##### Table of Contents









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 June 30, 2006.


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, or a non-accelerated
filer. See definition of accelerated filer and large
accelerated filer in
Rule 12b-2 of the
Exchange Act (check one):


Large accelerated
filer o Accelerated
filer o Non-accelerated
filer þ


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










---



##### 



DEL TACO RESTAURANT PROPERTIES II
 PAGE NUMBERPART I. FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Balance Sheets at June 30, 2006 (Unaudited) and
December 31, 2005
    
    
    3Condensed Statements of Income for the three and six months ended
June 30, 2006 and 2005 (Unaudited)
    
    
    4Condensed Statements of Cash Flows for the six months ended
June 30, 2006 and 2005 (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 4. Controls and Procedures
    
    
    12PART II. OTHER INFORMATIONItem 6. Exhibits and Reports
    
    
    13SIGNATURE
    
    
    14EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
  -2-




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM I. FINANCIAL STATEMENTS
 DEL TACO RESTAURANT PROPERTIES II
 
 CONDENSED BALANCE SHEETS
 June 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)ASSETSCURRENT ASSETS:Cash
    
    $
    183,057
    
    
    $
    198,980Receivable from Del Taco LLC
    
    
    55,976
    
    
    
    56,703Deposits
    
    
    1,989
    
    
    
    1,000Total current assets
    
    
    241,022
    
    
    
    256,683PROPERTY 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
    
    
    1,950,801
    
    
    
    1,923,7111,993,034
    
    
    
    2,020,124$
    2,234,056
    
    
    $
    2,276,807LIABILITIES AND PARTNERS EQUITYCURRENT LIABILITIES:Payable to limited partners
    
    $
    37,865
    
    
    $
    36,815Accounts payable
    
    
    13,856
    
    
    
    10,511Total current liabilities
    
    
    51,721
    
    
    
    47,326PARTNERS EQUITY:Limited partners; 27,006 units outstanding at June 30, 2006
and December 31, 2005
    
    
    2,209,562
    
    
    
    2,256,236General partner-Del Taco LLC
    
    
    (27,227
    )
    
    
    (26,755
    )2,182,335
    
    
    
    2,229,481$
    2,234,056
    
    
    $
    2,276,807
  -3-




---



##### Table of Contents



DEL TACO RESTAURANT PROPERTIES II
 
 CONDENSED STATEMENTS OF INCOME
 (Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005RENTAL REVENUES
    
    $
    164,720
    
    
    $
    179,368
    
    
    $
    324,971
    
    
    $
    346,711EXPENSES:General and administrative
    
    
    11,268
    
    
    
    12,141
    
    
    
    52,827
    
    
    
    50,881Depreciation
    
    
    13,545
    
    
    
    13,545
    
    
    
    27,090
    
    
    
    27,09024,813
    
    
    
    25,686
    
    
    
    79,917
    
    
    
    77,971Operating income
    
    
    139,907
    
    
    
    153,682
    
    
    
    245,054
    
    
    
    268,740OTHER INCOME:Interest
    
    
    753
    
    
    
    676
    
    
    
    1,479
    
    
    
    1,284Other
    
    
    300
    
    
    
    500
    
    
    
    625
    
    
    
    1,200Net income
    
    $
    140,960
    
    
    $
    154,858
    
    
    $
    247,158
    
    
    $
    271,224Net income per limited
partnership unit (note 2)
    
    $
    5.17
    
    
    $
    5.68
    
    
    $
    9.06
    
    
    $
    9.94Number of units used in computing
per unit amounts
    
    
    27,006
    
    
    
    27,006
    
    
    
    27,006
    
    
    
    27,006
  -4-




---



##### Table of Contents



DEL TACO RESTAURANT PROPERTIES II
 
 CONDENSED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Six Months EndedJune 30,2006
    
    
    2005CASH FLOWS FROM OPERATING ACTIVITIES:Net income
    
    $
    247,158
    
    
    $
    271,224Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation
    
    
    27,090
    
    
    
    27,090Changes in operating assets and liabilities:Receivable from Del Taco LLC
    
    
    727
    
    
    
    (2,795
    )Deposits
    
    
    (989
    )
    
    
    440Payable to limited partners
    
    
    1,050
    
    
    
    (1,766
    )Accounts Payable
    
    
    3,345
    
    
    
    (1,389
    )Net cash provided by operating activities
    
    
    278,381
    
    
    
    292,804CASH FLOWS FROM FINANCING ACTIVITIES:Cash distributions to partners
    
    
    (294,304
    )
    
    
    (306,558
    )Net decrease in cash
    
    
    (15,923
    )
    
    
    (13,754
    )Beginning cash balance
    
    
    198,980
    
    
    
    197,784Ending cash balance
    
    $
    183,057
    
    
    $
    184,030
  -5-




---



##### Table of Contents



DEL TACO RESTAURANT PROPERTIES II
 
 NOTES TO CONDENSED FINANCIAL STATEMENTS
 FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2006
 UNAUDITED
 NOTE 1  BASIS OF PRESENTATION
  NOTE 2  NET INCOME PER LIMITED PARTNERSHIP UNIT
   -6-




---



##### Table of Contents



DEL TACO RESTAURANT PROPERTIES II
 NOTES TO CONDENSED FINANCIAL STATEMENTS  CONTINUED
 FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2006
 UNAUDITED
 NOTE 3  LEASING ACTIVITIES
     NOTE 4  TRANSACTIONS WITH DEL TACO
    -7-




---



##### Table of Contents



DEL TACO RESTAURANT PROPERTIES II
 NOTES TO CONDENSED FINANCIAL STATEMENTS  CONTINUED
 FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2006
 UNAUDITED
 NOTE 5  DISTRIBUTIONS
  NOTE 6  PAYABLE TO LIMITED PARTNERS
  NOTE 7  ACQUISITION OF GENERAL PARTNER
  -8-




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Liquidity and Capital Resources
   Results of Operations
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Bear Valley Rd., Victorville, CA
    
    $
    29,989
    
    
    $
    32,519
    
    
    $
    59,031
    
    
    $
    62,682West Valley Blvd., Colton, CA
    
    
    35,442
    
    
    
    42,957
    
    
    
    70,253
    
    
    
    82,853Palmdale Blvd., Palmdale, CA
    
    
    19,883
    
    
    
    21,903
    
    
    
    38,969
    
    
    
    41,843DeAnza Country Shopping Center, Pedley, CA
    
    
    34,850
    
    
    
    34,139
    
    
    
    68,488
    
    
    
    65,943Varner Road, Thousand Palms, CA
    
    
    44,556
    
    
    
    47,850
    
    
    
    88,230
    
    
    
    93,390Total
    
    $
    164,720
    
    
    $
    179,368
    
    
    $
    324,971
    
    
    $
    346,711
  -9-




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations 
continued
  Percentage of TotalGeneral & Administrative ExpenseThree Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2006
    
    2005
    
    2006
    
    2005Accounting fees
    
    
    51.77
    %
    
    
    46.08
    %
    
    
    72.71
    %
    
    
    72.88
    %Distribution of information
to limited partners
    
    
    48.23
    %
    
    
    53.92
    %
    
    
    27.29
    %
    
    
    27.12
    %100.00
    %
    
    
    100.00
    %
    
    
    100.00
    %
    
    
    100.00
    %
   Significant Recent Accounting Pronouncements
  Off -Balance Sheet Arrangements
  -10-




---



##### Table of Contents



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




---



##### Table of Contents



Item 4.
    
    Controls and Procedures
 (a)
    
    Evaluation of disclosure controls and procedures:As of the end of the period covered by this quarterly report, we carried out an
evaluation, under the supervision and with the participation of the Companys management,
including the Companys Chief Executive Officer and Treasurer, of the effectiveness of
the design and operation of the Companys disclosure controls and procedures. Based upon
that evaluation, the Chief Executive Officer and Treasurer concluded that the
Companys disclosure controls and procedures are effective in timely alerting them
to material information relating to the Company required to be included in the Companys
periodic Securities and Exchange Commission filings.
 (b)
    
    Changes in internal controls:There were no significant changes in the Companys internal controls over financial
reporting that occurred during our most recent fiscal quarter that materially affected,
or is reasonably likely to materially affect, our internal control over financial
reporting.
 (c)
    
    Asset-Backed issuers:Not applicable
 -12-




---



##### Table of Contents



PART II. OTHER INFORMATION
  
  (a)
    
    Exhibits
 31.1
    
    Ronald Powell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
 (b)
    
    ReportsNone.
 -13-




---



##### Table of Contents



SIGNATURE
  DEL TACO RESTAURANT PROPERTIES II
(a California limited partnership)
Registrant
Del Taco LLC
General PartnerDate:  August 11, 2006
    /s/ Steven L. BrakeSteven L. BrakeTreasurer -14-




---



##### Table of Contents



Exhibit Index
  Exhibits
    
    Description31.1
    
    Ronald Powell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