<PAGE>   1
                                   FORM 10-Q
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For Quarter Ended                March 31, 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>   2

                      DAMSON/BIRTCHER REALTY INCOME FUND-I
                          QUARTERLY REPORT ON FORM 10-Q
                    FOR THE THREE MONTHS ENDED MARCH 31, 2001

                                      INDEX

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

Item 1.  Financial Statements

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

         Statements of Changes of Net Assets in Liquidation -
         Three Months Ended March 31, 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>   3

                          PART I. FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS


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


<TABLE>
<CAPTION>
                                                      March 31,      December 31,
                                                        2001             2000
                                                     ----------      -----------
ASSETS (Liquidation Basis):                          (unaudited)
<S>                                                  <C>              <C>
Cash and cash equivalents                            $3,804,000       $6,734,000
Cash held in escrow                                      86,000           86,000
Receivables, net                                         38,000          103,000
                                                     ----------       ----------

   Total Assets                                       3,928,000        6,923,000
                                                     ----------       ----------

LIABILITIES (Liquidation Basis):

Distributions payable                                        --        2,830,000
Accounts payable and accrued liabilities                 48,000          155,000
Accrued expenses for liquidation                        661,000          776,000
                                                     ----------       ----------

   Total Liabilities                                    709,000        3,761,000
                                                     ----------       ----------

Net Assets in Liquidation                            $3,219,000       $3,162,000
                                                     ==========       ==========
</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>
                                                  FOR THE THREE MONTHS ENDED
                                                          MARCH 31,

                                                  2001                 2000
                                               ------------        ------------
<S>                                            <C>                 <C>
Net assets in liquidation at
 beginning of period                           $  3,162,000        $ 16,122,000
                                               ------------        ------------

Increase (decrease) during period:
Operating activities:
  Property operating
    income (loss), net                                   --             (82,000)
  Interest income                                    57,000             102,000
                                               ------------        ------------

                                                     57,000              20,000
                                               ------------        ------------

Liquidating activities:
  Distributions to partners                              --          (9,000,000)
  Provision for liquidation expenses                     --             (25,000)
                                               ------------        ------------

                                                         --          (9,025,000)
                                               ------------        ------------

Net increase (decrease) in assets
 in liquidation                                      57,000          (9,005,000)
                                               ------------        ------------

Net assets in liquidation at
 end of period                                 $  3,219,000        $  7,117,000
                                               ============        ============
</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, 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 March
        31, 2001 and 2000, the Partnership incurred approximately $3,000 and
        $13,000, 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. Such fees amounted to approximately $0 and
        $6,000 for the three months ended March 31, 2001 and 2000. In addition,
        an affiliate of the General Partner received $0 and $23,000 for the
        three months ended March 31, 2001 and 2000, respectively, as
        reimbursement of costs of on-site property management personnel and
        other reimbursable costs.

        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
        Partnership's properties. Appraised value was determined by the General
        Partner's estimate of fair value. Such fees for the three months ended
        March 31, 2001 and 2000, amounted to $0 and $5,000, respectively. Due to
        the sale of all of the Partnership's properties, it no longer pays asset
        management fees.

    (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:

                                      -5-
<PAGE>   6

                      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

    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,

                                      -6-
<PAGE>   7

                      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.)

    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) in the Partnership settled on
    these terms.

    The aggregate distribution in connection with the December 12, 2000 offer,
    which was reflected as an accrual at December 31, 2000, was approximately
    $2,830,000. It has been paid in full as of March 31, 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 has
    filed responsive papers. The court has not yet set a hearing date for this
    motion.

    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

                                      -7-
<PAGE>   8

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

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

    Litigation (Cont'd.)

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

    not appear in the action. The Partnership itself is not named as a
    defendant. The case was 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 alleged 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 sought 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 defendants' motion to dismiss the case for lack of personal
    jurisdiction, and dismissed the case.

    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

                                      -8-
<PAGE>   9

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

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

    Litigation (Cont'd.)

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

    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. The court has set a status conference for May 25, 2001.

    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 March 31, 2001, includes estimates of
    costs to be incurred in carrying out the dissolution and liquidation of the
    Partnership through December 31, 2001. 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 March 31, 2001, the Partnership incurred $115,000 of
    such expenses.

    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 December 31, 2001). 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>   10

                      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.

    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.


                                      -10-
<PAGE>   11

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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

    Other Matters

    The Partnership made no regular distributions during the year ended December
    31, 2000 or in the period ended March 31, 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, which was reflected as an
    accrual at December 31, 2000, was approximately $2,830,000. It has been paid
    in full as of March 31, 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 preliminary
    discovery phase, there is unavoidable uncertainty regarding their ultimate
    resolution. The Partnership Agreement mandates that the General Partner
    provide for all of the Partnership's liabilities and obligations, including
    contingent liabilities, before distributing liquidation proceeds to its
    partners.

    Therefore, the amount and timing of any distribution of liquidation proceeds
    will be determined by the General Partner in light of these and other
    relevant considerations. 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.

                                      -11-
<PAGE>   12

                      DAMSON/BIRTCHER REALTY INCOME FUND-I


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


    Results of Operations for the Three Months Ended March 31, 2001

    Because the Partnership was in the process of liquidating its assets through
    May 2000, 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.

    Interest income resulted from the temporary investment of Partnership
    working capital. For the three months ended March 31, 2001, interest income
    was approximately $57,000. The decrease in interest income was 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.

    Accrued expenses for liquidation as of March 31, 2001, includes estimates of
    costs to be incurred in carrying out the dissolution and liquidation of the
    Partnership through December 31, 2001. 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 year ended December 31, 2000, given the uncertainty involved with the
    ongoing litigation, the General Partner continuously re-evaluated the
    estimated costs to wind up and dissolve the Partnership. The provision for
    liquidation expenses was therefore revised to reflect those 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. The
    accrued expenses for liquidation do not take into consideration the possible
    outcome of the ongoing litigation (aside from estimated attorney fees
    through December 31, 2001). Such costs are unknown and are not estimable at
    this time.

    Liquidation expenses incurred for the three months ended March 31, 2001,
    include charges of $3,000 from the General Partner and its affiliates for
    services rendered in connection with administering the affairs of the
    Partnership. Also included in liquidation expenses incurred for the three
    months ended March 31, 2001, are direct charges of $112,000, 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.


ITEM 3. QUANTITATIVE AND QUALITATIVE MARKET RISK DISCLOSURES

    As of March 31, 2001, the Partnership had cash equivalents of $3,710,000
    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>   13

                      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,

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                      DAMSON/BIRTCHER REALTY INCOME FUND-I


ITEM 1. LEGAL PROCEEDINGS (Cont'd.)

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

    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) in the Partnership settled on
    these terms.

    The aggregate distribution in connection with the December 12, 2000 offer,
    which was reflected as an accrual at December 31, 2000, was approximately
    $2,830,000. It has been paid in full as of March 31, 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 has
    filed responsive papers. The court has not yet set a hearing date for this
    motion.

    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 was
    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

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                      DAMSON/BIRTCHER REALTY INCOME FUND-I


ITEM 1. LEGAL PROCEEDINGS (Cont'd.)

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

    Amended Petition alleged 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 sought 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 defendants' motion to dismiss the case for lack of personal
    jurisdiction, and dismissed the case.

    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 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.
    The court has set a status conference for May 25, 2001.

    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.

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                      DAMSON/BIRTCHER REALTY INCOME FUND-I


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

    a)  Exhibits:

        None.

    b)  Reports on Form 8-K:

        None filed during the three months ended March 31, 2001.

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                      DAMSON/BIRTCHER REALTY INCOME FUND-I


                                   SIGNATURES


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


                                 DAMSON/BIRTCHER REALTY INCOME FUND-I


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

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

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

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

Date: May 14, 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: May 14, 2001                       By: /s/ Brent R. Donaldson
                                             -----------------------------------
                                             Brent R. Donaldson
                                             President
                                             Liquidity Fund Asset Management,
                                             Inc.

                                       17