<PAGE>

                                    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    September 30, 2001
                  ------------------------


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


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


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


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


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


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


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


                                  Yes  X     No
                                      ---       ---



<PAGE>

                      DAMSON/BIRTCHER REALTY INCOME FUND-I
                          QUARTERLY REPORT ON FORM 10-Q
                  FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001


                                      INDEX


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

Item 1.        Financial Statements

                 Statements of Net Assets in Liquidation - September 30, 2001
                 (Unaudited) and December 31, 2000 (Audited)......................................... 3

                 Statements of Changes of Net Assets in Liquidation -
                 Three and Nine Months Ended September 30, 2001 and 2000 (Unaudited)................. 4

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

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

Item 3.        Quantitative and Qualitative Market Risk Disclosures..................................12


PART II.       OTHER INFORMATION.....................................................................13
</TABLE>





                                       2
<PAGE>

                          PART I. FINANCIAL INFORMATION


ITEM 1.        FINANCIAL STATEMENTS


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


<TABLE>
<CAPTION>
                                                    September 30,    December 31,
                                                         2001            2000
                                                    -------------    ------------
<S>                                                 <C>              <C>
ASSETS (Liquidation Basis):                          (unaudited)

Cash and cash equivalents                            $3,724,000       $6,734,000
Cash held in escrow                                      86,000           86,000
Receivables, net                                         24,000          103,000
                                                     ----------       ----------

   Total Assets                                       3,834,000        6,923,000
                                                     ----------       ----------

LIABILITIES (Liquidation Basis):

Distributions payable                                        --        2,830,000
Accounts payable and accrued liabilities                104,000          155,000
Accrued expenses for liquidation                        914,000          776,000
                                                     ----------       ----------

   Total Liabilities                                  1,018,000        3,761,000
                                                     ----------       ----------

Net Assets in Liquidation                            $2,816,000       $3,162,000
                                                     ==========       ==========
</TABLE>



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




                                       3
<PAGE>

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


<TABLE>
<CAPTION>
                                      THREE MONTHS ENDED             NINE MONTHS ENDED
                                         SEPTEMBER 30,                  SEPTEMBER 30,
                                     2001            2000            2001            2000
                                 -----------     -----------     -----------     ------------
<S>                              <C>             <C>             <C>             <C>
Net assets in liquidation at
 beginning of period             $ 2,863,000     $ 7,209,000     $ 3,162,000     $ 16,122,000
                                 -----------     -----------     -----------     ------------
Increase (decrease) during
 period:
Operating activities:
  Property operating
   loss, net                              --              --              --         (144,000)
  Interest income                     35,000         116,000         140,000          260,000
  Other expense, net                      --         (13,000)             --          (13,000)
                                 -----------     -----------     -----------     ------------

                                      35,000         103,000         140,000          103,000
                                 -----------     -----------     -----------     ------------

Liquidating activities:
  Gain on sale of real estate             --              --              --          151,000
  Distributions to partners               --              --          (2,000)      (9,000,000)
  Provision for liquidation
   expenses                          (82,000)       (117,000)       (484,000)        (181,000)
                                 -----------     -----------     -----------     ------------

                                     (82,000)       (117,000)       (486,000)      (9,030,000)
                                 -----------     -----------     -----------     ------------
Net increase (decrease) in
 assets in liquidation               (47,000)        (14,000)       (346,000)      (8,927,000)
                                 -----------     -----------     -----------     ------------

Net assets in liquidation at
 end of period                   $ 2,816,000     $ 7,195,000     $ 2,816,000     $  7,195,000
                                 ===========     ===========     ===========     ============
</TABLE>



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




                                       4
<PAGE>

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


NOTES TO FINANCIAL STATEMENTS - UNAUDITED

(1)     Accounting Policies

        The financial statements of Damson/Birtcher Realty Income Fund-I (the
        "Partnership") included herein have been prepared by the General
        Partner, without audit, pursuant to the rules and regulations of the
        Securities and Exchange Commission. These financial statements include
        all adjustments which are of a normal recurring nature and, in the
        opinion of the General Partner, are necessary for a fair presentation.
        Certain information and footnote disclosures normally included in
        financial statements prepared in accordance with generally accepted
        accounting principles have been condensed or omitted, pursuant to the
        rules and regulations of the Securities and Exchange Commission. These
        financial statements should be read in conjunction with the financial
        statements and notes thereto included in the Partnership's annual report
        on Form 10-K for the year ended December 31, 2000.

        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. The Partnership's sold Terracentre, 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
        September 30, 2001 and 2000, the Partnership incurred approximately
        $2,000 and $9,000, respectively of such costs. For the nine months there
        ended, these costs amounted to $7,000 and $71,000, respectively.

        An affiliate of the General Partner provided property management
        services with respect to the Partnership's properties and received a fee
        for such services not to exceed 3% of the gross receipts from the
        properties under management. The Partnership no longer pays property
        management fees or reimbursements since it has sold all of its
        properties. Such fees amounted to approximately $0 and $0 for the three
        months ended September 30, 2001 and 2000 and $0 and $10,000 for the nine
        months there ended. In addition, an affiliate of the General Partner
        received $0 and $3,000 for the three months ended September 30, 2001 and
        2000, respectively, as reimbursement of costs of on-site property
        management personnel and other reimbursable costs. For the nine months
        there ended, such reimbursements were $0 and $46,000, respectively.

        The amended Partnership Agreement provides for the Partnership's payment
        to the General Partner of an annual asset management fee equal to .25%
        for 2001 and .35% for 2000 of the aggregate appraised value of the




                                       5
<PAGE>

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

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

        Partnership's properties. Appraised value was determined by the General
        Partner's estimate of fair value. Since the Partnership has sold all of
        its properties, it no longer pays an asset management fee. Such fees for
        the three months ended September 30, 2001 and 2000, amounted to $0 and
        $0, and for the nine months there ended, they amounted to $0 and $9,000,
        respectively.

(3)     Commitments and Contingencies

        Litigation

        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 Consent Solicitation dated February
        18, 1997. On April 18, 1997, the court denied the plaintiff's motion for
        a preliminary injunction. On June 10, 1997, the court dismissed the
        plaintiff's complaint on the basis of lack of personal jurisdiction and
        forum non conveniens.

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

        In September 1998, Bigelow/Diversified Secondary Partnership 1990
        informed the Partnership that it was filing suit in the Delaware
        Chancery Court against Damson/Birtcher Partners, Birtcher Investors,
        Birtcher Liquidity Properties, Birtcher Investments, BREICORP, LF
        Special Fund I, LP, LF Special Fund II. LP, Arthur Birtcher, Ronald
        Birtcher, Robert Anderson,




                                       6
<PAGE>

                      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.)

        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, 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. Plaintiff has
        engaged in preliminary discovery.

        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.

        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 Liquidity
        Investors 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 Partners for an assignment of
        all of a settling limited partner's interest in the Partnership to the
        General Partner. Limited partners holding 47% of the interests
        (including the Grape Settlement, see Form 10-K for year ended December
        31, 2000) in the Partnership settled on these terms. The aggregate
        distribution in connection with the December 12, 2000 offer 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 partners filed a motion to be dismissed from the case.
        Plaintiff filed responsive papers. The court held oral argument on the
        matter, and has taken the matter under submission.




                                       7
<PAGE>

                      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

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

        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 October 16, 2001. The court has taken the matter under submission.

        As noted above, limited partners holding 47% of the interests in the
        Partnership have settled this (and all other) cases against the
        Partnership and the General Partner.

(4)     Accrued Expenses for Liquidation

        Accrued expenses for liquidation as of September 30, 2001, includes
        estimates of costs to be incurred in carrying out the dissolution and
        liquidation of the Partnership through September 30, 2002. These costs
        include estimates of legal fees, accounting fees, tax preparation and
        filing fees and other professional services. During the three and nine
        months ended September 30, 2001, the Partnership incurred $121,000 and
        $346,000, respectively, of such expenses.




                                       8
<PAGE>

                      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 significantly from the related provisions due
       to the uncertainty related to the ongoing litigation discussed in note 3.
       The accrued expenses for liquidation do not take into consideration the
       possible outcome of the ongoing litigation (aside from estimated attorney
       fees through September 30, 2002). Such costs are unknown and are not
       estimable at this time.

       The Partnership is seeking reimbursement of certain litigation expenses
       and indemnity for any potential liability from its insurers. To date, the
       insurers have refused to reimburse any expenses and have denied coverage
       for potential liability, subject to a reservation of rights to reconsider
       their decision.





                                       9
<PAGE>

                      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. The Partnership's sold Terracentre, its
        last property, on May 31, 2000.

        Other Matters

        The Partnership made no regular distributions during the year ended
        December 31, 2000 or during the nine months ended September 30, 2001.
        Regular distributions for the year ended December 31, 1999, represented
        net cash flow generated from the operation of the Partnership's
        properties and interest earned on the temporary investment of working
        capital, net of capital reserve requirements. On December 8, 1999, the
        Partnership made a special distribution of $13,300,000, representing a
        portion of the proceeds from the sale of five of its six remaining
        properties. Another special distribution of $9,000,000 was made on March
        1, 2000.

        On October 19, 2000, Grape settled its portion of the purported class
        action lawsuits entitled "Bigelow/Diversified Secondary Partnerships
        Fund 1990 Litigation" and "Madison Partnership and ISA Partnership
        Litigation" (the "Grape Settlement"). In exchange for a complete
        settlement and release from Grape, the Partnership paid Grape its pro
        rata share of the proceeds available for distribution from the
        liquidation of the Partnership's properties. Grape's final distribution
        was $576,000, or approximately $75 per $1,000 of original investment.
        The General Partner also paid $1.00 for all of Grape's interest in the
        Partnership.

        On December 12, 2000, the Partnership and the General Partner mailed to
        the limited partners an offer to settle the "Bigelow/Diversified
        Secondary Partnerships Fund 1990 Litigation" and "Madison Partnership
        and ISA Partnership Litigation" and all other claims 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 Partners for an assignment of
        all of a settling limited partner's interest in the Partnership to the
        General Partner. Limited partners holding 47% (including the Grape
        Settlement) of the interests in the Partnership settled on these terms.
        The aggregate distribution in connection with the December 12, 2000
        offer was approximately $2,830,000. It was paid in full in January 2001.

        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. Since these cases are in the
        discovery phase, there is unavoidable uncertainty regarding their
        ultimate resolution. The Partnership Agreement mandates that the General




                                       10
<PAGE>

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

        Other Matters (Cont'd.)

        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. Due to these uncertainties, it is
        probable that future distributions will be limited to a liquidating
        distribution upon Partnership wind down should funds be available at
        that time.

        Results of Operations for the Three and Nine Months Ended
        September 30, 2001

        The Partnership completed the sale of five of its six remaining
        properties in three separate transactions during 1999 and sold its last
        property on May 31, 2000. The Partnership's operating results have been
        reflected on the Statements of Changes of Net Assets in Liquidation.

        For the three months ended September 30, 2001, interest income was
        approximately $35,000 as compared to $116,000 for the three months ended
        September 30, 2000. For the nine months there ended, interest income
        amounted to $140,000 and $260,000, respectively. 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 September 30, 2001, include
        estimates of costs to be incurred in carrying out the dissolution and
        liquidation of the Partnership through September 30, 2002. These costs
        include estimates of legal fees, accounting fees, tax preparation and
        filing fees and other professional services. Given the uncertainty
        involved with the ongoing litigation, the General Partner has
        continuously re-evaluated the estimated costs to wind up and dissolve
        the Partnership. At September 30, 2001, the provision for liquidation
        expenses was increased by $82,000 to reflect those revised estimates and
        the pending trial date in May 2002 (see Item 1, Legal Proceedings, for
        further discussion).

        The actual costs could vary significantly from the related provisions
        due to the uncertainty related to the length of time required to
        complete the liquidation and dissolution and the complexities which may
        arise. The accrued expenses for liquidation do not take into
        consideration the possible outcome of the ongoing litigation (aside from
        estimated attorney fees through September 30, 2002). Such costs are
        unknown and are not estimable at this time.

        Liquidation expenses incurred for the three and nine months ended
        September 30, 2001 include charges of $2,000 and $7,000, respectively,




                                       11
<PAGE>

                      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 and Nine Months Ended
        September 30, 2001 (Cont'd.)

        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 and nine months
        ended September 30, 2001 are direct charges of $118,000 and $318,000,
        respectively, relating to audit fees, tax preparation fees, legal and
        professional fees, costs incurred in providing information to the
        Limited Partners and other miscellaneous costs.

        Other expense for the three and nine months ended September 30, 2000,
        resulted from the write off of several miscellaneous uncollectable
        tenant receivables ($7,000) and other minor expenses.

ITEM 3. QUANTITATIVE AND QUALITATIVE MARKET RISK DISCLOSURES

        As of September 30, 2001, the Partnership had cash equivalents of
        $3,490,000 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.




                                       12
<PAGE>

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        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 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 Consent Solicitation dated February
        18, 1997. On April 18, 1997, the court denied the plaintiff's motion for
        a preliminary injunction. On June 10, 1997, the court dismissed the
        plaintiff's complaint on the basis of lack of personal jurisdiction and
        forum non conveniens.

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

        In September 1998, Bigelow/Diversified Secondary Partnership 1990
        informed the Partnership that it was filing suit in the Delaware
        Chancery Court against Damson/Birtcher Partners, Birtcher Investors,
        Birtcher Liquidity Properties, Birtcher Investments, BREICORP, LF
        Special Fund I, LP, LF Special Fund II. LP, Arthur Birtcher, Ronald
        Birtcher, Robert Anderson, Richard G. Wollack and Brent R. Donaldson
        alleging a purported class action on behalf of the limited partners of
        Damson/Birtcher Realty Income Fund-I, Damson/Birtcher Realty Income
        Fund-II and Real Estate Income Partners III alleging breach of fiduciary
        duty and incorporating the allegations set forth in the previously
        dismissed March 25, 1997 complaint filed in the Court of Chancery of
        Philadelphia County.

        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,




                                       13
<PAGE>

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


ITEM 1. LEGAL PROCEEDINGS (Cont'd.)

        Bigelow/Diversified Secondary Partnership's Fund 1990
        Litigation (Cont'd.)

        Bigelow/Diversified Secondary Partnership Fund 1990 filed a 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. Plaintiff has
        engaged in preliminary discovery.

        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.

        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 Liquidity
        Investors 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 Partners for an assignment of
        all of a settling limited partner's interest in the Partnership to the
        General Partner. Limited partners holding 47% of the interests
        (including the Grape Settlement, see Form 10-K for year ended December
        31, 2000) in the Partnership settled on these terms.

        The aggregate distribution in connection with the December 12, 2000
        offer 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 partners filed a motion to be dismissed from the case.
        Plaintiff filed responsive papers. The court held oral argument on the
        matter, and has taken the matter under submission.

        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 Madison Partnership and ISA Partnership Litigation in
        the California Superior Court in Orange County, California against
        Damson Birtcher Partners, Birtcher/Liquidity Properties, Birtcher
        Partners, Birtcher Investors, Birtcher Investments, Birtcher Limited,
        Breicorp LP Special Fund II, L.P., Liquidity Fund Asset Management,
        Inc., Robert M. Anderson, Brent R. Donaldson, Arthur B. Birtcher, Ronald
        E. Birtcher, and Richard G. Wollack, Defendants, and Damson/Birtcher
        Realty Income Fund-I, Damson/Birtcher Realty




                                       14
<PAGE>

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


ITEM 1. LEGAL PROCEEDINGS (Cont'd.)

        Madison Partnership and ISA Partnership Litigation (Cont'd.)

        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 October 16, 2001. The court has taken the matter under submission.

        As noted above, limited partners holding 47% of the interests in the
        Partnership have settled this (and all other) cases against the
        Partnership and the General Partner.

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 September 30, 2001.




                                       15
<PAGE>

                                   SIGNATURES


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


<TABLE>
<S>                                   <C>
                                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

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

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

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

Date:   November 14, 2001                                 By:  /s/Robert M. Anderson
                                                               ---------------------
                                                               Robert M. Anderson
                                                               Executive Director
                                                               BREICORP

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

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

Date:   November 14, 2001                       By:  /s/ Brent R. Donaldson
                                                     ----------------------
                                                     Brent R. Donaldson
                                                     President
                                                     Liquidity Fund Asset Management, Inc.
</TABLE>




                                       16


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