash equivalents                                502,000              351,000
Accounts receivable, net                                  37,000              171,000
Other assets                                             139,000              121,000
                                                     -----------          -----------
   Total Assets                                       35,122,000           35,074,000
                                                     -----------          -----------

LIABILITIES (Liquidation Basis):

Accounts payable and accrued liabilities                 873,000              896,000
Secured loan payable                                   2,450,000            2,509,000
Accrued expenses for liquidation (including
  prepayment penalty)                                    873,000              873,000
                                                     -----------          -----------
   Total Liabilities                                   4,196,000            4,278,000
                                                     -----------          -----------
Net Assets in Liquidation                            $30,926,000          $30,796,000
                                                     ===========          ===========
</TABLE>



The accompanying notes are an integral part of these financial statements.



                                       3
<PAGE>   4

                      DAMSON/BIRTCHER REALTY INCOME FUND-I
               STATEMENTS OF CHANGES OF NET ASSETS IN LIQUIDATION
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 Three Months Ended
                                                                      March 31,
                                                          -----------------------------------
                                                              1999                  1998 
                                                          ------------           ------------
<S>                                                       <C>                    <C>         
Net assets in liquidation at beginning of period          $ 30,796,000           $ 32,026,000
Increase (decrease) during period:
  Operating activities:
    Property operating income, net                             667,000                681,000
    Interest income                                              3,000                  4,000
    General and administrative expenses                       (208,000)              (234,000)
    Interest expense on mortgage payable                       (56,000)               (61,000)
    Leasing commissions                                        (11,000)              (108,000)
                                                          ------------           ------------
                                                               395,000                282,000
    Liquidating activities-
     distributions to partners                                (265,000)              (256,000)
                                                          ------------           ------------

Net increase in assets in liquidation                          130,000                 26,000
                                                          ------------           ------------

Net assets in liquidation at end of period                $ 30,926,000           $ 32,052,000
                                                          ============           ============
</TABLE>


   The accompanying notes are an integral part of these financial statements.





                                       4
<PAGE>   5

                      DAMSON/BIRTCHER REALTY INCOME FUND-I

NOTES TO FINANCIAL STATEMENTS - UNAUDITED

(1)     Accounting Policies

        The financial statements of Damson/Birtcher Realty Income Fund-I (the
        "Partnership") included herein have been prepared by the General
        Partner, without audit, pursuant to the rules and regulations of the
        Securities and Exchange Commission. These financial statements include
        all adjustments which are of a normal recurring nature and, in the
        opinion of the General Partner, are necessary for a fair presentation.
        Certain information and footnote disclosures normally included in
        financial statements prepared in accordance with generally accepted
        accounting principles have been condensed or omitted, pursuant to the
        rules and regulations of the Securities and Exchange Commission. These
        financial statements should be read in conjunction with the financial
        statements and notes thereto included in the Partnership's annual report
        on Form 10-K for the year ended December 31, 1998.

        Liquidation Basis of Accounting

        On February 18, 1997, the Partnership mailed a Consent Solicitation to
        the Limited Partners which sought their consent to dissolve the
        Partnership and sell and liquidate all of its remaining properties as
        soon as practicable, consistent with selling the Partnership's
        properties to the best advantage under the circumstances. A majority in
        interest of the Limited Partners consented by March 14, 1997. As a
        result, the Partnership adopted the liquidation basis of accounting as
        of March 31, 1997. The liquidation basis of accounting is appropriate
        when liquidation appears imminent, the Partnership can no longer be
        classified as a going concern and the net realizable values of the
        Partnership's assets are reasonably determinable. The difference between
        the adoption of the liquidation basis of accounting as of March 14, 1997
        and March 31, 1997 was not material.

        Under the liquidation basis of accounting, assets are stated at their
        estimated net realizable values and liabilities are stated at their
        anticipated settlement amounts. The valuation of assets and liabilities
        necessarily requires many estimates and assumptions, and there are
        substantial uncertainties in carrying out the dissolution of the
        Partnership. The actual values upon dissolution and costs associated
        therewith could be higher or lower than the amounts recorded.

        Segment Reporting

        The Partnership adopted Statement of Financial Accounting Standards No.
        131, "Disclosures About Segments of an Enterprise and Related
        Information" ("SFAS 131"). SFAS 131 requires, among other items, that a
        public business enterprise report a measure of segment profit or loss,
        certain specific revenue and expense items, segment assets, information
        about the revenues derived from the enterprise's products or services
        and major customers. SFAS 131 also requires that the enterprise report
        descriptive information about the way that the operating segments were
        determined and the products and services provided by the operating
        segments. Given that the Partnership is in the process of liquidation,
        the Partnership has identified only one operating business segment
        which is the business of asset liquidation. The adoption of SFAS 131 did
        not have an impact on the Partnership's financial reporting.

        Rental income from FISERV, Inc. (formerly d.b.a. Citicorp CIR, Inc.)
        totaled $257,000 and $234,000 for the three months ended March 31, 1999
        and 1998, or approximately 20% and 17% respectively of the Partnership's
        total rental income.

        Sale of the Properties

        In November 1998, the Partnership entered into a definitive Purchase and
        Sale Agreement with Abbey Investments, Inc. to sell all the
        Partnership's properties for a range between $34,500,000 and
        $36,000,000, depending on final occupancy rates at the time of closing.
        However, in January 1999, the agreement was terminated because Abbey had
        requested a material reduction in the purchase price, which the
        Partnership did not agree to.

        On March 24, 1999, the Partnership signed a Purchase and Sale Agreement
        and Joint Escrow Instructions to sell Terracentre for a sale price of
        $6,450,000. The purchaser is Halcyon Real Estate, Inc. ("Halcyon"), a
        local Denver real estate development company that is not affiliated in
        any way with the Partnership or the General Partner, or any of the
        General Partner's principals or affiliates. Closing of the transaction
        is subject to Halcyon's due diligence review and approval of title
        conditions,



                                       5
<PAGE>   6
                      DAMSON/BIRTCHER REALTY INCOME FUND-I

NOTES TO FINANCIAL STATEMENTS - UNAUDITED (Cont'd.)

(1)     Accounting Policies (Cont'd.)

        Sale of the Properties (Cont'd.)

        environmental reports, physical and engineering inspections, and
        operating documentation including leases, rental agreements and
        contracts, personal property inventories, operating expenses, property
        tax bills and physical plans and specifications for the property. The
        purchaser deposited $250,000 into escrow on March 25, 1999, which sum is
        fully refundable to the purchaser until completion of its due diligence
        investigation. The due diligence period ends May 17, 1999, with closing
        of the transaction currently scheduled to take place on June 2, 1999.
        Halcyon will not hire the General Partner or any affiliate to perform
        asset management or property management services for this property after
        close of the sale.

        On March 25, 1999, the Partnership signed a letter of intent with
        Praedium Performance Fund IV ("Praedium") to sell all of its properties
        except Terracentre to Praedium for $31,700,000. Praedium is a New
        York-based investment firm affiliated with CS First Boston. Praedium is
        not affiliated in any way with the Partnership or the General Partner,
        or any of the General Partner's principals or affiliates. Praedium will
        hire Birtcher or an affiliate as asset manager for the properties, and
        pay an annual fee equal to .30% of the value of the assets for asset
        management services. Also, Praedium will hire Birtcher or an affiliate
        as property manager for these assets for a fee that is approximately the
        same as the current fees paid to the General Partner for property
        management.

        On April 30, 1999, Praedium and the Partnership executed a definitive
        Purchase and Sale Agreement for the price and on the terms contemplated
        in the letter of intent, and Praedium deposited $243,100 into escrow.
        The Agreement is subject to customary contingencies, including due
        diligence inspection and review, approval of title conditions, receipt
        of tenant estoppels and the like, and is subject to formal approval by
        Praedium's "Investment Committee." Praedium's deposit is fully
        refundable during the contingency period. The contingency period
        currently expires on June 14, 1999, with closing of the transaction
        currently scheduled for July 14, 1999.

        Earnings Per Unit

        The Partnership Agreement does not designate investment interests in
        units. All investment interests are calculated on a "percent of
        Partnership" basis, in part to accommodate original reduced rates on
        sales commissions for subscriptions in excess of certain specified
        amounts.

        A Limited Partner who was charged a reduced sales commission or no sales
        commission was credited with proportionately larger Invested Capital and
        therefore had a disproportionately greater interest in the capital and
        revenues of the Partnership than a Limited Partner who paid commissions
        at a higher rate. As a result, the Partnership has no set unit value as
        all accounting, investor reporting and tax information is based upon
        each investor's relative percentage of Invested Capital. Accordingly,
        earnings or loss per unit is not presented in the accompanying financial
        statements.

(2)     Transactions with Affiliates

        The Partnership has no employees and, accordingly, the General Partner
        and its affiliates perform services on behalf of the Partnership in
        connection with administering the affairs of the Partnership. The
        General Partner and



                                       6
<PAGE>   7

                      DAMSON/BIRTCHER REALTY INCOME FUND-I

NOTES TO FINANCIAL STATEMENT - UNAUDITED (Cont'd.)

(2)     Transactions with Affiliates (Cont'd.)

        affiliates are reimbursed for their general and administrative costs
        actually incurred and associated with services performed on behalf of
        the Partnership. For the three months ended March 31, 1999 and 1998, the
        Partnership incurred approximately $33,000 and $40,000, respectively.

        An affiliate of the General Partner provides property management
        services with respect to the Partnership's properties and receives a fee
        for such services not to exceed 3% of the gross receipts from the
        properties under management. Such fees amounted to approximately $42,000
        and $42,000 for the three months ended March 31, 1999 and 1998,
        respectively. In addition, an affiliate of the General Partner received
        $86,000 and $73,000 for the three months ended March 31, 1999 and 1998,
        respectively, as reimbursement of costs of on-site property management
        personnel and other reimbursable costs.

        As previously reported, on June 24, 1993, the Partnership completed its
        solicitation of written consents from its Limited Partners. A majority
        in interest of the Partnership's Limited Partners approved each of the
        proposals contained in the Information Statement dated May 5, 1993.
        Those proposals were implemented by the Partnership as contemplated by
        the Information Statement as amendments to the Partnership Agreement,
        and are reflected in these financial statements as such.

        The amended Partnership Agreement provides for the Partnership's payment
        to the General Partner of an annual asset management fee equal to .45%
        for 1999 and .55% for 1998 of the aggregate appraised value of the
        Partnership's properties as determined by independent appraisal
        undertaken in January of 1998 and by the General Partner's estimate of
        fair value in January 1999. Such fees for the three months ended March
        31, 1999 and 1998, amounted to $39,000 and $52,000, respectively.

        In addition, the amended Partnership Agreement provides for payment to
        the General Partner of a leasing fee for services rendered in connection
        with leasing space in a Partnership property after the expiration or
        termination of leases. Fees for leasing services for the three months
        ended March 31, 1999 and 1998, amounted to $1,000 and $23,000,
        respectively.

(3)     Commitments and Contingencies

        Litigation

        So far as is known to the General Partner, neither the Partnership nor
        its properties are subject to any material pending legal proceedings,
        except for the following:

        Bigelow/Diversified Secondary Partnership's Fund 1990 Litigation
        ----------------------------------------------------------------

        On March 25, 1997, a limited partner named Bigelow/Diversified Secondary
        Partnership Fund 1990 filed a purported class action lawsuit in the
        Court of Common Pleas of Philadelphia County against Damson/Birtcher
        Partners, Birtcher Investors, Birtcher/Liquidity Properties, Birtcher
        Investments, L.F. Special Fund II, L.P., L.F. Special Fund I, L.P.,
        Arthur Birtcher, Ronald Birtcher, Robert Anderson, Richard G. Wollack
        and Brent R. Donaldson alleging breach of fiduciary duty and breach of
        contract and seeking to enjoin the Consent Solicitation dated February
        18, 1997. On April 18,


                                       7
<PAGE>   8

                      DAMSON/BIRTCHER REALTY INCOME FUND-I

NOTES TO FINANCIAL STATEMENT - UNAUDITED (Cont'd.)

(3)     Commitments and Contingencies (Cont'd.)

        Litigation (Cont'd.)

        Bigelow Diversified Secondary Partnership Fund 1990 litigation (Cont'd.)

        1997, the court denied the plaintiff's motion for a preliminary
        injunction. On June 10, 1997, the court dismissed the plaintiff's
        complaint on the basis of lack of personal jurisdiction and forum non
        conveniens.

        On June 13, 1997, the Partnership's affiliated partnerships,
        Damson/Birtcher Realty Income Fund-II and Real Estate Income Partners
        III, and their general partner, Birtcher/Liquidity Properties, filed a
        complaint for declaratory relief in the Court of Chancery in Delaware
        against Bigelow/Diversified Secondary Partnership Fund 1990 L.P. The
        complaint seeks a declaration that the vote that the limited partners of
        Damson/Birtcher Realty Income Fund-II and Real Estate Income Partners
        III took pursuant to the respective consent solicitations dated February
        18, 1997 was effective to dissolve the respective partnerships and
        complied with applicable law, that the actions of the General Partner in
        utilizing the consent solicitations to solicit the vote of the limited
        partners did not breach any fiduciary or contractual duty to such
        limited partners, and an award of costs and fees to the plaintiffs. The
        defendant has answered the complaint. The parties have initiated
        discovery. No motions are pending at this time.

        In September 1998, Bigelow/Diversified Secondary Partnership 1990
        informed the Partnership that it was filing suit in the Delaware
        Chancery Court against Damson/Birtcher Partners, Birtcher Investors,
        Birtcher Liquidity Properties, Birtcher Investments, BREICORP, LF
        Special Fund I, LP, LF Special Fund II. LP, Arthur Birtcher, Ronald
        Birtcher, Robert Anderson, Richard G. Wollack and Brent R. Donaldson
        alleging a purported class action on behalf of the limited partners of
        Damson/Birtcher Realty Income Fund-I, Damson/Birtcher Realty Income
        Fund-II and Real Estate Income Partners III alleging breach of fiduciary
        duty and incorporating the allegations set forth in the previously
        dismissed March 25, 1997 complaint filed in the Court of Chancery of
        Philadelphia County. Plaintiff has engaged in preliminary discovery and
        the parties have held settlement discussions. No motions are pending at
        this time.

        Rex Garton, et al. v. Damson/Birtcher Partners, et al.
        ------------------------------------------------------

        This action was filed on September 25, 1998 in the District Court of
        Oklahoma County for the State of Oklahoma against the Partnership's
        general partner, Damson/Birtcher Partners, other related defendants and
        numerous unrelated defendants. Damson/Birtcher Partners and other
        related defendants were brought into the action in late December 1998,
        when they were served with the Second Amended Petition. The other
        related defendants are Birtcher Partners, Birtcher Properties, The
        Birtcher Group, Birtcher American Properties, Arthur B. Birtcher, Ronald
        E. Birtcher, LF Special Fund II, L.P., and Liquidity Fund Asset
        Management Inc., but The Birtcher Group and Birtcher American Properties
        have not been served with process and have not appeared in the action.
        The Partnership itself is not named as a defendant. The case is a class
        action brought on behalf of investors in the Partnership who purchased
        limited partnership interests from May 7,


                                       8
<PAGE>   9

                      DAMSON/BIRTCHER REALTY INCOME FUND-I

NOTES TO FINANCIAL STATEMENT - UNAUDITED (Cont'd.)

(3)     Commitments and Contingencies (Cont'd.)

        Litigation (Cont'd.)

        Rex Garton, et al. v. Damson/Birtcher, et al. (Cont'd.)

        1984 to September 17, 1985. The Second Amended Petition alleges breach
        of contract, intentional and negligent misrepresentation, breach of
        fiduciary duties, and violations of various Oklahoma and federal
        statutes in connection with the sale of the limited partnership
        interests. Plaintiff seeks unspecified compensatory damages and $10
        million in punitive damages.

        Damson/Birtcher Partners and the related defendants have removed the
        case to the United States District Court for the Western District of
        Oklahoma, and have filed a motion to dismiss the case for lack of
        personal jurisdiction or, alternatively, to transfer the action to the
        United States District Court for the Central District of California, for
        the convenience of the parties and witnesses and in the interests of
        justice. Plaintiff has moved to remand the case back to the Oklahoma
        state court. Both motions are pending. Damson/Birtcher Partners and the
        related defendants intend to present a vigorous defense on the merits of
        plaintiff's claims, should this be necessary.

        Madison Partnership and ISA Partnership Litigation

        On April 2, 1999, Madison Partnership Liquidity Investors XVI, LLC and
        ISA Partnership Liquidity Investors filed a purported class and
        derivative action in the California Superior Court in Orange County,
        California against Damson Birtcher Partners, Birtcher/Liquidity
        Properties, Birtcher Partners, Birtcher Investors, Birtcher Investments,
        Birtcher Limited, Breicorp LP Special Fund II, L.P., Liquidity Fund
        Asset Management, Inc., Robert M. Anderson, Brent R. Donaldson, Arthur
        B. Birtcher, Ronald E. Birtcher, and Richard G. Wollack, Defendants, and
        Damson/Birtcher Realty Income Fund-I, Damson/Birtcher Realty Income
        Fund-II, and Real Estate Income Partners III, Nominal Defendants. The
        complaint asserts claims for breach of fiduciary duty and breach of
        contract. The gravamen of the complaint is that the General Partners of
        these limited partnerships have not undertaken all reasonable efforts to
        expedite liquidation of the Partnerships' properties and to maximize the
        returns to the Partnerships' limited partners. The complaint seeks
        unspecified monetary damages, attorneys' fees and litigation expenses,
        and an order for dissolution of the Partnerships and appointment of an
        independent liquidating trustee. The Partnership has yet to respond to
        the complaint, but intends to present a vigorous defense.

(4)     Accrued Expenses for Liquidation

        Accrued expenses for liquidation as of March 31, 1999, include estimates
        of costs to be incurred in carrying out the dissolution and liquidation
        of the Partnership. These costs include estimates of legal fees,
        accounting fees, tax preparation and filing fees, other professional
        services and the pre-payment penalty associated with the anticipated
        early retirement of the mortgage loan secured by the Certified
        Distribution Center property. The actual costs could vary significantly
        from the related provisions due to the uncertainty related to the length
        of time required to complete the liquidation and dissolution and the
        complexities which may arise in disposing of the Partnership's remaining
        assets.





                                       9
<PAGE>   10

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

        Liquidity and Capital Resources

        Since the completion of its acquisition program in September 1985, the
        Partnership has been engaged in the operation of its properties. The
        Partnership's original objective had been to hold its properties as
        long-term investments. However, an Information Statement, dated May 5,
        1993, mandated that the General Partner seek a vote of the Limited
        Partners no later than December 31, 1996, regarding prompt liquidation
        of the Partnership in the event that properties with appraised values as
        of January 1993 which constituted at least one half of the aggregate
        appraised values of all Partnership properties as of that date were not
        sold or under contract for sale by the end of 1996. Given the mandate of
        the May 5, 1993 Information Statement, as of December 31, 1995, the
        General Partner decided to account for the Partnership's properties as
        assets held for sale, instead of for investment. In a Consent
        Solicitation dated February 18, 1997, the Partnership solicited and
        received the consent of the Limited Partners on March 14, 1997 to
        dissolve the Partnership and sell and liquidate all of its remaining
        properties as soon as practicable, consistent with selling the
        Partnership's properties to the best advantage under the circumstances.
        The Partnership's properties were held for sale throughout 1998 and
        continue to be held for sale.

        In November 1998, the Partnership entered into a Purchase and Sale
        Agreement with Abbey Investments, Inc. to sell all the Partnership's
        properties for a purchase price ranging between $34,500,000 and
        $36,000,000, depending on final occupancy rates at the time of closing.
        However, in January 1999, the agreement was terminated because Abbey had
        requested a material reduction in the purchase price, which the
        Partnership did not agree to.

        On March 24, 1999, the Partnership signed a Purchase and Sale Agreement
        and Joint Escrow Instructions to sell Terracentre for a sale price of
        $6,450,000. The purchaser is Halcyon Real Estate, Inc. ("Halcyon"), a
        local Denver real estate development company that is not affiliated in
        any way with the Partnership or the General Partner, or any of the
        General Partner's principals or affiliates. Closing of the transaction
        is subject to Halcyon's due diligence review and approval of title
        conditions, environmental reports, physical and engineering inspections,
        and operating documentation including leases, rental agreements and
        contracts, personal property inventories, operating expenses, property
        tax bills and physical plans and specifications for the property. The
        purchaser deposited $250,000 into escrow on March 25, 1999, which sum is
        fully refundable to the purchaser until completion of its due diligence
        investigation. The due diligence period ends May 17, 1999, with closing
        of the transaction currently scheduled to take place on June 2, 1999.
        Halcyon will not hire the General Partner or any affiliate to perform
        asset management or property management services for this property after
        close of the sale.

        On March 25, 1999, the Partnership signed a letter of intent with
        Praedium Performance Fund IV ("Praedium") to sell all of its properties
        except Terracentre to Praedium for $31,700,000. Praedium is a New
        York-based investment firm affiliated with CS First Boston. Praedium is
        not affiliated in any way with the Partnership or the General Partner,
        or any of the General Partner's principals or affiliates. Praedium will
        hire Birtcher or an affiliate as asset manager for the properties, and
        pay an annual fee

                                       10
<PAGE>   11

                      DAMSON/BIRTCHER REALTY INCOME FUND-I

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (Cont'd.)

        Liquidity and Capital Resources (Cont'd.)


        equal to .30% of the value of the assets for asset management services.
        Also, Praedium will hire Birtcher or an affiliate as property manager
        for these assets for a fee that is approximately the same as the current
        fees paid to the General Partner for property management.

        On April 30, 1999, Praedium and the Partnership executed a definitive
        Purchase and Sale Agreement for the price and on the terms contemplated
        in the letter of intent, and Praedium deposited $243,100 into escrow.
        The Agreement is subject to customary contingencies, including due
        diligence inspection and review, approval of title conditions, receipt
        of tenant estoppels and the like, and is subject to formal approval by
        Praedium's "Investment Committee." Praedium's deposit is fully
        refundable during the contingency period. The contingency period
        currently expires on June 14, 1999, with closing of the transaction
        currently scheduled for July 14, 1999.

        Although there can be no assurance that the proposed sales of the
        properties will be completed, if the sales are completed at the stated
        prices, the limited partners will receive total aggregate sale proceeds
        of approximately $345 per $1,000 originally invested in the Partnership.

        The General Partner's estimate of sales proceeds does not take into
        account the expenditure of Partnership cash reserves, operating expenses
        or net income or loss of the Partnership for any period prior to the
        time the remaining properties are sold, which could affect the amount of
        sales proceeds available for distribution. Therefore, the actual
        proceeds to be received by the limited partners may vary materially, up
        or down, from the estimate.

        Regular distributions through March 31, 1999 represent cash flow
        generated from operations of the Partnership's properties and interest
        earned on the temporary investment of working capital net of capital
        reserve requirements.

        Future cash distributions will be made principally to the extent of cash
        flow attributable to operations and sales of the Partnership's
        properties and interest earned on the investment of capital reserves,
        after loan repayments, payment for capital improvements to the
        Partnership's properties and providing for capital reserves.

        On July 30, 1993, the Partnership obtained a loan secured by a First
        Deed of Trust on the Certified Distribution Center in Salt Lake City,
        Utah. The loan, in the amount of $3,500,000, carries a fixed interest
        rate of 9% per annum over a 13-year fully amortizing term and a
        prepayment penalty of approximately $700,000 at current interest rates.

        In March 1996, the Partnership entered into a loan agreement pursuant to
        which it could borrow up to $1,500,000 (similar to a credit line
        arrangement), evidenced by a note secured by a first deed of trust and
        financing statement on the Ladera I Shopping Center in Albuquerque, New
        Mexico. Pursuant to the note and loan agreement, the Partnership
        borrowed $700,000 in March 1996. The net proceeds of the foregoing loan
        were used to fund a portion of the renovation and tenant improvements at
        The Cornerstone and tenant improvements at Oakpointe. The Partnership
        made interest only payments at the rate of 1% over prime (the loan rate
        was 9.25%) through November 1996, when the entire balance was paid off
        utilizing a portion of the proceeds from the sale of Arlington Executive
        Plaza. The Partnership has the ability to borrow against this credit
        facility (up to $1,500,000) through April 2002 should its cash
        requirements necessitate.

        Other Matters

        The Partnership is in the process of liquidating its remaining assets.
        It is anticipated that a sale of those assets will occur on or before
        January 1, 2000. It is the opinion of the General Partner that the value
        of those assets is not subject to any valuation risk as a result of year
        2000 issues, other than general economic climate issues that may arise.
        Based on current information, the cost of addressing potential year 2000
        problems is not expected to have a material adverse impact on the
        Partnership's





                                       11
<PAGE>   12

                      DAMSON/BIRTCHER REALTY INCOME FUND-I

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (Cont'd.)

        Other Matters (Cont'd.)


        financial position, results of operations or cash flows in future
        periods. As of March 31, 1999, the investor services system used to
        track the limited partners' interests, distributions and tax information
        has been tested and appears to be free of year 2000 bugs. The
        Partnership's properties are under review utilizing the Building Owners
        and Managers Association ("BOMA") industry standards as a guideline for
        necessary corrections and the Partnership's accounting systems are
        scheduled for a software upgrade to correct any year 2000 issues in July
        of 1999. The cost of the upgrades will be borne by the General Partner
        and will not be reimbursed by the Partnership. In addition, the General
        Partner has made inquiries of its banks, all of which indicate that any
        problems have been addressed adequately by those institutions.

        Even if attempts to correct any deficiencies in the Partnership's
        software are unsuccessful, the General Partner anticipates that in the
        short term it could convert its systems to standard spreadsheet or data
        base programs at nominal costs.

        Results of Operations for the Three Months Ended March 31, 1999

        Because the Partnership is in the process of liquidating its remaining
        assets, a comparison of the results of operations is not practical. As
        the Partnership's assets (properties) are sold, the results of
        operations will be generated from a smaller asset base, and are
        therefore not comparable. The Partnership's operating results have been
        reflected on the Statements of Changes of Net Assets in Liquidation.

        For the three months ended March 31, 1999, the Partnership generated
        $667,000 of net operating income from operations of its properties. The
        decrease in net operating income for the three months ended March 31,
        1999 when compared to the same period in 1998 was primarily attributable
        to the write off of $194,000 in uncollectable tenant rents at The
        Cornerstone. This decrease was partially offset by an increase in
        revenue at Certified Warehouse ($78,000), Washington Technical Center
        ($18,000) and Oakpointe ($57,000).

        In September and November 1997, Certified Warehouse and Transfer
        Company, Inc. vacated Certified Distribution Center. Although the
        General Partner successfully completed negotiation of a 123,074 square
        foot lease with Quality Distribution effective March 1, 1998 at a rate
        greater than before, the remaining 189,115 square foot vacancy will have
        a negative impact on future distributions of cash from operations to the
        Limited Partners.

        Interest income resulted from the temporary investment of Partnership
        working capital. For the three months ended March 31, 1999, interest
        income was approximately $3,000.

        General and administrative expenses for the three months ended March 31,
        1999, include charges of $73,000 from the General Partner and its
        affiliates for services rendered in connection with administering the
        affairs of the Partnership and operating the Partnership's properties.





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                      DAMSON/BIRTCHER REALTY INCOME FUND-I

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS (Cont'd.)

        Results of Operations for the Three Months Ended March 31, 1999
        (Cont'd.)


        Also included in general and administrative expenses for the three
        months ended March 31, 1999, are direct charges of $135,000, relating to
        audit fees, tax preparation fees, legal fees and professional services,
        liability insurance expenses, costs incurred in providing information to
        the Limited Partners and other miscellaneous costs.

        The decrease in general and administrative expenses for the three months
        ended March 31, 1999, as compared to the corresponding period in 1998,
        was primarily attributable to decreases in the General Partner's
        liability insurance, asset management fees and leasing fees during 1999.
        The aforementioned decreases were partially offset by an increase in
        legal fees incurred.

        Accrued expenses for liquidation as of March 31, 1999, includes
        estimates of costs to be incurred in carrying out the dissolution and
        liquidation of the Partnership. These costs include estimates of legal
        fees, accounting fees, tax preparation and filing fees, other
        professional services, and the pre-payment penalty associated with the
        anticipated early retirement of the mortgage loan secured by the
        Certified Distribution Center property. The actual costs could vary
        significantly from the related provisions due to the uncertainty related
        to the length of time required to complete the liquidation and
        dissolution and the complexities which may arise in disposing of the
        Partnership's remaining assets.

        Interest expense resulted from interest on the first deed of trust on
        Certified Distribution Center.

ITEM 3. QUANTITATIVE AND QUALITATIVE MARKET RISK DISCLOSURES

        The Partnership is not exposed to interest rate changes because its only
        obligation outstanding at year end carries a fixed interest rate and the
        Partnership expects to sell its properties within a short period of
        time. The Partnership's interest rate risk management objective is to
        limit the impact of interest rate changes on earnings and cash flows and
        to lower its overall borrowing costs. To achieve its objectives, the
        Partnership borrows primarily at fixed rates. The Partnership does not
        enter into derivative or interest rate transactions for speculative
        purposes.


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                      DAMSON/BIRTCHER REALTY INCOME FUND-I


                           PART II. OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

        So far as is known to the General Partner, neither the Partnership nor
        its properties are subject to any material pending legal proceedings,
        except for the following:

        Bigelow Diversified Secondary Partnership Fund 1990 litigation

        On March 25, 1997, a limited partner named Bigelow/Diversified Secondary
        Partnership Fund 1990 filed a purported class action lawsuit in the
        Court of Common Pleas of Philadelphia County against Damson/Birtcher
        Partners, Birtcher Investors, Birtcher/Liquidity Properties, Birtcher
        Investments, L.F. Special Fund II, L.P., L.F. Special Fund I, L.P.,
        Arthur Birtcher, Ronald Birtcher, Robert Anderson, Richard G. Wollack
        and Brent R. Donaldson alleging breach of fiduciary duty and breach of
        contract and seeking to enjoin the Consent Solicitation dated February
        18, 1997. On April 18, 1997, the court denied the plaintiff's motion for
        a preliminary injunction. On June 10, 1997, the court dismissed the
        plaintiff's complaint on the basis of lack of personal jurisdiction and
        forum non conveniens.

        On June 13, 1997, the Partnership's affiliated partnerships,
        Damson/Birtcher Realty Income Fund-II and Real Estate Income Partners
        III, and their general partner, Birtcher/Liquidity Properties, filed a
        complaint for declaratory relief in the Court of Chancery in Delaware
        against Bigelow/Diversified Secondary Partnership Fund 1990 L.P. The
        complaint seeks a declaration that the vote that the limited partners of
        Damson/Birtcher Realty Income Fund-II and Real Estate Income Partners
        III took pursuant to the respective consent solicitations dated February
        18, 1997 was effective to dissolve the respective partnerships and
        complied with applicable law, that the actions of the General Partner in
        utilizing the consent solicitations to solicit the vote of the limited
        partners did not breach any fiduciary or contractual duty to such
        limited partners, and an award of costs and fees to the plaintiffs. The
        defendant has answered the complaint. The parties have initiated
        discovery. No motions are pending at this time.

        In September 1998, Bigelow/Diversified Secondary Partnership 1990
        informed the Partnership that it was filing suit in the Delaware
        Chancery Court against Damson/Birtcher Partners, Birtcher Investors,
        Birtcher Liquidity Properties, Birtcher Investments, BREICORP, LF
        Special Fund I, LP, LF Special Fund II. LP, Arthur Birtcher, Ronald
        Birtcher, Robert Anderson, Richard G. Wollack and Brent R. Donaldson
        alleging a purported class action on behalf of the limited partners of
        Damson/Birtcher Realty Income Fund-I, Damson/Birtcher Realty Income
        Fund-II and Real Estate Income Partners III alleging breach of fiduciary
        duty and incorporating the allegations set forth in the previously
        dismissed March 25, 1997 complaint filed in the Court of Chancery of
        Philadelphia County. Plaintiff has engaged in preliminary discovery and
        the parties have held settlement discussions. No motions are pending at
        this time.

        Rex Garton, et al. v. Damson/Birtcher Partners, et al.

        This action was filed on September 25, 1998 in the District Court of
        Oklahoma County for the State of Oklahoma against the Partnership's
        general partner, Damson/Birtcher Partners, other related defendants and
        numerous unrelated defendants. Damson/Birtcher Partners and other
        related defendants were brought into the action in late December 1998,
        when they were served with the Second Amended Petition. The other
        related defendants




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                      DAMSON/BIRTCHER REALTY INCOME FUND-I

ITEM 1.        LEGAL PROCEEDINGS (Cont'd.)

        Rex Garton, et al. v. Damson/Birtcher Partners, et al. (Cont'd)

        are Birtcher Partners, Birtcher Properties, The Birtcher Group, Birtcher
        American Properties, Arthur B. Birtcher, Ronald E. Birtcher, LF Special
        Fund II, L.P., and Liquidity Fund Asset Management Inc., but The
        Birtcher Group and Birtcher American Properties have not been served
        with process and have not appeared in the action. The Partnership itself
        is not named as a defendant. The case is a class action brought on
        behalf of investors in the Partnership who purchased limited partnership
        interests from May 7, 1984 to September 17, 1985. The Second Amended
        Petition alleges breach of contract, intentional and negligent
        misrepresentation, breach of fiduciary duties, and violations of various
        Oklahoma and federal statutes in connection with the sale of the limited
        partnership interests. Plaintiff seeks unspecified compensatory damages
        and $10 million in punitive damages.

        Damson/Birtcher Partners and the related defendants have removed the
        case to the United States District Court for the Western District of
        Oklahoma, and have filed a motion to dismiss the case for lack of
        personal jurisdiction or, alternatively, to transfer the action to the
        United States District Court for the Central District of California, for
        the convenience of the parties and witnesses and in the interests of
        justice. Plaintiff has moved to remand the case back to the Oklahoma
        state court. Both motions are pending. Damson/Birtcher Partners and the
        related defendants intend to present a vigorous defense on the merits of
        plaintiff's claims, should this be necessary.

        Madison Partnership and ISA Partnership Litigation

        On April 2, 1999, Madison Partnership Liquidity Investors XVI, LLC and
        ISA Partnership Liquidity Investors filed a purported class and
        derivative action in the California Superior Court in Orange County,
        California against Damson Birtcher Partners, Birtcher/Liquidity
        Properties, Birtcher Partners, Birtcher Investors, Birtcher Investments,
        Birtcher Limited, Breicorp LP Special Fund II, L.P., Liquidity Fund
        Asset Management, Inc., Robert M. Anderson, Brent R. Donaldson, Arthur
        B. Birtcher, Ronald E. Birtcher, and Richard G. Wollack, Defendants, and
        Damson/Birtcher Realty Income Fund-I, Damson/Birtcher Realty Income
        Fund-II, and Real Estate Income Partners III, Nominal Defendants. The
        complaint asserts claims for breach of fiduciary duty and breach of
        contract. The gravamen of the complaint is that the General Partners of
        these limited partnerships have not undertaken all reasonable efforts to
        expedite liquidation of the Partnerships' properties and to maximize the
        returns to the Partnerships' limited partners. The complaint seeks
        unspecified monetary damages, attorneys' fees and litigation expenses,
        and an order for dissolution of the Partnerships and appointment of an
        independent liquidating trustee. The Partnership has yet to respond to
        the complaint, but intends to present a vigorous defense.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        a)      Exhibits:

                27 - Financial Data Schedule

        b)      Reports on Form 8-K:

                None filed in quarter ended March 31, 1999.




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                      DAMSON/BIRTCHER REALTY INCOME FUND-I


                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




                                DAMSON/BIRTCHER REALTY INCOME FUND-I


By: DAMSON/BIRTCHER PARTNERS    By: BIRTCHER PARTNERS,
    General Partner)                a California general partnership

                                    By: BIRTCHER INVESTMENTS,
                                        a California general partnership,
                                        General Partner of Birtcher Partners

                                        By: BIRTCHER LIMITED,
                                            a California limited partnership,
                                            General Partner of Birtcher
                                            Investments

                                            By: BREICORP,
                                                a California corporation,
                                                formerly known as Birtcher
                                                Real Estate Inc., General
                                                Partner of Birtcher Limited

Date: May 14, 1999                              By: /s/Robert M. Anderson
                                                    ----------------------------
                                                    Robert M. Anderson
                                                    Executive Director
                                                    BREICORP

                               By: LF Special Fund II, L.P.,
                                   a California limited partnership

                                   By: Liquidity Fund Asset Management, Inc.,
                                       a California corporation, General
                                       Partner of LF Special Fund II, L.P.

Date: May 14, 1999                     By: /s/ Brent R. Donaldson       
                                           ------------------------------------
                                           Brent R. Donaldson
                                           President
                                           Liquidity Fund Asset Management, Inc.




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                      DAMSON/BIRTCHER REALTY INCOME FUND-I


                                 EXHIBIT INDEX

        a)      Exhibits:

                27 - Financial Data Schedule

        b)      Reports on Form 8-K:

                None filed in quarter ended March 31, 1999.




                                       17