##### Table of Contents



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,
2002     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
incorporation or organization) |  | (I.R.S. Employer
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 | 
|    |  |   |  |    | 





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TABLE OF CONTENTS



|                              |                                                                                               |                                                    |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | -------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | ITEM 1. FINANCIAL STATEMENTS                                                                 
|                              |                                                                                               | STATEMENTS OF NET ASSETS IN LIQUIDATION           
|                              |                                                                                               | STATEMENTS OF CHANGES OF NET ASSETS IN LIQUIDATION
|                              |                                                                                               | NOTES TO FINANCIAL STATEMENTS  UNAUDITED         
|                              | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                              | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|PART II. OTHER INFORMATION   
|                              | ITEM 1. LEGAL PROCEEDINGS                                                                    
|                              | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                   



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##### Table of Contents



DAMSON/BIRTCHER REALTY INCOME FUND-I
QUARTERLY REPORT ON FORM 10-Q
FOR THE THREE MONTHS ENDED MARCH 31, 2002

INDEX

|         |  |                                                                                       |                                                                                                             |    |     
|-------- |  | ------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------- | -- | ----
|         |  |                                                                                       |                                                                                                             |    | Page
|         |  |                                                                                       |                                                                                                             |    |     
|PART I   |  | FINANCIAL INFORMATION                                                                 |                                                                                                             |   
|        
|Item 1.  |  | Financial Statements                                                                  |                                                                                                             |   
|        
|         |  |                                                                                       | Statements of Net Assets in Liquidation  March 31, 2002
(Unaudited) and December 31, 2001 (Audited)        | 3 
|        
|         |  |                                                                                       | Statements of Changes of Net Assets in Liquidation 
Three Months Ended March 31, 2002 and 2001 (Unaudited) | 4 
|        
|         |  |                                                                                       | Notes to Financial Statements (Unaudited)                                                                   | 5 
|        
|Item 2.  |  | Managements Discussion and Analysis of
Financial Condition and Results of Operations |                                                                                                             | 11
|        
|Item 3.  |  | Quantitative and Qualitative Disclosures About Market Risk                            |                                                                                                             | 12
|        
|PART II. |  | OTHER INFORMATION                                                                     |                                                                                                             |    |     
|        
|Item 1.  |  | Legal Proceedings                                                                     |                                                                                                             | 13
|        
|Item 6.  |  | Exhibits and Reports on Form 8-K                                                      |                                                                                                             | 16

2



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##### Table of Contents






PART I. FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS

DAMSON/BIRTCHER REALTY INCOME FUND-I




STATEMENTS OF NET ASSETS IN LIQUIDATION


|                                         |                   |   |             |           |              |   |           |           | 
|---------------------------------------- | ----------------- | - | ----------- | --------- | ------------ | - | --------- | --------- | 
|                                         |                   |   | March 31,   |           | December 31,
|                                         |                   |   | 2002        |           | 2001        
|                                         |                   |   |             |           |             
|                                         |                   |   | (unaudited) |           |              |   |          
|ASSETS (Liquidation Basis):              |                   |   |             |           |              |   |           |          
|Cash and cash equivalents                |                   | $ | 2,882,000   |           |              | $ | 3,425,000 |          
|Cash held in escrow                      |                   |   | 85,000      |           |              |   | 85,000    |          
|Receivables, net                         |                   |   | 5,000       |           |              |   | 1,000     |          
|                                         |                   |   |             |           |              |   |           |          
|                                         | Total Assets      |   |             | 2,972,000 |              |   |           | 3,511,000 | 
|                                         |                   |   |             |           |              |   |           |          
|LIABILITIES (Liquidation Basis):         |                   |   |             |           |              |   |           |          
|Accounts payable and accrued liabilities |                   |   | 177,000     |           |              |   | 137,000   |          
|Accrued expenses for liquidation         |                   |   | 335,000     |           |              |   | 881,000   |          
|                                         |                   |   |             |           |              |   |           |          
|                                         | Total Liabilities |   |             | 512,000   |              |   |           | 1,018,000 | 
|                                         |                   |   |             |           |              |   |           |          
|Net Assets in Liquidation                |                   | $ | 2,460,000   |           |              | $ | 2,493,000 |          
|                                         |                   |   |             |           |              |   |           |          

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

3



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##### Table of Contents



DAMSON/BIRTCHER REALTY INCOME FUND-I




STATEMENTS OF CHANGES OF NET ASSETS IN LIQUIDATION

(Unaudited)


|                                                 |                                                |   |                    |          |      |   |           |   | 
|------------------------------------------------ | ---------------------------------------------- | - | ------------------ | -------- | ---- | - | --------- | - | 
|                                                 |                                                |   | Three Months Ended
|                                                 |                                                |   | March 31,         
|                                                 |                                                |   |                   
|                                                 |                                                |   | 2002               |          | 2001
|                                                 |                                                |   |                    |          |     
|Net assets in liquidation at
beginning of period |                                                | $ | 2,493,000          |          |      | $ | 3,162,000 |  
|                                                 |                                                |   |                    |          |      |   |           |  
|Increase during period:                          |                                                |   |                    |          |      |   |           |  
|Operating
activities  interest income           |                                                |   | 15,000             |          |      |   | 57,000    |  
|                                                 |                                                |   |                    |          |      |   |           |  
|                                                 |                                                |   | 15,000             |          |      |   | 57,000    |  
|                                                 |                                                |   |                    |          |      |   |           |  
|Liquidating activities:                          |                                                |   |                    |          |      |   |           |  
|                                                 | Distributions to partners                      |   |                    | (456,000 | )    |   |           |  | 
|                                                 | Decrease in provision for
liquidation expenses |   |                    | 408,000  |      |   |           |  | 
|                                                 |                                                |   |                    |          |      |   |           |  
|                                                 |                                                |   | (48,000            | )        |      |   |          |  
|                                                 |                                                |   |                    |          |      |   |           |  
|Net increase (decrease) in assets
in liquidation |                                                |   | (33,000            | )        |      |   | 57,000    |  
|                                                 |                                                |   |                    |          |      |   |           |  
|Net assets in liquidation at
end of period       |                                                | $ | 2,460,000          |          |      | $ | 3,219,000 |  
|                                                 |                                                |   |                    |          |      |   |           |  

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

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##### Table of Contents



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 accounting principles generally
accepted in the United States of America 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, 2001.                                                                                                                                                           
|   
|    |  | The Partnership uses the liquidation basis of accounting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|    |  | Sale of the Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | The Partnership sold five of its six remaining properties during the year
ended December 31, 1999 and sold its last property on May 31, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(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 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, 2002 and 2001, the Partnership incurred approximately $3,000 and
$3,000, respectively of such costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(3) |  | Commitments and Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    |  | Litigation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    |  | On May 6, 2002, Damson/Birtcher Realty Income Fund-I, Damson/Birtcher
Realty Income Fund-II, and Real Estate Income Partners III (the
Partnerships), their general partners and all other remaining
defendants entered into a settlement agreement with the named plaintiffs
in the Bigelow/Diversified Secondary Partnership Fund 1990 litigation and
the Madison Partnership and ISA Partnership litigation. (Each of these
matters is described more fully below.) Pursuant to the settlement
agreement, the general partners and their insurer will contribute
$2,500,000 to the Partnerships for distribution to all current limited
partners according to an allocation formula that guarantees that the
settlement amount received by the limited partners, plus all remaining
funds available for distribution by the Partnerships, will be at least 6%
more than the amount the limited partners received pursuant to the
defendants 2000 settlement offer. Plaintiffs counsel will apply to the
court for an award of attorneys fees, costs and expenses not to exceed
$1,000,000, to be paid

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##### Table of Contents



DAMSON/BIRTCHER REALTY INCOME FUND-I

NOTES TO FINANCIAL STATEMENTS  UNAUDITED (Contd.)



|(3) |  | Commitments and Contingencies (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Litigation (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|    |  | out of the settlement funds, with the attorneys fees portion of the
application not to exceed $900,000. The general partners and the other
remaining defendants have agreed to take no position on this application.
Plaintiffs counsel also intend to apply to the court for incentive
awards to the plaintiffs, not to exceed $30,000 in aggregate, which will
be deducted from the award of attorneys fees. In exchange, both cases
will be dismissed with prejudice and class members will release the
Partnerships, their general partners and other defendants and their
affiliates and insurers from any and all claims.                                                                                                                                                                                                                                                                                                         
|   
|    |  | The settlement has been submitted to the
Superior Court of the State of California for the County of Orange
for preliminary approval. Assuming it gives preliminary approval, the
Court then will authorize the Partnership to mail notice of the
proposed settlement to all class members. If the members of the
class wish to obtain the benefits of the settlement, they need do
nothing in response to the notice. If any member of the class wishes
to oppose the settlement, that member must make his or her objections
known by filing a written statement with the Superior Court by a
date certain in mid-June, which date will be specified in the notice.
The settlement is subject to final approval by the Superior Court of
the State of California, plus dismissal with prejudice of the Bigelow
action by the Delaware Chancery Court.                                                                                    
|   
|    |  | The settlement agreement contemplates final approval of the settlement
and a final distribution of cash to limited partners in September 2002.
We anticipate that the Partnerships will shortly thereafter wind up their
operations, deregister their partnership interests under the Securities
Exchange Act of 1934 and complete their dissolution.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | So far as is known to the General Partner, the Partnership is not 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 L.P. 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 Partnership consent solicitation dated
February 18, 1997 relating to the proposal to liquidate the Partnerships
properties and dissolve the Partnership. 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.
|   
|    |  | In September 1998, Bigelow/Diversified Secondary Partnership 1990 filed
suit in the Delaware Chancery Court against Damson/Birtcher Partners,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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##### Table of Contents



DAMSON/BIRTCHER REALTY INCOME FUND-I

NOTES TO FINANCIAL STATEMENTS  UNAUDITED (Contd.)



|(3) |  | Commitments and Contingencies (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Litigation (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|    |  | Bigelow/Diversified Secondary Partnerships Fund 1990 Litigation (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    |  | 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.                                                                                                                                                                                                                                                                                                                          
|   
|    |  | In March 2000, defendants informed the Court and plaintiff that they
would bring a Motion for Summary Judgment against the named plaintiff
based upon the allegations set forth in plaintiffs complaint. On April
4, 2000, plaintiff filed its First Amended Class Action and Derivative
Complaint against Damson/Birtcher Partners, Birtcher Investors,
Birtcher/Liquidity Properties, Birtcher Partners, Birtcher Properties,
Birtcher Ltd., Birtcher Investments, BREICORP, L.F. Special Fund II,
L.P., L.F. Special Fund I, L.P., Liquidity Fund Asset Management, Inc.,
Arthur Birtcher, Ronald Birtcher, Robert Anderson, Richard G. Wollack and
Brent R. Donaldson, the Partnership, Damson/Birtcher Realty Income
Fund-II and Real Estate Income Partners III, alleging breach of fiduciary
duty, breach of contract, and a derivative claim for breach of fiduciary
duty. Defendants have answered the First Amended Complaint.
|   
|    |  | In October 2000, the Partnership and the General Partner entered into a
settlement agreement with Grape Investors, LLC, one of the Partnerships
limited partners, pursuant to which Grape Investors agreed to accept a
distribution of its ratable share of the funds held by the Partnership to
settle this lawsuit and all other claims (including the Madison
Partnership and ISA Partnership litigation referred to below). As the
holder of an approximate 7.95% limited partner interest, Grape Investors
was the single largest limited partner interest holder.                                                                                                                                                                                                                                                                                                                                                                 
|   
|    |  | On October 27, 2000, defendants sought permission of the court to
communicate an offer to settle to individual limited partners of the
Partnership. Plaintiffs counsel opposed that motion. On December 4,
2000, the court ruled that defendants could communicate an offer to
settle to individual limited partners. The distribution to Grape was
approximately $576,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|    |  | Thereafter, on December 12, 2000, the Partnership and the General Partner
mailed to the limited partners an offer to settle this lawsuit and all
other claims (including the Madison Partnership and ISA Partnership
Litigation referenced below) for payment of each settling limited
partners pro rata share of the proceeds available for distribution from
liquidation of the Partnerships properties (approximately $75 per $1,000
of original investment interest) plus a nominal payment of $1.00 from the                                                                                                                                                                                                                                                                                                                                                                                                                      

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##### Table of Contents



DAMSON/BIRTCHER REALTY INCOME FUND-I

NOTES TO FINANCIAL STATEMENTS  UNAUDITED (Contd.)



|(3) |  | Commitments and Contingencies (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Litigation (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|    |  | Bigelow/Diversified Secondary Partnerships Fund 1990 Litigation (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|    |  | General Partner for an assignment of all of a settling limited partners
interest in the Partnership to the General Partner. Limited partners
holding approximately 43.94% of the interests (including the Grape
Investors Settlement) in the Partnership settled on these terms.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|    |  | The aggregate distribution in connection with the December 12, 2000
offer, which was reflected as an accrual at December 31, 2000, was
approximately $2,830,000. It was paid in full in January 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|    |  | On March 6, 2001, all of the defendants other than the Partnership and
the general partner filed a motion to be dismissed from the case.
Plaintiff filed responsive papers. The court held oral argument in July
2001, and in a Memorandum Opinion dated December 4, 2001, dismissed all
of the defendants (other than the Partnership and the General Partner)
from the breach of contract claims.                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|    |  | On December 4, 2001, the Partnership and the General Partner mailed to
the limited partners a second offer to settle this lawsuit and all other
claims (including the Madison Partnership and ISA Partnership Litigation
referenced below) for payment of each settling limited partners pro rata
share of the proceeds available for distribution from liquidation of the
Partnerships properties (approximately $65 per $1,000 of original
investment interest) plus a nominal payment of $1.00 from the General
Partner for an assignment of all of a settling limited partners interest
in the Partnership to the General Partner. As of December 31, 2001,
limited partners holding 4.66% of the interests in the Partnership
settled on these terms and an additional 7.26% settled on February 28,
2002.   
|   
|    |  | The aggregate distribution in connection with the December 4, 2001 offer,
was approximately $748,000, of which $292,000 was paid on December 31,
2001 and $456,000 was paid on February 28, 2002. Limited partners holding
a total aggregate of approximately 55.86% of the interests in the
Partnership have now settled.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|    |  | 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, LF 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

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##### Table of Contents



DAMSON/BIRTCHER REALTY INCOME FUND-I

NOTES TO FINANCIAL STATEMENTS  UNAUDITED (Contd.)



|(3) |  | Commitments and Contingencies (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | Litigation (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | Madison Partnership and ISA Partnership Litigation (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|    |  | 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.                                                                                                                                                                                                                                                                             
|   
|    |  | On August 14, 2000, plaintiffs petitioned the court for an order
certifying the action as a class action. Plaintiffs also asked the court
to issue a writ mandating that the Partnership immediately distribute all
liquidation proceeds to the limited partners. On December 19, 2000, the
court denied both motions. The case is currently proceeding only as a
derivative action. At a status conference on May 25, 2001, the plaintiffs
asked for the court to set a trial date approximately one year later. The
court set the trial for May 6, 2002.                                                                                                                                                                
|   
|    |  | On August 10, 2001, defendants filed a motion for summary adjudication of
plaintiffs claim for breach of fiduciary duty. The motion was heard on
September 11, 2001. On December 2, 2001, the court granted defendants
motion and dismissed plaintiffs claim for breach of fiduciary duty.                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|    |  | On March 4, 2002, defendants filed a motion for summary adjudication of
their sole remaining claim for breach of contract. On April 2, 2002, the
court granted this motion and dismissed the action against all defendants
except the general partner, its partners and Arthur B. Birtcher.                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|    |  | On March 15, 2002, plaintiffs filed a motion for leave to file a second
amended complaint, based upon allegations of breach of contract,
intentional interference with contractual relations and intentional
interference with prospective economic advantage. The court denied this
motion on April 9, 2002.                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|    |  | As noted above, limited partners holding approximately 55.86% of the
interests in the Partnership have settled this (and all other) cases
against the Partnership and the General Partner as of February 28, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(4) |  | Accrued Expenses for Liquidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|    |  | Accrued expenses for liquidation as of March 31, 2002, includes estimates
of costs to be incurred in carrying out the dissolution and liquidation of
the Partnership through September 10, 2002. These costs include estimates
of legal fees, accounting fees, tax preparation and filing fees and other
professional services. During the three months ended March 31, 2002, the
Partnership incurred $138,000 of such expenses. The General Partner
re-evaluated the estimated costs to wind up and dissolve the Partnership
given the pending settlement of the on-going litigation. The provision for
liquidation expenses was accordingly reduced by $408,000 to reflect the
projected liquidation in September 2002.

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##### Table of Contents



DAMSON/BIRTCHER REALTY INCOME FUND-I

NOTES TO FINANCIAL STATEMENTS  UNAUDITED (Contd.)



|(4) |  | Accrued Expenses for Liquidation (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    |  | The actual costs could vary from the related provisions due to the
uncertainty involved in making such projections and the fact that any
delays may increase future costs.                                                                                                                                                                                                                                                                                                                            
|   
|(5) |  | Subsequent Event                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|    |  | In April 2002, it was determined that the Partnerships transfer agent
mistakenly overpaid distributions to five limited partners as part of the
December 31, 2000 litigation settlement. The overpayments totaled
approximately $224,000. The transfer agent has agreed to seek recovery of
these funds at its own expense, and to make full restitution to the
Partnership. As of May 13, 2002, the transfer agent has
recovered and returned to the Partnership $215,000 from two limited
partners.

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DAMSON/BIRTCHER REALTY INCOME FUND-I




|        |  |                                                                                      
|------- |  | -------------------------------------------------------------------------------------
|ITEM 2. |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Liquidity and Capital Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Sale of the Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | The Partnership sold five of its six remaining properties during the year
ended December 31, 1999 and sold its last property, on May 31, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | Other Matters                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | The Partnership made no regular distributions during the year ended
December 31, 2001 or during the three months ended March 31, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | As of May 31, 2000, the Partnership had sold all of its operating
properties. Two lawsuits remain pending against the Partnership and its
General Partner and certain of its affiliates that seek, among other
things, unspecified monetary damages. The Partnership Agreement mandates
that the General Partner provide for all of the Partnerships liabilities
and obligations, including contingent liabilities, before distributing
liquidation proceeds to its partners. Therefore, the amount and timing of
any distribution of liquidation proceeds will be determined by the
General Partner in light of these and other relevant considerations. See
Legal Proceedings for further discussion.
|
| |  | Results of Operations for the Three Months Ended March 31, 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | The Partnership completed the sale of all of its remaining properties in
four separate transactions during 1999 and 2000. 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, 2002, interest income was
approximately $15,000 as compared to $57,000 for the three months ended
March 31, 2001. The decreases in interest income were reflective of the
decrease in cash and cash equivalent balances that resulted from the cash
distributed to the limited partners in conjunction with the offer to
settle and a lower rate-of-return on Certificates of Deposit.                                                                                                                                                                                                                                                                               
|
| |  | Accrued expenses for liquidation as of March 31, 2002, include estimates
of costs to be incurred in carrying out the dissolution and liquidation of
the Partnership through September 10, 2002. These costs include estimates
of legal fees, accounting fees, tax preparation and filing fees and other
professional services. The General Partner re-evaluated the estimated
costs to wind up and dissolve the Partnership given the pending settlement
of the on-going litigation. The provision for liquidation expenses was
accordingly reduced by $408,000 to reflect the projected liquidation in
September 2002.                                                                                   
|
| |  | The actual costs could vary from the related provisions due to the
uncertainty involved in making such projections and the fact that any
delays may increase future costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

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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, 2002 (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | Liquidation expenses incurred for the three months ended March 31, 2002
include charges of $3,000 from the General Partner and its affiliates for
services rendered in connection with administering the affairs of the
Partnership. Also included in liquidation expenses incurred for the three
months ended March 31, 2002 are direct charges of $135,000, related to
audit fees, tax preparation fees, legal and professional fees, costs
incurred in providing information to the Limited Partners and other
miscellaneous costs.




|        |  |                                                           
|------- |  | ----------------------------------------------------------
|ITEM 3. |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

| |                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As of March 31, 2002, the Partnership had cash equivalents of $1,952,000
invested in interest-bearing certificates of deposit. These investments
are subject to interest rate risk due to changes in interest rates upon
maturity. Declines in interest rates over time would reduce Partnership
interest income.

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DAMSON/BIRTCHER REALTY INCOME FUND-I




PART II. OTHER INFORMATION




|        |  |                  
|------- |  | -----------------
|ITEM 1. |  | LEGAL PROCEEDINGS

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On May 6, 2002, Damson/Birtcher Realty Income Fund-I, Damson/Birtcher
Realty Income Fund-II, and Real Estate Income Partners III (the
Partnerships), their general partners and all other remaining defendants
entered into a settlement agreement with the named plaintiffs in the
Bigelow/Diversified Secondary Partnership Fund 1990 litigation and the
Madison Partnership and ISA Partnership litigation. (Each of these matters
is described more fully below.) Pursuant to the settlement agreement, the
general partners and their insurer will contribute $2,500,000 to the
Partnerships for distribution to all current limited partners according to
an allocation formula that guarantees that the settlement amount received
by the limited partners, plus all remaining funds available for
distribution by the Partnerships, will be at least 6% more than the amount
the limited partners received pursuant to the defendants 2000 settlement
offer. Plaintiffs counsel will apply to the court for an award of
attorneys fees, costs and expenses not to exceed $1,000,000, to be paid
out of the settlement funds, with the attorneys fees portion of the
application not to exceed $900,000. The general partners and the other
remaining defendants have agreed to take no position on this application.
Plaintiffs counsel also intend to apply to the court for incentive awards
to the plaintiffs, not to exceed $30,000 in aggregate, which will be
deducted from the award of attorneys fees. In exchange, both cases will
be dismissed with prejudice and class members will release the
Partnerships, their general partners and other defendants and their
affiliates and insurers from any and all claims.
|
| | The settlement has been submitted to the
Superior Court of the State of California for the County of Orange
for preliminary approval. Assuming it gives preliminary approval, the
Court then will authorize the Partnership to mail notice of the
proposed settlement to all class members. If the members of the
class wish to obtain the benefits of the settlement, they need do
nothing in response to the notice. If any member of the class wishes
to oppose the settlement, that member must make his or her objections
known by filing a written statement with the Superior Court by a
date certain in mid-June, which date will be specified in the notice.
The settlement is subject to final approval by the Superior Court of
the State of California, plus dismissal with prejudice of the Bigelow
action by the Delaware Chancery Court.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | The settlement agreement contemplates final approval of the settlement and
a final distribution of cash to limited partners in September 2002. We
anticipate that the Partnerships will shortly thereafter wind up their
operations, deregister their partnership interests under the Securities
Exchange Act of 1934 and complete their dissolution.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | So far as is known to the General Partner, the Partnership is not 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 L.P. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

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DAMSON/BIRTCHER REALTY INCOME FUND-I



|ITEM 1. |  | LEGAL PROCEEDINGS (Contd.)
|------- |  | ---------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Bigelow/Diversified Secondary Partnerships Fund 1990 Litigation (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| | 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 Partnership consent solicitation dated February 18, 1997
relating to the proposal to liquidate the Partnerships properties and
dissolve the Partnership. 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.                                                                                                                                                                                                                                                                                                             
|
| | In September 1998, Bigelow/Diversified Secondary Partnership 1990 filed
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.                                                                                                                                                                            
|
| | In March 2000, defendants informed the Court and plaintiff that they would
bring a Motion for Summary Judgment against the named plaintiff based upon
the allegations set forth in plaintiffs complaint. On April 4, 2000,
plaintiff filed its First Amended Class Action and Derivative Complaint
against Damson/Birtcher Partners, Birtcher Investors, Birtcher/Liquidity
Properties, Birtcher Partners, Birtcher Properties, Birtcher Ltd.,
Birtcher Investments, BREICORP, L.F. Special Fund II, L.P., L.F. Special
Fund I, L.P., Liquidity Fund Asset Management, Inc., Arthur Birtcher,
Ronald Birtcher, Robert Anderson, Richard G. Wollack and Brent R.
Donaldson, the Partnership, Damson/Birtcher Realty Income Fund-II and Real
Estate Income Partners III, alleging breach of fiduciary duty, breach of
contract, and a derivative claim for breach of fiduciary duty. Defendants
have answered the First Amended Complaint.
|
| | In October 2000, the Partnership and the General Partner entered into a
settlement agreement with Grape Investors, LLC, one of the Partnerships
limited partners, pursuant to which Grape Investors agreed to accept a
distribution of its ratable share of the funds held by the Partnership to
settle this lawsuit and all other claims (including the Madison
Partnership and ISA Partnership litigation referred to below). As the
holder of an approximate 7.95% limited partner interest, Grape Investors
was the single largest limited partner interest holder.                                                                                                                                                                                                                                                                                                                                                                 
|
| | On October 27, 2000, defendants sought permission of the court to
communicate an offer to settle to individual limited partners of the
Partnership. Plaintiffs counsel opposed that motion. On December 4, 2000,
the court ruled that defendants could communicate an offer to settle to
individual limited partners. The distribution to Grape was approximately
$576,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

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DAMSON/BIRTCHER REALTY INCOME FUND-I



|ITEM 1. |  | LEGAL PROCEEDINGS (Contd.)
|------- |  | ---------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Bigelow/Diversified Secondary Partnerships Fund 1990 Litigation (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | Thereafter, on December 12, 2000, the Partnership and the General Partner
mailed to the limited partners an offer to settle this lawsuit and all
other claims (including the Madison Partnership and ISA Partnership
Litigation referenced below) for payment of each settling limited
partners pro rata share of the proceeds available for distribution from
liquidation of the Partnerships properties (approximately $75 per $1,000
of original investment interest) plus a nominal payment of $1.00 from the
General Partner for an assignment of all of a settling limited partners
interest in the Partnership to the General Partner. Limited partners
holding approximately 43.94% of the interests (including the Grape
Investors Settlement) in the Partnership settled on these terms.             
|
| | The aggregate distribution in connection with the December 12, 2000 offer,
which was reflected as an accrual at December 31, 2000, was approximately
$2,830,000. It was paid in full in January 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | On March 6, 2001, all of the defendants other than the Partnership and the
general partner filed a motion to be dismissed from the case. Plaintiff
filed responsive papers. The court held oral argument in July 2001, and in
a Memorandum Opinion dated December 4, 2001, dismissed all of the
defendants (other than the Partnership and the General Partner) from the
breach of contract claims.                                                                                                                                                                                                                                                                                                                                                                                                               
|
| | On December 4, 2001, the Partnership and the General Partner mailed to the
limited partners a second offer to settle this lawsuit and all other
claims (including the Madison Partnership and ISA Partnership Litigation
referenced below) for payment of each settling limited partners pro rata
share of the proceeds available for distribution from liquidation of the
Partnerships properties (approximately $65 per $1,000 of original
investment interest) plus a nominal payment of $1.00 from the General
Partner for an assignment of all of a settling limited partners interest
in the Partnership to the General Partner. As of December 31, 2001,
limited partners holding 4.66% of the interests in the Partnership settled
on these terms and an additional 7.26% settled on February 28, 2002.
|
| | The aggregate distribution in connection with the December 4, 2001 offer,
was approximately $748,000, of which $292,000 was paid on December 31,
2001 and $456,000 was paid on February 28, 2002. Limited partners holding
a total aggregate of approximately 55.86% of the interests in the
Partnership have now settled.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | 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, LF 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,                                                                                                                                                                                                                                                         

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DAMSON/BIRTCHER REALTY INCOME FUND-I



|ITEM 1. |  | LEGAL PROCEEDINGS (Contd.)
|------- |  | ---------------------------

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Madison Partnership and ISA Partnership Litigation (Contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| | 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.
|
| | On August 14, 2000, plaintiffs petitioned the court for an order
certifying the action as a class action. Plaintiffs also asked the court
to issue a writ mandating that the Partnership immediately distribute all
liquidation proceeds to the limited partners. On December 19, 2000, the
court denied both motions. The case is currently proceeding only as a
derivative action. At a status conference on May 25, 2001, the plaintiffs
asked for the court to set a trial date approximately one year later. The
court set the trial for May 6, 2002.                                                                                                                                               
|
| | On August 10, 2001, defendants filed a motion for summary adjudication of
plaintiffs claim for breach of fiduciary duty. The motion was heard on
September 11, 2001. On December 2, 2001, the court granted defendants
motion and dismissed plaintiffs claim for breach of fiduciary duty.                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | On March 4, 2002, defendants filed a motion for summary adjudication of
their sole remaining claim for breach of contract. On April 2, 2002, the
court granted this motion and dismissed the action against all defendants
except the general partner, its partners and Arthur B. Birtcher.                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | On March 15, 2002, plaintiffs filed a motion for leave to file a second
amended complaint, based upon allegations of breach of contract,
intentional interference with contractual relations and intentional
interference with prospective economic advantage. The court denied this
motion on April 9, 2002.                                                                                                                                                                                                                                                                                                                                                                                            
|
| | As noted above, limited partners holding approximately 55.86% of the
interests in the Partnership have settled this (and all other) cases
against the Partnership and the General Partner as of February 28, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|




|ITEM 6. |  | EXHIBITS AND REPORTS ON FORM 8-K
|------- |  | --------------------------------



| | a) |  | Exhibits: None                                                               
| | -- |  | -----------------------------------------------------------------------------
|
| | b) |  | Reports on Form 8-K: None filed during the three months ended March 31,
2002.

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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
(General Partner) |  | By:                                    | BIRTCHER PARTNERS,
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, 2002                               |  |                                        |                                                           |                                                                                                             |                                                                                             | By:                                                                                                                  | /s/  Robert M. Anderson
        Robert M. Anderson
Executive Director
BREICORP
|     
|      |                                            |  | By:                                    | LF Special Fund I, L.P.,
a California limited partnership
|     
|      |                                            |  |                                        | By:                                                       | Liquidity Fund Asset Management, Inc.,
a California corporation, General
Partner of LF Special Fund I, L.P.
|     
|Date: | May 14, 2002                               |  |                                        |                                                           | By:                                                                                                         | /s/ Brent R. DonaldsonBrent R. Donaldson
President
Liquidity Fund Asset Management, Inc.   

17