<PAGE>   1

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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


For Quarter Ended               June 30, 2000
                  --------------------------------------------------------------


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


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


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


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


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


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


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


                             Yes  X      No
                                 ---        ---

<PAGE>   2

                      DAMSON/BIRTCHER REALTY INCOME FUND-I

                          QUARTERLY REPORT ON FORM 10-Q
                    FOR THE THREE MONTHS ENDED JUNE 30, 2000

                                      INDEX

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

Item 1.  Financial Statements

         Statements of Net Assets in Liquidation - June 30, 2000
         (Unaudited)and December 31, 1999 (Audited)........................    3

         Statements of Changes of Net Assets in Liquidation -
         Three and Six Months Ended June 30, 2000 and 1999 (Unaudited).....    4

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

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations.....................   12

Item 3.  Quantitative and Qualitative Market Risk Disclosures..............   18


PART II. OTHER INFORMATION.................................................   18
</TABLE>


                                       2
<PAGE>   3

                          PART I. FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS

                      DAMSON/BIRTCHER REALTY INCOME FUND-I

                     STATEMENTS OF NET ASSETS IN LIQUIDATION

<TABLE>
<CAPTION>
                                               June 30,       December 31,
                                                 2000            1999
                                              ----------      -----------
                                             (unaudited)
<S>                                           <C>             <C>
ASSETS (Liquidation Basis):
---------------------------

Properties                                    $       --      $ 5,980,000
Cash and cash equivalents                      7,115,000       10,137,000
Cash held in escrow                              301,000          512,000
Accounts receivable, net                          33,000           18,000
Other assets                                      33,000           38,000
                                              ----------      -----------

    Total Assets                               7,482,000       16,685,000
                                              ----------      -----------

LIABILITIES (Liquidation Basis):
--------------------------------

Accounts payable and accrued liabilities          31,000          134,000
Accrued expenses for liquidation                 242,000          429,000
                                              ----------      -----------

    Total Liabilities                            273,000          563,000
                                              ----------      -----------

Net Assets in Liquidation                     $7,209,000      $16,122,000
                                              ==========      ===========
</TABLE>


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


                                       3
<PAGE>   4

                      DAMSON/BIRTCHER REALTY INCOME FUND-I

               STATEMENTS OF CHANGES OF NET ASSETS IN LIQUIDATION
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                       Three Months Ended                 Six Months Ended
                                                            June 30,                          June 30,
                                                 ----------------------------       ----------------------------
                                                    2000             1999               2000            1999
                                                 -----------     ------------       ------------    ------------
<S>                                              <C>             <C>                <C>             <C>
Net assets in liquidation at beginning
  of period                                      $ 7,117,000     $ 30,926,000       $ 16,122,000    $ 30,796,000

Increase (decrease) during period:
  Operating activities:
    Property operating income (loss), net            (62,000)         800,000           (144,000)      1,466,000
    Interest income                                   42,000            3,000            144,000           7,000
    General and administrative expenses                   --         (244,000)                --        (451,000)
    Interest expense on mortgage payable                  --          (55,000)                --        (111,000)
    Leasing commissions                                   --          (55,000)                --         (66,000)
                                                 -----------     ------------       ------------    ------------

                                                     (20,000)         449,000                 --         845,000
                                                 -----------     ------------       ------------    ------------

  Liquidating activities:
    Gain on sale of real estate                      151,000               --            151,000              --
    Liquidation expenses                             (39,000)              --            (64,000)             --
    Adjustment to the carrying value
      of real estate                                      --       (1,717,000)                --      (1,717,000)
    Distributions to partners                             --         (314,000)        (9,000,000)       (580,000)
                                                 -----------     ------------       ------------    ------------

                                                     112,000       (2,031,000)        (8,913,000)     (2,297,000)
                                                 -----------     ------------       ------------    ------------

Net increase (decrease) in assets
  in liquidation                                      92,000       (1,582,000)        (8,913,000)     (1,452,000)
                                                 -----------     ------------       ------------    ------------

Net assets in liquidation at end of period       $ 7,209,000     $ 29,344,000       $  7,209,000    $ 29,344,000
                                                 ===========     ============       ============    ============
</TABLE>


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


                                       4
<PAGE>   5

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


NOTES TO FINANCIAL STATEMENTS - UNAUDITED

(1)      Accounting Policies

         The financial statements of Damson/Birtcher Realty Income Fund-I (the
         "Partnership") included herein have been prepared by the General
         Partner, without audit, pursuant to the rules and regulations of the
         Securities and Exchange Commission. These financial statements include
         all adjustments which are of a normal recurring nature and, in the
         opinion of the General Partner, are necessary for a fair presentation.
         Certain information and footnote disclosures normally included in
         financial statements prepared in accordance with generally accepted
         accounting principles have been condensed or omitted, pursuant to the
         rules and regulations of the Securities and Exchange Commission. These
         financial statements should be read in conjunction with the financial
         statements and notes thereto included in the Partnership's annual
         report on Form 10-K for the year ended December 31, 1999.

         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 (see Note 5).

         Liquidation Basis of Accounting

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

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

         Segment Reporting

         The Partnership adopted Statement of Financial Accounting Standards No.
         131, "Disclosures About Segments of an Enterprise and Related
         Information" ("SFAS 131"). SFAS 131 requires, among other items, that a
         public business enterprise report a measure of segment profit or loss,
         certain specific revenue and expense items, segment assets, information
         about the revenues derived from the enterprise's products or services
         and major customers. SFAS 131 also requires


                                       5
<PAGE>   6

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

(1)      Accounting Policies (Cont'd.)

         Segment Reporting (Cont'd.)

         that the enterprise report descriptive information about the way that
         the operating segments were determined and the products and services
         provided by the operating segments. Given that the Partnership is in
         the process of liquidation, the Partnership has identified only one
         operating business segment which is the business of asset liquidation.
         The adoption of SFAS 131 did not have an impact on the Partnership's
         financial reporting.

         Rental income from FISERV, Inc. (formerly d.b.a. Citicorp CIR, Inc.)
         totaled $255,000 for the three months ended June 30, 1999, or
         approximately 18% of the Partnership's total rental income. For the six
         months ended June 30 1999, such rental income amounted to $516,000 or
         19% of the Partnership's total rental income. Oakpointe Business
         Center, which FISERV, Inc. formerly occupied was sold in September
         1999.

         Earnings Per Unit

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

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

(2)      Transactions with Affiliates

         The Partnership has no employees and, accordingly, the General Partner
         and its affiliates perform services on behalf of the Partnership in
         connection with administering the affairs of the Partnership. The
         General Partner and 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 June
         30, 2000 and 1999, the Partnership incurred approximately $49,000 and
         $52,000, respectively. Such costs were $62,000 and $85,000 for the six
         months there ended.

         An affiliate of the General Partner provides property management
         services with respect to the Partnership's properties and receives a
         fee for such services not to exceed 3% of the gross receipts from the
         properties under management. Such fees amounted to approximately $4,000
         and $42,000 for the three months ended June 30, 2000 and 1999 and
         $10,000 and $85,000 for the six months there ended. In addition, an
         affiliate of the General Partner received $21,000 and $85,000 for


                                       6
<PAGE>   7

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

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

         the three months ended June 30, 2000 and 1999, respectively, as
         reimbursement of costs of on-site property management personnel and
         other reimbursable costs. For the six months there ended, such
         reimbursements were $43,000 and $171,000, respectively.

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

         The amended Partnership Agreement provides for the Partnership's
         payment to the General Partner of an annual asset management fee equal
         to .35% for 2000 and .45% for 1999 of the aggregate appraised value of
         the Partnership's properties. Appraised value was determined by the
         General Partner's estimate of fair value. Such fees for the three
         months ended June 30, 2000 and 1999, amounted to $9,000 and $39,000,
         respectively. For the six months there ended, such fees were $9,000 and
         $79,000, respectively. Since the Partnership has sold all of its
         properties, the Partnership no longer pays an asset management fee.

         The amended Partnership Agreement provides for the Partnership's
         payment to the General Partner of a property disposition fee if and to
         the extent that the sale price of the property in question, net of any
         brokerage commissions (but not other costs of sale), exceeds the
         appraised value of the property as of January 1993. For the three and
         six months ended June 30, 2000, a fee of $130,000 was earned and paid
         on the sale of Terracentre.

         In addition, the amended Partnership Agreement provides for payment to
         the General Partner of a leasing fee for services rendered in
         connection with leasing space in a Partnership property after the
         expiration or termination of leases. Fees for leasing services for the
         three months ended June 30, 2000 and 1999, amounted to $0 and $17,000,
         respectively. For the six months there ended, such fees were $0 and
         $18,000, respectively.

(3)      Commitments and Contingencies

         Litigation

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

         Bigelow/Diversified Secondary Partnership's Fund 1990 Litigation

         On March 25, 1997, a limited partner named Bigelow/Diversified
         Secondary Partnership Fund 1990 L.P. filed a purported class action
         lawsuit in the Court of Common Pleas of Philadelphia County against
         Damson/Birtcher Partners, Birtcher


                                       7
<PAGE>   8

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

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

         Litigation (Cont'd.)

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

         Investors, Birtcher/Liquidity Properties, Birtcher Investments, L.F.
         Special Fund II, L.P., L.F. Special Fund I, L.P., Arthur Birtcher,
         Ronald Birtcher, Robert Anderson, Richard G. Wollack and Brent R.
         Donaldson alleging breach of fiduciary duty and breach of contract and
         seeking to enjoin the Consent Solicitation dated February 18, 1997. On
         April 18, 1997, the court denied the plaintiff's motion for a
         preliminary injunction. On June 10, 1997, the court dismissed the
         plaintiff's complaint on the basis of lack of personal jurisdiction and
         forum non conveniens.

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

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

         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
         14, 2000, 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,


                                       8
<PAGE>   9

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

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

         Litigation (Cont'd.)

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

         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.

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

         This action was filed on September 25, 1998 in the District Court of
         Oklahoma County for the State of Oklahoma against the Partnership's
         general partner, Damson/Birtcher Partners, other related defendants and
         numerous unrelated defendants. Damson/Birtcher Partners and other
         related defendants were brought into the action in late December 1998,
         when they were served with the Second Amended Petition. The other
         related defendants are Birtcher Partners, Birtcher Properties, The
         Birtcher Group, Birtcher American Properties, Arthur B. Birtcher,
         Ronald E. Birtcher, LF Special Fund II, L.P., and Liquidity Fund Asset
         Management Inc., but The Birtcher Group and Birtcher American
         Properties were served with process and did not appear in the action.
         The Partnership itself is not named as a defendant. The case is a class
         action brought on behalf of investors in the Partnership who purchased
         limited partnership interests from May 7, 1984 to September 17, 1985.
         The Second Amended Petition alleges breach of contract, intentional and
         negligent misrepresentation, breach of fiduciary duties, and violations
         of various Oklahoma and federal statutes in connection with the sale of
         the limited partnership interests. Plaintiff seeks unspecified
         compensatory damages and $10 million in punitive damages.

         Damson/Birtcher Partners and the related defendants removed the case to
         the United States District Court for the Western District of Oklahoma,
         and filed a motion to dismiss the case for lack of personal
         jurisdiction or, alternatively, to transfer the action to the United
         States District Court for the Central District of California, for the
         convenience of the parties and witnesses and in the interests of
         justice. Plaintiff moved to remand the case back to the Oklahoma state
         court. The court denied plaintiff's motion for removal, and took
         defendant's motion to dismiss or transfer under submission pending
         receipt of additional information the court ordered plaintiff to
         provide. On March 29, 2000, the court entered its order granting
         defendant's motion to dismiss the case for lack of personal
         jurisdiction, and dismissed the case.

         Madison Partnership and ISA Partnership Litigation

         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,


                                       9
<PAGE>   10

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

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

         Litigation (Cont'd.)

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

         L.P., Liquidity Fund Asset Management, Inc., Robert M. Anderson, Brent
         R. Donaldson, Arthur B. Birtcher, Ronald E. Birtcher, and Richard G.
         Wollack, Defendants, and Damson/Birtcher Realty Income Fund-I,
         Damson/Birtcher Realty Income Fund-II, and Real Estate Income Partners
         III, Nominal Defendants. The complaint asserts claims for breach of
         fiduciary duty and breach of contract. The gravamen of the complaint is
         that the General Partners of these limited partnerships have not
         undertaken all reasonable efforts to expedite liquidation of the
         Partnerships' properties and to maximize the returns to the
         Partnerships' limited partners. The complaint seeks unspecified
         monetary damages, attorneys' fees and litigation expenses, and an order
         for dissolution of the partnerships and appointment of an independent
         liquidating trustee. The Partnership moved to stay or dismiss the case
         on the grounds that the pending Bigelow class action, discussed above,
         raises essentially the same claims. The court granted the Partnership's
         motion and ordered a stay of the litigation pending re-evaluation at a
         May 23, 2000 status conference. The court lifted the stay on May 23,
         2000. Plaintiffs have initiated document discovery. A status conference
         is currently scheduled for September 8, 2000.

(4)      Accrued Expenses for Liquidation

         Accrued expenses for liquidation as of June 30, 2000, include estimates
         of costs to be incurred in carrying out the dissolution and liquidation
         of the Partnership. These costs include estimates of legal fees,
         accounting fees, tax preparation and filing fees, other professional
         services and the general partner's liability insurance. During the
         three months ended June 30, 2000, the Partnership incurred $153,000 of
         such expenses. At June 30, 2000, the General Partner re-evaluated the
         estimated costs to wind up and dissolve the Partnership given the
         uncertainty involved with the ongoing litigation. The provision for
         liquidation expenses was accordingly increased by an additional $39,000
         to reflect the revised estimates.

         The actual costs could vary significantly from the related provisions
         due to the uncertainty related to the length of time required to
         complete the liquidation and dissolution and the complexities which may
         arise in disposing of the Partnership's remaining assets. The accrued
         expenses for liquidation do not take into consideration the possible
         outcome of the ongoing litigation. Such costs are unknown and are not
         estimable at this time.

(5)      Gain on Sale of Real Estate

         On May 31, 2000, the Partnership sold Terracentre, in Denver, Colorado
         to Robert E. Collawn ("Collawn"), a Denver real estate developer and
         operator, for $6,500,000. The Partnership realized a gain on the sale
         of $151,000, in excess of its carrying value, after deducting for
         closing costs and prorations totaling


                                       10
<PAGE>   11

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

(5)      Gain on Sale of Real Estate (Cont'd.)

         approximately $294,000. Collawn is not affiliated in any way with the
         Partnership, its General Partner or the General Partner's affiliates.

         The Partnership was represented by a third-party broker in the
         transaction. The broker was paid $227,500 from the sale proceeds. The
         General Partner earned and was paid a disposition fee of $130,000 in
         connection with the transaction. Collawn will not hire the General
         Partner or any affiliate to perform asset management or property
         management services for this property.


                                       11
<PAGE>   12

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

         Liquidity and Capital Resources

         Since the completion of its acquisition program in September 1985, the
         Partnership has been engaged in the operation of its properties. The
         Partnership's original objective had been to hold its properties as
         long-term investments. However, an Information Statement, dated May 5,
         1993, mandated that the General Partner seek a vote of the Limited
         Partners no later than December 31, 1996, regarding prompt liquidation
         of the Partnership in the event that properties with appraised values
         as of January 1993 which constituted at least one half of the aggregate
         appraised values of all Partnership properties as of that date were not
         sold or under contract for sale by the end of 1996. Given the mandate
         of the May 5, 1993 Information Statement, as of December 31, 1995, the
         General Partner decided to account for the Partnership's properties as
         assets held for sale, instead of for investment. In a Consent
         Solicitation dated February 18, 1997, the Partnership solicited and
         received the consent of the Limited Partners on March 14, 1997 to
         dissolve the Partnership and sell and liquidate all of its remaining
         properties as soon as practicable, consistent with selling the
         Partnership's properties to the best advantage under the circumstances.
         The Partnership's properties were held for sale throughout 1999 and
         five of its six remaining properties were sold by year-end. The
         Partnership's remaining property was sold on May 31, 2000.

         In November 1998, the Partnership entered into a definitive Purchase
         and Sale Agreement with Abbey Investments, Inc. to sell all the
         Partnership's properties for a range between $34,500,000 and
         $36,000,000, depending on final occupancy rates at the time of closing.
         However, in January 1999, the agreement was terminated because Abbey
         had requested a material reduction in the purchase price (approximately
         11%), which the Partnership did not agree to.

         On April 30, 1999, the Partnership and Praedium Performance Fund IV
         ("Praedium") executed a Purchase and Sale Agreement to sell all of the
         Partnership's properties except Terracentre to Praedium for
         $31,700,000. Praedium deposited $243,100 into escrow, pending
         completion of its due diligence inspection and review. Praedium's
         contingency period expired on June 14, 1999. During and after the
         contingency period, Praedium, in a series of negotiations with the
         Partnership, sought reductions in the purchase price of each of the
         properties and declined to include the Cornerstone, Ladera-I and
         Certified in its offers. During this time, the General Partner
         negotiated with Praedium, and also sought other purchasers for the
         properties, both individually and as a group. Finally, in late July
         1999, the Partnership declined Praedium's offer to purchase only
         Cornerstone, Oakpointe and Washington Tech for a materially reduced
         purchase price and terminated its dealings with Praedium.

         Sale of the Properties

         During the three month period ended September 30, 1999, the Partnership
         sold four of its six properties in two separate transactions, and
         subsequently sold The Cornerstone on October 15, 1999 and Terracentre
         on May 31, 2000, as set forth below:


                                       12
<PAGE>   13

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

         Liquidity and Capital Resources (Cont'd.)

         Sale of the Properties (Cont'd)

         Ladera-I

         On September 22, 1999, the Partnership sold Ladera-I shopping center,
         in Albuquerque, New Mexico to CA New Mexico, LLC, a wholly-owned
         subsidiary of CenterAmerica Trust ("CenterAmerica"), a Houston-based
         real estate investment trust that is not affiliated in any way with the
         Partnership, its General Partner or any of its principals or
         affiliates. The sale price was $4,424,000.

         CenterAmerica and the Partnership were each represented by third-party
         brokers in the transaction. The brokers were paid an aggregate $186,800
         from the sale proceeds. The General Partner was not paid a disposition
         fee in connection with the transaction. CenterAmerica did not hire the
         General Partner or any affiliate to perform asset management or
         property management services for this property.

         The Rubin Pachulsky Dew Transaction

         On September 23, 1999, the Partnership sold Certified Warehouse and
         Distribution Center, in Salt Lake City, Utah, Oakpointe Business
         Center, in Arlington Heights, Illinois, and Washington Technical
         Center, in Renton, Washington to Rubin Pachulsky Dew Properties, LLC
         ("Rubin Pachulsky Dew") for $5,100,000, $5,600,000 and $3,950,000,
         respectively, or an aggregate purchase price of $14,650,000. Rubin
         Pachulsky Dew is a third-party real estate investment entity that is
         not affiliated in any way with the Partnership, its General Partner or
         any of its principals or affiliates.

         Rubin Pachulsky Dew was represented by a third-party broker in the
         transaction. The broker was paid $146,500 from the sale proceeds. Since
         the sale price of Washington Technical Center exceeded the January 1,
         1993 appraised value ($3,400,000), pursuant to the 1993 Amendment of
         the Partnership Agreement, the General Partner earned and was paid a
         property disposition fee of $98,750 in connection with the sale of that
         property.

         Rubin Pachulsky Dew has hired an affiliate of Birtcher as property
         manager for the properties for a fee that is approximately the same as
         the fee the Partnership previously paid to the General Partner for
         property management. In addition, Rubin Pachulsky Dew has hired an
         affiliate of Birtcher to provide certain asset management services for
         the properties, and will pay an incentive fee approximately equal to
         10% of the profits, if any, after Rubin Pachulsky Dew has received a
         15% cumulative annual return on its investment. The incentive fee, if
         earned, is not payable until the last property is sold or four years
         from date of purchase, whichever comes first. The property management
         agreement is cancelable at any time upon 60 days notice, but the
         incentive fee will survive termination of the contract.


                                       13
<PAGE>   14

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

         Liquidity and Capital Resources (Cont'd.)

         Sale of the Properties (Cont'd)

         The Rubin Pachulsky Dew Transaction (Cont'd.)

         A portion of the proceeds from the sale of the properties to Rubin
         Pachulsky Dew continues to be held in escrow. A sum equal to two and
         one-half percent of the purchase price was held back as a potential
         source of payment for any claims that may arise related to a
         Partnership breach of certain representations and warranties related to
         the sale (expiring on September 23, 2000) and for any litigation costs
         that may arise (released to the Partnership on March 23, 2000). The
         remaining cash held in escrow relates to holdbacks for tenant
         improvements and tax prorations. The cash held in escrow has been
         included in the calculation of loss on sale of real estate.

         The Cornerstone

         On October 15, 1999, Damson/Birtcher Realty Income Fund-I (the
         "Partnership") sold The Cornerstone shopping center, in Tempe, Arizona
         to GDA Real Estate Services, LLC ("GDA"), a Denver-based real estate
         developer and operator that is not affiliated in any way with the
         Partnership, its General Partner or the General Partner's affiliates,
         for a sale price of $8,500,000.

         GDA was represented by two third-party brokers in the transaction. The
         brokers were paid $170,000 from the sale proceeds. The General Partner
         was not paid a disposition fee in connection with the transaction. GDA
         will not hire the General Partner or any affiliate to perform asset
         management or property management services for this property.

         Terracentre

         On March 24, 1999, the Partnership signed a Purchase and Sale Agreement
         to sell Terracentre for $6,450,000 to Halcyon Real Estate, Inc.
         ("Halcyon"), a local Denver real estate development company. During its
         due diligence period Halcyon asked to extend its contingency period to
         address zoning and land-use changes with the city of Denver (it
         apparently wanted to change the site from office to residential
         condominium use). The General Partner did not accept the request for
         extension. Halcyon thereupon asked to reduce the purchase price from
         $6,450,000 to $4,500,000. The Partnership rejected this request and
         terminated its dealings with Halcyon.

         On June 18, 1999, the Partnership entered into a Purchase and Sale
         Agreement to sell Terracentre to Charles Callaway ("Callaway"), an
         unaffiliated Denver real estate developer and operator, for $6,450,000.
         The purchaser deposited $200,000 into escrow on June 21, 1999, all but
         $50,000 of which was refundable pending completion of its due diligence
         investigation. Unfortunately, at a Denver city council meeting on
         August 10, 1999, certain council members discussed condemning
         Terracentre in order to expand the adjacent convention center. The
         Callaway


                                       14
<PAGE>   15

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

         Liquidity and Capital Resources (Cont'd.)

         Sale of the Properties (Cont'd)

         Terracentre (Cont'd.)

         transaction was subsequently terminated and the deposit returned. On
         November 2, 1999, Denver voters approved a referendum in favor of
         expanding the convention center.

         On May 31, 2000, the Partnership sold Terracentre, in Denver, Colorado
         to Robert E. Collawn ("Collawn"), a Denver real estate developer and
         operator, for $6,500,000. Collawn is not affiliated in any way with the
         Partnership, its General Partner or the General Partner's affiliates.

         The Partnership was represented by a third-party broker in the
         transaction. The broker was paid $227,500 from the sale proceeds. The
         General Partner earned and was paid a disposition fee of $130,000 in
         connection with the transaction. Collawn did not hire the General
         Partner or any affiliate to perform asset management or property
         management services for this property.

         The Partnership realized approximately $6,206,000, in cash proceeds
         from the sale of Terracentre, after deducting for closing costs and
         prorations totaling approximately $294,000.

         Other Matters

         Regular distributions through 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. This last special distribution
         arose out of discussions with the named plaintiffs and their lawyers in
         the purported class action lawsuits. It represents the culmination of
         further, private discussions with representatives of Grape Investors,
         the holder of the largest investor position in the Partnership. Grape
         Investors has agreed that for a period of 24 months, it will not
         involve itself in any way or support any effort to seek, or cause
         anyone else to seek, the addition of new general partners, the
         appointment of a receiver, or the removal of the General Partner. Grape
         Investors also has agreed to either abstain or vote against any such
         action or proposal.

         As of May 31, 2000, the Partnership has 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
         preliminary discovery phase, there is unavoidable uncertainty regarding
         their ultimate resolution. The Partnership


                                       15
<PAGE>   16

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

         Liquidity and Capital Resources (Cont'd.)

         Other Matters (Cont'd.)

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

         Year 2000

         As of December 31, 1999, the Partnership's accounting systems and the
         investor services system used to track the limited partners' interests,
         distributions and tax information were tested and appeared to be free
         of year 2000 bugs. The Partnership's remaining property was also
         reviewed utilizing the Building Owners and Managers Association
         ("BOMA") industry standards as a guideline for necessary corrections
         and those corrections were successful. As of June 30, 2000, the
         Partnership did not experience any significant issues or problems
         relating to year 2000. The cost of the Partnership's accounting systems
         upgrade was borne by the General Partner and was not reimbursed by the
         Partnership.

         Results of Operations for the Three Months Ended June 30, 2000

         Because the Partnership has been liquidating its assets, a
         quarter-to-quarter comparison of the results of operations is not
         practical. As the Partnership's assets (properties) were sold, the
         results of operations have been generated from a smaller asset base,
         and therefore are not comparable. 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 June 30, 2000, the Partnership incurred an
         $62,000 net operating loss from the operation of its remaining
         property. The loss, when compared to the property operating income of
         $800,000 for the three months ended June 30, 1999, was primarily
         attributable to the sale of five of the Partnership's properties in
         September and October 1999 and the sale of Terracentre in May 2000.

         Interest income resulted from the temporary investment of Partnership
         working capital. For the three months ended June 30, 2000, interest
         income was approximately $42,000. The increase in interest income was
         reflective of the increased cash and cash equivalent balances that were
         generated from the sale of the properties.

         Accrued expenses for liquidation as of June 30, 2000, include estimates
         of costs


                                       16
<PAGE>   17

                      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 June 30, 2000
         (Cont'd.)

         to be incurred in carrying out the dissolution and liquidation of the
         Partnership. These costs include estimates of legal fees, accounting
         fees, tax preparation and filing fees, and other professional services.
         During the three months ended June 30, 2000, the Partnership incurred
         $153,000 of such expenses. At June 30, 2000, the General Partner
         re-evaluated the estimated costs to wind up and dissolve the
         Partnership given the uncertainty involved with the ongoing litigation.
         The provision for liquidation expenses was accordingly increased by an
         additional $39,000 to reflect the revised estimates. The allowance for
         accrued expenses for liquidation does not, however, reflect any costs
         of the ongoing litigation due to the uncertainty associated with those
         matters.

         Liquidation expenses incurred for the three months ended June 30, 2000,
         include charges of $58,000 from the General Partner and its affiliates
         for services rendered in connection with administering the affairs of
         the Partnership and operating the Partnership's properties. Also
         included in liquidation expenses incurred for the three months ended
         June 30, 2000, are direct charges of $66,000, relating to audit fees,
         tax preparation fees, legal fees and professional services, costs
         incurred in providing information to the Limited Partners and other
         miscellaneous costs.

         Interest expense in 1999 resulted from interest on the first deed of
         trust on Certified Distribution Center. That mortgage was retired on
         September 23, 1999 with the sale of Certified Distribution Center to
         Rubin Pachulsky Dew.


                                       17
<PAGE>   18

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


ITEM 3.  QUANTITATIVE AND QUALITATIVE MARKET RISK DISCLOSURES

         As of June 30, 2000, the Partnership had cash equivalents of $6,933,000
         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.

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

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

         Bigelow Diversified Secondary Partnership Fund 1990 litigation

         On March 25, 1997, a limited partner named Bigelow/Diversified
         Secondary Partnership Fund 1990 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


                                       18
<PAGE>   19

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


ITEM 1.  LEGAL PROCEEDINGS (Cont'd.)

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

         incorporating the allegations set forth in the previously dismissed
         March 25, 1997 complaint filed in the Court of Chancery of Philadelphia
         County. Plaintiff has engaged in preliminary discovery and the parties
         have held settlement discussions.

         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
         14, 2000, 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.

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

         This action was filed on September 25, 1998 in the District Court of
         Oklahoma County for the State of Oklahoma against the Partnership's
         general partner, Damson/Birtcher Partners, other related defendants and
         numerous unrelated defendants. Damson/Birtcher Partners and other
         related defendants were brought into the action in late December 1998,
         when they were served with the Second Amended Petition. The other
         related defendants are Birtcher Partners, Birtcher Properties, The
         Birtcher Group, Birtcher American Properties, Arthur B. Birtcher,
         Ronald E. Birtcher, LF Special Fund II, L.P., and Liquidity Fund Asset
         Management Inc., but The Birtcher Group and Birtcher American
         Properties were served with process and did not appear in the action.
         The Partnership itself is not named as a defendant. The case is a class
         action brought on behalf of investors in the Partnership who purchased
         limited partnership interests from May 7, 1984 to September 17, 1985.
         The Second Amended Petition alleges breach of contract, intentional and
         negligent misrepresentation, breach of fiduciary duties, and violations
         of various Oklahoma and federal statutes in connection with the sale of
         the limited partnership interests. Plaintiff seeks unspecified
         compensatory damages and $10 million in punitive damages.

         Damson/Birtcher Partners and the related defendants removed the case to
         the United States District Court for the Western District of Oklahoma,
         and filed a motion to dismiss the case for lack of personal
         jurisdiction or, alternatively, to transfer the action to the United
         States District Court for the Central District of California, for the
         convenience of the parties and witnesses and in the interests of
         justice. Plaintiff moved to remand the case back to the Oklahoma state
         court. The court denied plaintiff's motion for removal, and took
         defendant's motion to dismiss or transfer under submission pending
         receipt of additional information the court ordered plaintiff to
         provide. On March 29, 2000, the court entered its order granting
         defendant's motion to dismiss the case for lack of personal
         jurisdiction, and dismissed the case.


                                       19
<PAGE>   20

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


ITEM 1.  LEGAL PROCEEDINGS (Cont'd.)

         Madison Partnership and ISA Partnership Litigation

         Partnership Liquidity Investors filed a purported class and derivative
         action in the California Superior Court in Orange County, California
         against Damson Birtcher Partners, Birtcher/Liquidity Properties,
         Birtcher Partners, Birtcher Investors, Birtcher Investments, Birtcher
         Limited, Breicorp LP Special Fund II, L.P., Liquidity Fund Asset
         Management, Inc., Robert M. Anderson, Brent R. Donaldson, Arthur B.
         Birtcher, Ronald E. Birtcher, and Richard G. Wollack, Defendants, and
         Damson/Birtcher Realty Income Fund-I, Damson/Birtcher Realty Income
         Fund-II, and Real Estate Income Partners III, Nominal Defendants. The
         complaint asserts claims for breach of fiduciary duty and breach of
         contract. The gravamen of the complaint is that the General Partners of
         these limited partnerships have not undertaken all reasonable efforts
         to expedite liquidation of the Partnerships' properties and to maximize
         the returns to the Partnerships' limited partners. The complaint seeks
         unspecified monetary damages, attorneys' fees and litigation expenses,
         and an order for dissolution of the partnerships and appointment of an
         independent liquidating trustee. The Partnership moved to stay or
         dismiss the case on the grounds that the pending Bigelow class action,
         discussed above, raises essentially the same claims. The court granted
         the Partnership's motion and ordered a stay of the litigation pending
         re-evaluation at a May 23, 2000 status conference. The court lifted the
         stay on May 23, 2000. Plaintiffs have initiated document discovery. A
         status conference is currently scheduled for September 8, 2000.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits:

                  27 - Financial Data Schedule

         (b)      Reports on Form 8-K:

                  Form 8-K filed on June 13, 2000 reporting the sale of
                  Terracentre, incorporated herein by reference.


                                       20
<PAGE>   21

                      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.


<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: August 11, 2000                                                         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: August 11, 2000                                               By: /s/ Brent R. Donaldson
                                                                        -------------------------------------
                                                                        Brent R. Donaldson
                                                                        President
                                                                        Liquidity Fund Asset Management, Inc.
</TABLE>


                                       21

<PAGE>   22

                                 EXHIBIT INDEX


    Exhibit
    Number                Description
    -------               -----------

      27            Financial Data Schedule