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UNITED
    STATES
 SECURITIES
    AND EXCHANGE COMMISSION
 Washington, D.C.
    20549
 FORM
    10-Q
  (Mark
    one)
 x
    QUARTERLY
    REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934  For the quarterly
    period ended September 30, 2008.
  OR
  o
    TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934  For the
    transition period from
    
    to
     .
  Commission file
    no. 0-16190
  DEL
    TACO RESTAURANT PROPERTIES II
 a California
    limited partnership
 (Exact
    name of registrant as specified in its charter)
  California

33-0064245(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification Number)25521 Commercentre Drive, Lake Forest, California

92630(Address of principal executive
    offices)

(Zip Code)   (949) 462-9300
 (Registrants
    telephone number, including area code)
  Indicate by check
    mark whether the registrant (1) has filed all reports
    required to be filed by Section 13 or 15(d) of the
    Securities Exchange Act of 1934 during the preceding
    12 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 þ  No o
  Indicate by check
    mark whether the registrant is a large accelerated filer, an
    accelerated filer, a non-accelerated filer, or a smaller
    reporting company. See the definitions of large
    accelerated filer, accelerated filer and
    smaller reporting company in
    Rule 12b-2
    of the Exchange Act. (Check one):
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer þ
    Smaller reporting
    company o (Do
    not check if a smaller reporting company)
  Indicate by check
    mark whether the registrant is a shell company (as defined in
    Rule 12b-2
    of the Exchange
    Act).  Yes o  No þ




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##### 



DEL TACO RESTAURANT PROPERTIES II
 PAGE NUMBERPART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Balance Sheets at September 30, 2008 (Unaudited) and
December 31, 2007
    
    
    3Condensed Statements of Income for the three and nine months ended
September 30, 2008 and 2007 (Unaudited)
    
    
    4Condensed Statements of Cash Flows for the nine months ended
September 30, 2008 and 2007 (Unaudited)
    
    
    5Notes to Condensed Financial Statements (Unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    9Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    11Item 4T. Controls and Procedures
    
    
    12PART II. OTHER INFORMATIONItem 6. Exhibits
    
    
    13SIGNATURE
    
    
    14EX-31.1EX-31.2EX-32.1
  -2-




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PART I. FINANCIAL INFORMATION
 
 ITEM I. FINANCIAL STATEMENTS
 DEL TACO RESTAURANT PROPERTIES II
 
 CONDENSED BALANCE SHEETS
 September 30,
    
    
    December 31,2008
    
    
    2007(Unaudited)ASSETSCURRENT ASSETS:Cash
    
    $
    167,524
    
    
    $
    170,340Receivable from Del Taco LLC
    
    
    42,949
    
    
    
    45,631Deposits
    
    
    1,825
    
    
    
    1,534Total current assets
    
    
    212,298
    
    
    
    217,505PROPERTY AND EQUIPMENT:Land and improvements
    
    
    1,806,006
    
    
    
    1,806,006Buildings and improvements
    
    
    1,238,879
    
    
    
    1,238,879Machinery and equipment
    
    
    898,950
    
    
    
    898,9503,943,835
    
    
    
    3,943,835Lessaccumulated depreciation
    
    
    2,042,495
    
    
    
    2,015,9481,901,340
    
    
    
    1,927,887$
    2,113,638
    
    
    $
    2,145,392LIABILITIES AND PARTNERS EQUITYCURRENT LIABILITIES:Payable to limited partners
    
    $
    35,832
    
    
    $
    35,481Accounts payable
    
    
    14,604
    
    
    
    13,994Total current liabilities
    
    
    50,436
    
    
    
    49,475PARTNERS EQUITY:Limited partners; 27,006 units outstanding at September 30, 2008
and December 31, 2007
    
    
    2,091,622
    
    
    
    2,124,009General partner-Del Taco LLC
    
    
    (28,420
    )
    
    
    (28,092
    )2,063,202
    
    
    
    2,095,917$
    2,113,638
    
    
    $
    2,145,392
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DEL TACO RESTAURANT PROPERTIES II
 
 CONDENSED STATEMENTS OF INCOME
 (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007RENTAL REVENUES
    
    $
    138,200
    
    
    $
    149,224
    
    
    $
    416,233
    
    
    $
    443,547EXPENSES:General and administrative
    
    
    9,851
    
    
    
    13,381
    
    
    
    63,737
    
    
    
    66,648Depreciation
    
    
    8,849
    
    
    
    8,849
    
    
    
    26,547
    
    
    
    29,20818,700
    
    
    
    22,230
    
    
    
    90,284
    
    
    
    95,856Operating income
    
    
    119,500
    
    
    
    126,994
    
    
    
    325,949
    
    
    
    347,691OTHER INCOME:Interest
    
    
    268
    
    
    
    787
    
    
    
    967
    
    
    
    2,362Other
    
    
    600
    
    
    
    425
    
    
    
    4,175
    
    
    
    1,725Net income
    
    $
    120,368
    
    
    $
    128,206
    
    
    
    $331,091
    
    
    
    $351,778Net income per limited
partnership unit (note 2)
    
    $
    4.41
    
    
    $
    4.70
    
    
    $
    12.14
    
    
    $
    12.90Number of units used in computing
per unit amounts
    
    
    27,006
    
    
    
    27,006
    
    
    
    27,006
    
    
    
    27,006
  -4-




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DEL TACO RESTAURANT PROPERTIES II
 
 CONDENSED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Nine Months EndedSeptember 30,2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    331,091
    
    
    $
    351,778Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation
    
    
    26,547
    
    
    
    29,208Changes in operating assets and liabilities:Receivable from Del Taco LLC
    
    
    2,682
    
    
    
    2,407Deposits
    
    
    (291
    )
    
    
    152Payable to limited partners
    
    
    351
    
    
    
    (7,690
    )Accounts payable
    
    
    610
    
    
    
    1,874Net cash provided by operating activities
    
    
    360,990
    
    
    
    377,729CASH FLOWS FROM FINANCING ACTIVITIES:Cash distributions to partners
    
    
    (363,806
    )
    
    
    (381,716
    )Net decrease in cash
    
    
    (2,816
    )
    
    
    (3,987
    )Beginning cash balance
    
    
    170,340
    
    
    
    189,410Ending cash balance
    
    $
    167,524
    
    
    $
    185,423
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DEL TACO RESTAURANT PROPERTIES II
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008
 UNAUDITED
 NOTE 1  BASIS OF PRESENTATION
  NOTE 2  NET INCOME PER LIMITED PARTNERSHIP UNIT
   -6-




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DEL TACO RESTAURANT PROPERTIES II
 NOTES TO CONDENSED FINANCIAL STATEMENTS  CONTINUED
 FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008
 UNAUDITED
 NOTE 3  LEASING ACTIVITIES
    NOTE 4  TRANSACTIONS WITH DEL TACO
    -7-




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DEL TACO RESTAURANT PROPERTIES II
 NOTES TO CONDENSED FINANCIAL STATEMENTS  CONTINUED
 FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008
 UNAUDITED
 NOTE 5  DISTRIBUTIONS
  NOTE 6  PAYABLE TO LIMITED PARTNERS
  NOTE 7  CONCENTRATION OF RISK
   -8-




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Liquidity and Capital Resources
   Results of Operations
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Bear Valley Rd., Victorville, CA
    
    $
    24,992
    
    
    $
    25,907
    
    
    $
    73,350
    
    
    $
    74,245West Valley Blvd., Colton, CA
    
    
    33,061
    
    
    
    32,577
    
    
    
    96,899
    
    
    
    97,448Palmdale Blvd., Palmdale, CA
    
    
    17,230
    
    
    
    18,015
    
    
    
    50,223
    
    
    
    55,344DeAnza Country Shopping Center, Pedley, CA
    
    
    29,588
    
    
    
    37,922
    
    
    
    95,008
    
    
    
    111,404Varner Road, Thousand Palms, CA
    
    
    33,329
    
    
    
    34,803
    
    
    
    100,753
    
    
    
    105,106Total
    
    $
    138,200
    
    
    $
    149,224
    
    
    $
    416,233
    
    
    $
    443,547
  -9-




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations  continued
  Percentage of TotalGeneral & Administrative ExpenseThree Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Accounting fees
    
    
    61.31
    %
    
    
    44.32
    %
    
    
    74.80
    %
    
    
    69.24
    %Distribution of information
to limited partners
    
    
    38.69
    %
    
    
    55.68
    %
    
    
    25.20
    %
    
    
    30.76
    %100.00
    %
    
    
    100.00
    %
    
    
    100.00
    %
    
    
    100.00
    %
   Significant Recent Accounting Pronouncements
  Off -Balance Sheet Arrangements
  -10-




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations -
continued
 Critical Accounting Policies and Estimates
  Revenue Recognition:
 Property and Equipment:
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk.
  -11-




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Item 4T.
    
    Controls and Procedures
 (a)
    
    Evaluation of disclosure controls and procedures:
  (b)
    
    Changes in internal controls:
  (c)
    
    Asset-backed issuers:
  -12-




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PART II. OTHER INFORMATION
  
  (a)
    
    Exhibits
 31.1
    
    
    Nick Shepherds Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    
    Steven L. Brakes Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    
    
    Certification pursuant to subsections (a) and (b) of Section 1350,
Chapter 63 of Title 18, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
 -13-




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SIGNATURE
  DEL TACO RESTAURANT PROPERTIES II(a California limited partnership)RegistrantDel Taco LLCGeneral PartnerDate: November 14, 2008
    
    /s/ Steven L. BrakeSteven L. BrakeTreasurer
 -14-




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Exhibits
    
    Description31.1
    
    Nick Shepherds Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    Steven L. Brakes Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    
    Certification pursuant to subsections (a) and (b) of Section 1350,
Chapter 63 of Title 18, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
 -15-