UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-QSB

(Mark One)

 X  QUARTERLY REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---
ACT OF 1934


For the quarter period ended:  September 30, 2004
                               ------------------



    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---
ACT OF 1934

For the transition period from           to
                                 -------    -------

Commission file number  000-13754
                        ---------


                            MAXUS REALTY TRUST, INC.
                          ---------------------------
        (Exact name of small business issuer as specified in its charter)

         Missouri                                       43-1339136
--------------------------                      --------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                  104 Armour, North Kansas City, Missouri 64116
                  ---------------------------------------------
                    (Address of principal executive offices)

                                 (816)303-4500
                                 -------------
                (Issuer's telephone number, including area code)


Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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 [X] No [ ]

State the  number of shares  outstanding  of the  Trust's  sole  class of common
equity, $1.00 par value common stock, as of November 1, 2004: 1,291,781.









                                       1
<PAGE>



INDEX


                                                                            Page
PART I -     FINANCIAL INFORMATION

ITEM 1.      FINANCIAL STATEMENTS:
             Consolidated Balance Sheets                                       3
             Consolidated Statements of Operations                             4
             Consolidated Statements of Cash Flows                             5

ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OR
             PLAN OF OPERATION                                                10

ITEM 3.      CONTROLS AND PROCEDURES                                          18

PART II -    OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS                                                18
ITEM 2.      CHANGES IN SECURITIES AND
             SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES             19
ITEM 3.      DEFAULTS UPON SENIOR SECURITIES                                  19
ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS              19
ITEM 5.      OTHER INFORMATION                                                19
ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K                                 19

SIGNATURES                                                                    21
EXHIBIT INDEX                                                                 22














                                       2
<PAGE>



PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                            MAXUS REALTY TRUST, INC.
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                                             September 30,       December 31,
                                                                                 2004                2003
                                                                             (Unaudited)
                                                                             -----------         -----------
ASSETS:
Investment property
   Land                                                                $       1,355,000             946,000
   Buildings and improvements                                                 35,677,000          24,981,000
   Personal property                                                           2,758,000           1,981,000
                                                                             -----------         -----------
                                                                              39,790,000          27,908,000
   Less accumulated depreciation                                              (3,626,000)         (2,661,000)
                                                                             -----------         -----------
           Total investment property, net                                     36,164,000          25,247,000


Cash                                                                           4,178,000             861,000
Escrows and reserves                                                           1,188,000             598,000
Note receivable                                                                4,142,000                 ---
Accounts receivable                                                               23,000               2,000
Prepaid expenses and other assets                                                325,000             151,000
Deferred expenses, less accumulated amortization                                 443,000             225,000
                                                                             -----------         -----------
           Total                                                              46,463,000          27,084,000
Assets of property held for sale - discontinued operations                         4,000           5,023,000
                                                                             -----------         -----------
           Total assets                                                $      46,467,000          32,107,000
                                                                             ===========         ===========

LIABILITIES AND SHAREHOLDERS' EQUITY:

Liabilities:
   Mortgage notes payable                                              $      27,944,000          16,844,000
   Note payable                                                                4,142,000           4,168,000
   Accounts payable, prepaid rent, and accrued expenses                          628,000             518,000
   Real estate taxes payable                                                     483,000             197,000
   Refundable tenant deposits                                                    189,000             130,000
   Other accrued liabilities                                                   1,161,000                 ---
                                                                             -----------         -----------
           Total                                                              34,547,000          21,857,000

   Liabilities of property held for sale - discontinued operations                35,000              56,000
                                                                             -----------         -----------
           Total liabilities                                                  34,582,000          21,913,000
                                                                             ===========         ===========

Minority interest                                                                155,000                 ---
Shareholders' equity:
   Common stock, $1 par value: authorized 5,000,000 shares,
      1,292,000 and 1,242,000 shares issued and outstanding
      at September 30, 2004 and December 31, 2003, respectively                1,292,000           1,242,000
   Additional paid-in-capital                                                 17,865,000          17,309,000
   Distributions in excess of accumulated earnings                            (7,427,000)         (8,357,000)
                                                                             -----------         -----------
           Total shareholders' equity                                         11,730,000          10,194,000
                                                                             -----------         -----------
                                                                       $      46,467,000          32,107,000
                                                                             ===========         ===========
</TABLE>

See accompanying notes to consolidated financial statements.




                                       3
<PAGE>



                            MAXUS REALTY TRUST, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                          Three Months Ended              Nine Months Ended
                                                       Sept. 30,       Sept. 30,        Sept. 30,     Sept. 30,
                                                          2004            2003            2004          2003
                                                          ----            ----            ----          ----
Income
Revenues:
   Rental                                              1,338,000       1,076,000        3,660,000     3,394,000
   Other                                                 197,000         159,000          553,000       394,000
                                                     -----------     -----------      -----------   -----------

           Total revenues                              1,535,000       1,235,000        4,213,000     3,788,000
                                                     -----------     -----------      -----------   -----------

Expenses:
   Depreciation and amortization                         374,000         291,000          995,000       873,000
   Repairs and maintenance, including common
      area maintenance                                   207,000         191,000          564,000       509,000
   Real estate taxes                                      99,000          84,000          263,000       240,000
   General and administrative                             91,000          68,000          278,000       221,000
   Utilities                                             123,000         103,000          323,000       280,000
   Property management fees - related parties             76,000          62,000          206,000       185,000
   Other operating expenses                              336,000         299,000          959,000       853,000
                                                     -----------     -----------      -----------   -----------
           Total operating expenses                    1,306,000       1,098,000        3,588,000     3,161,000
                                                     -----------     -----------      -----------   -----------

           Net operating income                          229,000         137,000          625,000       627,000
                                                     -----------     -----------      -----------   -----------

   Interest income                                       (53,000)        (14,000)         (60,000)      (17,000)
   Interest expense                                      392,000         306,000          966,000       920,000
                                                     -----------     -----------      -----------   -----------
   Loss before minority interest and
       discontinued operations                          (110,000)       (155,000)        (281,000)     (276,000)
   Minority interest in continuing operations             (2,000)            ---           (2,000)          ---
                                                     -----------     -----------      -----------   -----------
   Loss from continuing operations                      (108,000)       (155,000)        (279,000)     (276,000)
   Income from discontinued operations before
       minority interest, including loss on disposal
       of $26,000 in 2003 and gain on disposal of
       $2,116,000 in 2004                              2,098,000          29,000        2,178,000       113,000
   Minority interest in discontinued operations           20,000             ---           20,000           ---
                                                     -----------     -----------      -----------   -----------
   Income from discontinued operations                 2,078,000          29,000        2,158,000       113,000
                                                     -----------     -----------      -----------   -----------

           Net income (loss)                        $  1,970,000        (126,000)       1,879,000      (163,000)
                                                     ===========     ===========      ===========   ===========

Per share data (basic and diluted):
   Loss from continuing operations                  $       (.08)           (.12)            (.22)         (.22)
   Income from discontinued operations                      1.61             .02             1.71           .09
                                                     -----------     -----------      -----------   -----------

           Total                                    $       1.53            (.10)            1.49          (.13)
                                                     ===========     ===========      ===========   ===========

   Distributions paid in current year               $        .25             .25              .75           .75
                                                     ===========     ===========      ===========   ===========

   Weighted average shares outstanding                 1,289,000       1,236,000        1,261,000     1,233,000
                                                     ===========     ===========      ===========   ===========

</TABLE>

See accompanying notes to consolidated financial statements.


                                       4
<PAGE>

                            MAXUS REALTY TRUST, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                                                             Nine Months Ended
                                                                                        Sept. 30,         Sept. 30,
                                                                                           2004             2003
                                                                                           ----             ----
Cash flows from operating activities:
   Net income (loss)                                                               $   1,879,000          (163,000)
   Adjustments to reconcile net loss to net
     cash provided by operating activities of continuing operations:
       (Income) loss from discontinued operations:                                   (2,178,000)          (113,000)
       Minority interest                                                                 18,000                ---
       Depreciation and amortization                                                    995,000            873,000
       Changes in accounts affecting operations:
           Accounts receivable                                                          (21,000)            12,000
           Prepaid expenses and other assets                                           (168,000)           (12,000)
           Escrows and reserves                                                        (481,000)             1,000
           Accounts payable and other liabilities                                       388,000            277,000
                                                                                    -----------        -----------
               Net cash provided by operating activities of continuing operations       432,000            875,000
               Net cash provided by operating activities of discontinued operations     401,000            264,000
                                                                                    -----------        -----------
               Net cash provided by operating activities                                833,000          1,139,000

Cash flows from investing activities:
       Acquisition of Terrace Apartments                                               (193,000)               ---
       Acquisition of Waverly and Arbor Gate Apartments                              (9,587,000)               ---
       Escrow - Acquisition                                                            (100,000)               ---
       Capital expenditures                                                            (276,000)          (318,000)
                                                                                    -----------        -----------
               Net cash used in investing activities of continuing operations       (10,156,000)          (318,000)
               Net cash provided by investing activities
                    of discontinued operations                                        3,791,000          4,787,000
                                                                                    -----------        -----------
               Net cash (used in) provided by investing activities                   (6,365,000)         4,469,000

Cash flows from financing activities:
       Principal payments on mortgage notes payable                                    (230,000)          (189,000)
       Proceeds from mortgage notes payable, net                                      9,445,000                ---
       Issuance of common stock                                                         606,000             94,000
       Distributions paid to shareholders                                              (949,000)          (925,000)
                                                                                    -----------        -----------
               Net cash provided by (used in) financing activities
                  of continuing operations                                            8,872,000         (1,020,000)
               Net cash used in financing activities
                  of discontinued operations                                            (23,000)        (1,410,000)
                                                                                    -----------        -----------
               Net cash provided by (used in) financing activities                    8,849,000         (2,430,000)
                                                                                    -----------        -----------

               Net increase in cash                                                   3,317,000          3,178,000

Cash, beginning of period                                                               861,000             83,000
                                                                                    -----------        -----------
Cash, end of period                                                                $  4,178,000          3,261,000
                                                                                    ===========        ===========
Supplemental disclosure of cash flow information -
   cash paid during the nine-month period for interest (includes interest
       paid for discontinued operations in 2004 and 2003)                          $  1,121,000          1,220,000
                                                                                    ===========        ===========

Items assumed in connection with acquisition of investment properties
       Investment property and other assets (Terrace)                              $  2,048,000               ---
       Mortgage notes payable and other liabilities (Terrace)                      $  1,739,000               ---

</TABLE>

See accompanying notes to consolidated financial statements.



                                       5
<PAGE>



                            MAXUS REALTY TRUST, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
           NINE MONTHS ENDED SEPTEMBER 30, 2004 AND SEPTEMBER 30, 2003
                                   (UNAUDITED)

(1) Summary of Significant Accounting Policies

Refer to the financial  statements  of Maxus Realty Trust,  Inc. (the "Trust" or
"Registrant")  for the year ended December 31, 2003,  which are contained in the
Trust's  Annual  Report on Form  10-KSB,  for a  description  of the  accounting
policies, which have been continued without change. Also, refer to the footnotes
to those statements for additional  details of the Trust's financial  condition.
The  details  in those  notes  have not  changed  except  as a result  of normal
transactions  in the  interim.  In the opinion of  management,  all  adjustments
(which include only normal  recurring  adjustments)  necessary to present fairly
the financial  position,  results of operations  and cash flows at September 30,
2004  and  for all  periods  presented  have  been  made.  The  results  for the
nine-month period ended September 30, 2004 are not necessarily indicative of the
results  which may be expected for the entire  year.  The  historical  financial
statements  as of  December  31,  2003 and for the three and nine month  periods
ended  September  30,  2003  have  been  reclassified  to  present  discontinued
operations, as further described in Note 4.

Prior period numbers have been restated to conform to current year presentation.

(2) Organization

The Trust is now  structured  as what is  commonly  referred  to as an  umbrella
partnership REIT, or UPREIT, structure. To effect the UPREIT restructuring,  the
Trust formed Maxus Operating Limited Partnership, a Delaware limited partnership
("MOLP"),  to which the Trust  contributed all of its assets,  in exchange for a
99.999%  partnership  interest in MOLP and the  assumption by MOLP of all of the
Trust's  liabilities.  The Trust now conducts and intends to continue to conduct
all of its activities through MOLP. MOLP is the sole member of limited liability
companies  that own all of the Trust's  properties.  Maxus  Realty GP,  Inc.,  a
Delaware  corporation  that is wholly  owned by the Trust,  is the sole  general
partner of MOLP and has a 0.001%  interest in MOLP. As the sole general  partner
of MOLP,  Maxus  Realty GP, Inc.  generally  has the  exclusive  power under the
partnership  agreement  to manage and conduct the  business of MOLP,  subject to
certain limited approval and voting rights of the limited partners.

Pursuant  to  MOLP's  limited  partnership  agreement,  MOLP may  issue  limited
partnership operating units (and corresponding limited partnership interests) in
return for cash or other property that is  contributed to MOLP.  Holders of MOLP
limited  partnership  operating  units may redeem  the units (and  corresponding
limited partnership  interests) in return for the issuance of the Trust's common
stock or cash, at the Trust's election,  after a one (1) year holding period. At
September  30,  2004,  the  Trust  owned  approximately  99.09%  of the  limited
partnership  interests in MOLP and minority holders of MOLP owned 11,455 limited
partnership  operating units, or approximately  .91% of MOLP. The 11,455 limited
partnership  operating  units were issued in connection  with the acquisition of
the Terrace Apartments in April 2004.

(3) Segment Reporting

The Trust  aggregates the financial  information of all its properties  into one
reportable   segment   because  the   properties   all  have  similar   economic
characteristics  and provide  similar  services to similar  types and classes of
customers.  The Trust  previously  had two reportable  segments,  Apartments and
Commercial  Buildings.  The Trust sold its last  commercial  building  in August
2004.

(4) Property Acquisition and Disposition

Sale of ACI

The Trust follows the provisions of Statement of Financial  Accounting Standards
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"), which addresses financial  accounting and reporting for the impairment or
disposal of long-lived  assets.  This statement  establishes a single accounting
model  for  long-lived  assets  to  be  disposed  of  by  sale.  The  Trust  has
reclassified its Consolidated Balance Sheet as of December 31,


                                       6
<PAGE>

2003, and its Consolidated  Statements of Operations and Consolidated  Statement
of Cash  Flows  for the  three  and nine  months  ended  September  30,  2003 in
compliance  with SFAS 144 to reflect  discontinued  operations of ACI, which was
classified  as held for sale on August 25, 2004.  This  reclassification  has no
impact on the  Trust's  net income or net income per share.  This  property  was
previously included in the commercial buildings segment. The Trust no longer has
separate  reportable  segments.  On August  25,  2004,  the Trust sold ACI to an
unrelated third party. The sales price was $8,202,500.  After deducting costs of
the sale and the net book value of the assets sold,  the sale  resulted in a net
book gain of approximately  $2,116,000 and provided approximately $3,791,000 net
sale  proceeds.  Accounting  rules  require  the  Trust to  defer  approximately
$1,100,000 in sales proceeds, which represents the make whole payment that would
be required if the lender  accelerated  the  obligation at the time of the sale.
The net book  gain on sale has  been  reduced  by this  amount.  The make  whole
payment is included in other  accrued  liabilities  and is further  described in
Note 5.

Operating  information  for ACI and Atrium (which was sold in May, 2003) for the
three and  nine-month  periods  ended  September  30, 2004 and 2003 is set forth
below:

<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                        Three Months Ended:                   Nine Months Ended:
                                                      Sept. 30,      Sept. 30,              Sept. 30,    Sept. 30,
                                                        2004           2003                   2004         2003
                                                        ----           ----                   ----         ----

Total revenue                                   $      160,000       234,000                628,000      1,198,000

Depreciation and amortization                           40,000        60,000                162,000        299,000
Repairs and maintenance, including
   common area maintenance                                 ---         7,000                    ---        121,000
Real estate taxes                                       19,000        30,000                 75,000        179,000
Property management fees                                 7,000         9,000                 24,000         43,000
Utilities                                                  ---           ---                    ---         56,000
Other                                                    1,000         7,000                 12,000         61,000
                                                   -----------   -----------            -----------    -----------
    Total operating expenses                            67,000       113,000                273,000        759,000
                                                   -----------   -----------            -----------    -----------

    Net operating income                                93,000       121,000                355,000        439,000
                                                   -----------   -----------            -----------    -----------
    Interest expense                                    52,000        92,000                234,000        300,000
                                                   -----------   -----------            -----------    -----------

Net income before gain (loss) on sale           $       41,000        29,000                121,000        139,000
                                                   -----------   -----------            -----------    -----------

Gain (loss) on sale (1)                              2,116,000           ---              2,116,000        (26,000)
Adjustment of make whole premium                       (59,000)          ---                (59,000)           ---
                                                   -----------   -----------            -----------    -----------
Income before minority interest                      2,098,000        29,000              2,178,000        113,000
Minority interest in discontinued operations            20,000           ---                 20,000            ---
                                                   -----------   -----------            -----------    -----------
Income from discontinued operations                  2,078,000        29,000              2,158,000        113,000
                                                   ===========   ===========            ===========    ===========
Income (loss) from discontinued operations
     per share                                  $         1.61           .02                   1.71            .09
                                                   ===========   ===========            ===========    ===========
</TABLE>

(1) Represents loss on sale of Atrium of $26,000 in 2003 and gain on sale of ACI
of $2,116,000 in 2004.

Acquisition of Apartments

On April 30, 2004, the Trust, through one of the Trust's subsidiaries,  acquired
The Terrace Apartments, an eighty-four unit apartment complex located in Olathe,
Kansas, for a purchase price of approximately $2,020,000. In connection with the
acquisition and as part of the purchase price, the Trust assumed a mortgage loan
of approximately  $1,650,000,  other liabilities of approximately  $89,000,  and
other assets of approximately $28,000.

In  connection  with the  acquisition,  the  Trust  issued  5,455  MOLP  limited
partnership  operating  units  valued  at  approximately  $65,460  and made cash
payments totaling approximately $172,000.

David L. Johnson,  the Trust's  Chairman,  Chief Executive Officer and President
and  beneficial  owner of more than 10% of the  Trust's  issued and  outstanding
common stock, is the principal owner and President of DLJ Enterprises, Inc., the
general partner of Terrace Acquisition, L.P., and is the primary equity owner of
a limited partner of a


                                       7
<PAGE>


partnership  that owned  approximately  18% of  Terrace  Acquisition,  L.P.  DLJ
Enterprises,  Inc. received a brokerage commission of $72,000 in connection with
the closing of the  transaction  in the form of 6,000 MOLP  limited  partnership
operating units.

On  September  1, 2004,  the Trust,  through  two of the  Trust's  wholly  owned
subsidiaries of its operating limited  partnership,  MOLP,  acquired The Waverly
Apartments ("Waverly"), a 128-unit apartment complex located in Bay Saint Louis,
Mississippi,  and Arbor Gate  Apartments  ("Arbor Gate"),  a 120-unit  apartment
complex located in Picayune,  Mississippi, for a purchase price of approximately
$9,400,000  from an unrelated  third party.  The  purchase  price was  allocated
$3,948,000  to Arbor Gate and  $5,452,000  to Waverly.  In  connection  with the
purchase  of Arbor Gate,  the Trust paid cash of  approximately  $1,028,000  and
acquired financing of $3,080,000 with monthly payments of approximately $24,000.
In  connection  with  the  acquisition  of  Waverly,  the  Trust  paid  cash  of
approximately  $1,380,000  and acquired  financing of  $4,250,000,  with monthly
payments of approximately  $35,000. The cash paid includes cash used to fund tax
and insurance escrows required by the Lender.  Each mortgage loan bears interest
at a variable  rate with a maximum  rate cap of 6.25% and is due and  payable on
September 1, 2011.

DLJ Enterprises,  Inc. received a brokerage  commission of $70,500 in connection
with the closing of the purchase of Arbor Gate and Waverly.

The tables below  present the proforma  results of operations of the Trust as if
the acquisitions (and disposition) had occurred at January 1, 2003 (unaudited).

<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                           Three Months Ended              Nine Months Ended
                                                       Sept. 30,       Sept. 30,        Sept. 30,     Sept. 30,
                                                          2004            2003             2004          2003
                                                          ----            ----             ----          ----

Total revenue                                          1,781,000       1,726,000        5,332,000     5,179,000

Depreciation and amortization                            442,000         429,000        1,315,000     1,287,000
Repairs and maintenance, including
     common area maintenance                             238,000         243,000          678,000       668,000
Real estate taxes                                        123,000         124,000          368,000       370,000
General and administrative                                91,000          68,000          278,000       221,000
Utilities                                                146,000         154,000          419,000       418,000
Property management fees - related parties                88,000          86,000          262,000       254,000
Other                                                    396,000         425,000        1,219,000     1,224,000
                                                     -----------     -----------      -----------   -----------
Total operating expenses                               1,524,000       1,529,000        4,539,000     4,442,000
                                                     -----------     -----------      -----------   -----------

       Net operating income                              257,000         197,000          793,000       737,000
                                                     -----------     -----------      -----------   -----------

       Interest income                                    (5,000)        (14,000)         (11,000)      (18,000)
       Interest expense                                  383,000         395,000        1,113,000     1,193,000
                                                     -----------     -----------      -----------   -----------
Loss before minority interest and
       discontinued operations                          (121,000)       (184,000)        (309,000)     (438,000)
Minority interest in continuing operations                (1,000)         (2,000)          (3,000)       (4,000)
                                                     -----------     -----------      -----------   -----------
Loss from continuing operations                         (120,000)       (182,000)        (306,000)     (434,000)
Income (loss) from discontinued operations, including
       loss on disposal of Atrium of $26,000 and
       gain on sale of ACI of $1,785,000 in 2003         (97,000)        259,000           26,000     1,935,000
Minority interest in discontinued operations              (1,000)          2,000              ---        18,000
                                                     -----------     -----------      -----------   -----------
Income (loss) from discontinued operations               (96,000)        257,000           26,000     1,917,000
                                                     -----------     -----------      -----------   -----------

Net loss                                            $   (216,000)         75,000         (280,000)    1,483,000
                                                     ===========     ===========      ===========   ===========

Per share data (basic and diluted):
   Loss from continuing operations                  $       (.09)           (.15)            (.24)         (.35)
   Income from discontinued operations                      (.08)            .21              .02          1.55
                                                     -----------     -----------      -----------   -----------

           Total                                    $       (.17)            .06             (.22)         1.20
                                                     ===========     ===========      ===========   ===========
</TABLE>



                                       8
<PAGE>


This proforma  information does not purport to be indicative of the results that
actually would have been obtained if the transactions  had actually  occurred at
the beginning of 2003, and is not intended to be a projection of future results.

(5) Contingencies

On August 25, 2004,  ACI  Financing,  L.L.C.,  a  subsidiary  of the Trust ("ACI
Financing"),  sold the ACI  Building,  an  office  building  located  in  Omaha,
Nebraska (the "ACI Building"),  to an unrelated third party, FOR 1031 Omaha LLC,
an Idaho limited  liability  company  ("FOR 1031").  FOR 1031 is an affiliate of
DBSI Housing Inc., an Idaho corporation  ("DBSI").  In connection with the sale,
ACI Financing's lender, LaSalle Bank National Association, as trustee for Morgan
Stanley  Dean  Witter   Capital  I  Inc.,   Commercial   Mortgage   Pass-Through
Certificates,  Series  2000-LIFE2 (the  "Lender"),  failed or refused to approve
DBSI's assumption of the existing loan secured by the ACI Building. As a result,
ACI Financing and DBSI agreed as follows:

     o    the  parties  agreed  that  FOR  1031 and  DBSI  would  indemnify  ACI
          Financing from all costs, expenses,  penalties,  interest,  attorneys'
          fees,  defense  costs,  Make  Whole  Premiums  (as  described  below),
          principal,  default interest and every other charge made by the Lender
          against  ACI  Financing  resulting  directly  or  indirectly  from the
          transfer of the ACI  Building  to FOR 1031  without the consent of the
          Lender  or  otherwise  complying  with the  terms of the  Lender  loan
          documents in  connection  with the transfer of the ACI Building to FOR
          1031;

     o    ACI Financing  agreed to be responsible  for and pay to the Lender the
          lesser of (i)  $100,000  or (ii) ten  percent  (10%) of any Make Whole
          Premium   successfully  charged  by  the  Lender  resulting  from  ACI
          Financing's  sale of the ACI  Building  to FOR  1031;  and

     o    FOR  1031  executed  wrap  around  loan  documents,  including  (i)  a
          promissory  note  payable  to ACI  Financing,  (ii) a deed  of  trust,
          assignment  of rents and security  agreement in favor of ACI Financing
          and (iii) an indemnity agreement, which was also executed by DBSI.

On September 3, 2004,  ACI Financing and the  Registrant  received a letter from
Principal Global Investors,  LLC, as primary servicer to the Lender, pursuant to
which the  Lender  declared  the sale to be an event of  default  under the loan
documents.  The Lender  further took the  position  that ACI  Financing  and the
Registrant  (as a  limited  guarantor)  are now  fully  liable  under  the  loan
documents and the guaranty and reserved all rights afforded the Lender under the
loan  documents.  The Lender  declared that interest  shall accrue on the entire
principal  balance at the  "Default  Rate" of  12.63%,  which is equal to 4% per
annum above the applicable  interest  rate.  The  Registrant  disagrees with the
Lender's claim that the Registrant's  limited  guarantee  extends to the default
rate of interest and intends to contest this claim.

ACI  Financing and FOR 1031 intend to contest the right of the Lender to declare
a default and charge the default rate of interest.  As indicated above, FOR 1031
and DBSI are obligated to indemnify ACI Financing for any default  interest that
ACI Financing must pay under the loan documents with the Lender. In October 2004
the Lender charged ACI Financing with default interest of approximately  $18,000
for the month ending  September 30, 2004. This amount was  subsequently  paid to
the Lender by DBSI.  However,  there can be no  assurance  that DBSI or FOR 1031
will  have  sufficient  assets  to  continue  to  support  it's  indemnification
obligations to ACI Financing.  In addition,  the Registrant received one monthly
payment of $34,000  from FOR 1031 and made  payment of $34,000 to the Lender for
the three and nine months ending  September 30, 2004,  representing  one monthly
payment of  $31,000  interest  and $3,000  principal.  The  interest  income and
interest  expense  captions  presented in the financial  statements  include the
$49,000 of  interest  income  received  from FOR 1031 and  $49,000  of  interest
expense paid to the Lender.

ACI  Financing's  loan documents with the Lender also (i) includes a due on sale
clause that allows the Lender to declare the entire principal amount and accrued
interest due  immediately  upon an event of default and (ii) provides that in an
event of a default and  acceleration  of the loan,  ACI  Financing  must pay the
Lender a "Make Whole  Premium,"  which is defined to mean the greater of (i) one
percent (1%) of the outstanding  principal  amount of the loan or (ii) a premium
calculated  by  determining  the  present  value of the  payments  to be made in
accordance with the promissory note discounted at the yield on the applicable US
Treasury Issue for the number of months  remaining from the date of acceleration
to the maturity date, which is approximately 71 months.


                                       9
<PAGE>


There can be no assurance that the Lender,  in addition to declaring the default
rate of  interest  due,  will  not (i)  declare  the  full  amount  of the  loan
immediately  due and payable,  (ii) request  payment of the Make Whole  Premium,
(iii) foreclose upon the property and (iv) file a lawsuit to enforce its rights.

As a  result  of the  sale,  the  Registrant  recorded  a gain of  approximately
$2,116,000  after  deducting the costs of the sale and the net book value of the
assets sold.  Accounting  rules require the  Registrant  to defer  approximately
$1,100,000 in sales proceeds. The net book gain was reduced by this amount. This
amount  represents the Make Whole Premium that would be presently be required if
the Lender  accelerated  the  obligation  at the time of the sale.  Any proceeds
received  from FOR 1031  related to the  indemnification  requirements  would be
recorded when such proceeds are received. If the Lender does not accelerate this
obligation  and it is paid pursuant its regular  schedule,  the amount  deferred
will be  amortized  to  income  over the  remaining  term of the  obligation  in
accordance with the Registrant's policies.

A $100,000  deposit for the purchase of  Carrington  Apartments  was made by the
Registrant.  The registrant was unable to obtain lender  approval for assumption
of the current loan in  connection  with the purchase (as  described in Part II,
Item I). As a result,  the seller  believes the  Registrant  should  forfeit the
deposit.  The Registrant  believes that it fulfilled its  obligations  under the
contract and that the deposit should be returned to the Registrant. As a result,
the escrow will be placed with the court for resolution. Management believes the
Trust will  ultimately  prevail and receive the funds,  however,  it is possible
that the escrow could be forfeited.  If the Trust forfeits the deposit,  it will
record a loss of $100,000 in the period in which the deposit is forfeited.

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This section includes "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. All statements,  other than statements of historical facts, included in
this section and located  elsewhere in this Form 10-QSB  regarding the prospects
of our  industry  and our  prospects,  plans,  financial  position  and business
strategy may constitute forward-looking statements. In addition, forward-looking
statements generally can be identified by the use of forward-looking terminology
such as "may," "will," "expect,"  "intend,"  "estimate,"  "anticipate,"  "plan,"
"foresee," "believe" or "continue" or the negatives of these terms or variations
of them or  similar  terminology.  Although  we  believe  that the  expectations
reflected in these  forward-looking  statements are  reasonable,  we can give no
assurance  that these  expectations  will prove to have been  correct.  All such
forward-looking  statements are subject to certain risks and uncertainties  that
could cause actual results to differ  materially from those  contemplated by the
relevant  forward-looking  statement.  Important factors that could cause actual
results to differ materially from our expectations  include,  among others:  (i)
the ability to retain key tenants, (ii) general economic,  business,  market and
social  conditions,  (iii)  trends in the real estate  investment  market,  (iv)
projected  leasing and sales, (v)  competition,  (vi) inflation and (vii) future
prospects for the Trust.  Readers are urged to consider these factors  carefully
in evaluating the  forward-looking  statements.  All subsequent written and oral
forward-looking  statements  attributable  to us or persons acting on our behalf
are expressly  qualified in their entirety by these cautionary  statements.  The
forward-looking  statements included herein are made only as of the date of this
Form 10-QSB,  and we do not  undertake any  obligation  to release  publicly any
revisions to such forward-looking  statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions that affect amounts  reported in the  accompanying  Consolidated
Financial Statements.  The most significant  assumptions and estimates relate to
revenue  recognition,   depreciable  lives  of  investment   property,   capital
expenditures,  properties  held  for  sale,  and  the  valuation  of  investment
property.  Application of these assumptions requires the exercise of judgment as
to future uncertainties and, as a result, actual results could differ from these
estimates.


                                       10
<PAGE>


Revenue Recognition

Lease  agreements are accounted for as operating  leases,  and rentals from such
leases are reported as revenues ratably over the terms of the leases.

In  connection  with the sale of the ACI Building on August 25, 2004, a deferred
liability was recorded in the amount of approximately  $1,100,000,  representing
the Make  Whole  Premium  described  in Note 5. The Make  Whole  Premium  is the
greater  of (i) 1% of the  outstanding  principal  amount  of the loan or (ii) a
premium  calculated by determining  the present value of the payments to be made
in accordance with the promissory note discounted at the yield on the applicable
US  Treasury  Issue  for  the  number  of  months  remaining  from  the  date of
acceleration  to the  maturity  date,  which is  approximately  71  months.  The
difference  obtained  by  subtracting  the  current  amount of the loan from the
present  value,  calculated in this manner  represents  the current value of the
make whole premium. The  period-to-period  change in the value of the Make Whole
Premium  is  recorded  in  discontinued  operations  for the period in which the
change occurs.  Increases in the calculated amount of the Make Whole Premium are
represented as decreases in income from discontinued operations and decreases in
the calculated  amount of the Make Whole Premium are represented as increases in
income from discontinued operations.

Investment Property Useful Lives

The Trust is required to make  subjective  assessments as to the useful lives of
its  properties  for the purpose of determining  the amount of  depreciation  to
reflect on an annual basis with respect to those  properties.  These assessments
have a direct impact on the Trust's net income.

Buildings and  improvements are depreciated over their estimated useful lives of
27.5 to 40 years on a straight-line  basis.  Tenant improvements are depreciated
over the term of the  lease  on a  straight-line  basis.  Personal  property  is
depreciated  over its estimated useful life ranging from 5 to 15 years using the
straight-line method.

Capital Expenditures

For reporting  purposes,  the Trust  capitalizes all carpet,  flooring,  blinds,
appliance and HVAC replacements.  The Trust expenses all other expenditures that
total less than $10,000.  Expenditures over $10,000 and expenditures  related to
contracts over $10,000 are evaluated  individually for  capitalization.  Repairs
and  maintenance  are charged to expense as incurred.  Additions and betterments
are capitalized.

Classification of Properties

The Trust is required to make  subjective  assessments  as to whether a property
should be classified  as "Held for Sale" under the  provisions of SFAS 144. SFAS
144  contains  certain  criteria  that must be met in order for a property to be
classified as held for sale, including: management commits to a plan to sell the
asset;  the asset is available for immediate sale in its present  condition;  an
active  program to locate a buyer has been  initiated;  the sale of the asset is
probable and transfer of the asset is expected to qualify for  recognition  as a
sale within one year; the asset is being  actively  marketed for sale at a price
that is reasonable in relation to its current fair value;  and actions  required
to complete the plan indicate that it is unlikely  that  significant  changes to
the plan will be made or that the plan will be withdrawn.

Management  believes that a property should not be classified as "Held for Sale"
until a contract for the sale of a property has been  executed,  all  inspection
periods have passed and any earnest deposit becomes  non-refundable and the only
pending  item to  complete  the sale is the  passage of time.  Until this point,
management believes that there may be actions required to complete the plan that
may result in changes to or  termination of the plan, and therefore the property
should not be classified as "Held for Sale" under SFAS 144.

Impairment of Investment Property Values

The Trust is required to make  subjective  assessments  as to whether  there are
impairments in the value of its investment properties. Management's estimates of
impairment  in the value of  investment  properties  have a direct impact on the
Trust's net income.



                                       11
<PAGE>

The Trust  follows  the  provisions  of SFAS No.  144.  The Trust  assesses  the
carrying  value  of  its  long-lived   asset  whenever   events  or  changes  in
circumstances  indicate that the carrying amount of the underlying asset may not
be  recoverable.  Certain factors that may occur and indicate that an impairment
may exist include, but are not limited to: significant underperformance relative
to projected future operating results;  significant changes in the manner of the
use of the asset; and significant adverse industry or market economic trends. If
an  indicator  of  possible  impairment  exists,  a property  is  evaluated  for
impairment by a comparison of the carrying amount of a property to the estimated
undiscounted future cash flows expected to be generated by the property.  If the
carrying  amount of a property  exceeds  its  estimated  future cash flows on an
undiscounted  basis,  an impairment  charge is recognized by the amount by which
the  carrying  amount of the  property  exceeds the fair value of the  property.
Management   estimates  fair  value  of  its   properties   based  on  projected
undiscounted  cash flows using a discount  rate  determined  by management to be
commensurate with the risk inherent in the Trust.

DESCRIPTION OF BUSINESS

OVERVIEW

The Trust previously operated rental real estate in two key segments, apartments
and commercial.  The Trust currently operates seven apartment  communities.  The
last commercial building was sold in August 2004. Cash is primarily generated by
renting  apartment units to tenants,  or securing loans with the Trust's assets.
Cash is used  primarily to pay  operating  expenses  (repairs  and  maintenance,
payroll,  utilities,  taxes,  and  insurance),  make  capital  expenditures  for
property  improvements,  repay principal and interest on outstanding loans or to
pay cash  distributions  to  shareholders.  The key  performance  indicators for
revenues are  occupancy  rates and rental  rates.  Revenues are also impacted by
concessions  (discounts)  offered  as  rental  incentives.  The key  performance
indicator for operating  expenses is total operating expense per apartment unit.
A  significant  change in the  turnover  rate of rental  units can also  cause a
significant change in operating expenses. Management also evaluates total taxes,
utilities and insurance rates for each property.

General  economic  trends that  management  evaluates  include  construction  of
apartment units (supply),  unemployment  rates,  job growth,  and interest rates
(demand).  The apartment  industry is sensitive to extremely low interest rates,
which tend to increase home ownership and decrease  apartment  occupancy  rates.
The apartment industry is also sensitive to increased  unemployment rates, which
tend to cause  possible  renters  to double  up in a unit or share a  non-rental
dwelling with relatives or  acquaintances.  New construction in an area with low
occupancy rates can cause a further decline in occupancy or rental rates.

Economic  trends appear to indicate  that  interest  rates have bottomed out. It
also appears that unemployment  rates are beginning to decline,  with job growth
beginning  to rise.  If this is correct  and if the trend  continues,  the Trust
should  be  able  to  begin  reducing  concessions,  raising  rental  rates  and
increasing occupancy, which should improve revenues. Variable operating expenses
would also tend to increase, but fixed expense coverage would improve.




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                                       12
<PAGE>


The Trust invests in income-producing real properties,  primarily apartments. As
of September 30, 2004 the Trust's portfolio is comprised of:

<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                     SQUARE FEET/
PROPERTY                               # UNITS         TYPE                LOCATION                PURCHASE
                                                                                                     DATE
Forest Park Apartments                    110        Apartments          Kansas City, MO         August, 2000
("Forest Park")
(f.k.a. North Winn)

King's Court Apartments (1)                82        Apartments          Olathe, KS              August, 2001
("King's Court")

Terrace Apartments (1)
("Terrace")                                84        Apartments          Olathe, KS              April, 2004

Chalet Apartments - I and II              234        Apartments          Topeka, KS              September, 2001
("Chalet")

The Landings Apartments                   154        Apartments          Little Rock, AR         September, 2001
(the "Landings")

Barrington Hills Apartments               232        Apartments          Little Rock, AR         November, 2001
("Barrington Hills")

Arbor Gate Apartments                     120        Apartments          Picayune, MS            September, 2004
("Arbor Gate")

Waverly Apartments                        128        Apartments          Bay Saint Louis, MS     September, 2004
("Waverly")

</TABLE>

(1) King's Court and Terrace Apartment ("Kings Court/Terrace") are operated as
one entity.

UPREIT Structure

The Trust is now  structured  as what is  commonly  referred  to as an  umbrella
partnership REIT, or UPREIT, structure. To effect the UPREIT restructuring,  the
Trust formed Maxus Operating Limited Partnership, a Delaware limited partnership
("MOLP"),  to which the Trust  contributed all of its assets,  in exchange for a
99.999%  partnership  interest in MOLP and the  assumption by MOLP of all of the
Trust's  liabilities.  The Trust now conducts and intends to continue to conduct
all  of  its  activities  through  MOLP.  Maxus  Realty  GP,  Inc.,  a  Delaware
corporation  that is wholly owned by the Trust,  is the sole general  partner of
MOLP and has a 0.001%  interest in MOLP.  As the sole  general  partner of MOLP,
Maxus Realty GP, Inc.  generally has the exclusive  power under the  partnership
agreement to manage and conduct the business of MOLP, subject to certain limited
approval and voting rights of the limited partners.

Pursuant  to  MOLP's  limited  partnership  agreement,  MOLP may  issue  limited
partnership operating units (and corresponding limited partnership interests) in
return for cash or other property that is  contributed to MOLP.  Holders of MOLP
limited  partnership  operating  units may redeem  the units (and  corresponding
limited partnership  interests) in return for the issuance of the Trust's common
stock or cash, at the Trust's election, after a one (1) year holding period. The
Trust  anticipates  that the UPREIT  structure will enable it to make additional
acquisitions of properties from tax-motivated  sellers.  As an UPREIT, the Trust
believes that MOLP will be able to issue limited partnership  operating units to
tax-motivated  sellers who contribute properties to MOLP, thereby enabling those
sellers to realize certain tax benefits that would be unavailable to them if the
Trust  purchased  those  properties  directly  for cash or common  stock.  As of
November  1,  2004,  minority  holders of MOLP own  11,455  limited  partnership
operating units, or approximately .91% of the partnership interest in MOLP.

Each of the Apartment  Complexes are owned by single  member  limited  liability
companies  that are directly  owned by MOLP.  Maxus  Properties,  Inc.  provides
property management services for each of the Trust's real properties.


                                       13
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

Cash as of September 30, 2004 was $4,178,000, an increase of $3,317,000 from the
balance of $861,000 at  December  31,  2003.  Cash of  $1,664,000  was held at a
qualified  intermediary  on September 30, 2004 pending a potential  Section 1031
exchange.  These funds represent the net proceeds from the sale of ACI,  reduced
by the net  disbursement  for the  purchase  of Arbor Gate and Waverly in an IRS
Section 1031 exchange.

Escrows and reserves  held by various  lenders were  $1,088,000  and $598,000 at
September  30, 2004 and  December 31,  2003,  respectively,  and are not readily
available  for current  disbursement.  An  additional  escrow amount of $100,000
represents a deposit made for the purchase of Carrington Apartments as described
in Note 5.

Net cash provided by operating activities decreased $306,000 to $833,000 for the
nine-month period ended September 30, 2004 primarily attributable to an increase
of $482,000  of escrows  and  reserves  funded in 2004  compared  to 2003.  This
decrease  was offset by a $137,000  increase in cash  provided  by  discontinued
operations.

Net cash used in investing  activities of continuing  operations was $10,156,000
comprised of $9,587,000 to purchase Arbor Gate and Waverly, $193,000 for the net
cash  outlay for the merger of  Terrace  Apartments  and  $276,000  for  capital
expenditures.  The largest capital  expenditures  included  $153,000 for capital
replacements at all properties  combined,  along with approximately  $39,000 for
roofs, siding and guttering at Kings Court, and $30,000 for decks at Chalet.

Net cash  provided by investing  activities of  discontinued  operations in 2004
represents  net  sale  proceeds  of  ACI.  In  2003,  the  $4,787,000  primarily
represents  sale  proceeds  of  the  Atrium.  Net  cash  provided  by  financing
activities of continuing  operations was $8,872,000.  Cash of $2,250,000 (net of
$100,000 of financing costs) was provided by the financing of Kings Court, which
previously was not financed. Cash of $7,244,000 (net of $86,000 financing costs)
was provided by the financing of Arbor Gate and Waverly. Distributions were paid
totaling  $949,000  and cash was  provided  by  issuance  of  common  stock  for
$606,000.

Management  believes  the Trust's  current  cash  position  and the  properties'
ability to generate  operating and financing  cash flows should enable the Trust
to fund  anticipated  operating  and  capital  expenditures  in 2004.  Projected
capital  expenditures of approximately  $140,000,  are currently planned for the
remainder of 2004, primarily for roofs, HVAC and plumbing and painting projects,
with the majority of the  expenditures  expected to be reimbursed  from reserves
held by lenders.  Capital replacements of approximately  $50,000 are expected to
be reimbursed  from reserves  held by lenders.  Except for the items  mentioned,
management  does not anticipate  any material  capital  expenditures  at any one
property in 2004. However, the Trust will continue to evaluate opportunities for
the  acquisition  of  investment  properties  and  may  incur  material  capital
expenditures in connection with these acquisition opportunities.

Management  does  not  believe  the  risk of  changes  in  operations  adversely
impacting  cash flow from  operating  activities  is a material  risk. As leases
expire,  they are  expected to be  replaced  or renewed in the normal  course of
business over a reasonable period of time.

On August 25, 2004,  ACI  Financing,  L.L.C.,  a  subsidiary  of the Trust ("ACI
Financing")  sold  the  ACI  Building.  Net  cash  proceeds  were  approximately
$3,791,000.  This  contract is  described in more detail in note 4 and note 5 to
the Unaudited  Consolidated  Financial  Statements  above. On September 1, 2004,
subsidiaries  of the Trust purchased Arbor Gate and Waverly for a purchase price
of $9,400,000 using approximately  $2,156,000 of the sale proceeds from ACI in a
1031 exchange. The remainder of cash for the purchase was provided by additional
working  capital  of the Trust.  Management  intends  to  evaluate  uses for the
remaining  net sale  proceeds  from  ACI  (approximately  $1,664,000)  including
investing in additional income-producing real estate properties, working capital
purposes and dividends to shareholders.


                                       14
<PAGE>


Contractual Obligations and Commercial Commitments

<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                               Balance at              Interest                       Due
                             Sept. 30, 2004              Rate

ACI                             4,142,000                12.63%                  August 1, 2010

Forest Park                     1,868,000                 4.91% (variable)       September 1, 2007

Kings Court/Terrace             2,340,000                 3.34% (variable)       May 1, 2034

Terrace                         1,634,000                 6.87%                  February 1, 2009

Chalet I                        3,942,000                 6.59%                  October 1, 2008

Chalet II                       1,487,000                 6.535%                 October 1, 2008

The Landings                    3,681,000                 7.66%                  September 1, 2007

Barrington Hills                5,662,000                 6.035%                 July 1, 2029

Arbor Gate                      3,080,000                 3.79% (variable)       September 1, 2011

Waverly                         4,250,000                 3.79% (variable)       September 1, 2011
                             ------------

Total                        $ 32,086,000
                              ===========

</TABLE>


Reference is also made to Note 2 of Notes to Financial  Statements  incorporated
by reference in the Trust's  Annual Report on Form 10-KSB for a  description  of
mortgage  indebtedness secured by the Trust's real property investments On April
30, 2004, the Trust assumed the mortgage on Terrace, and also secured additional
financing  secured  by Kings  Court,  which  was not  previously  financed,  and
Terrace.  On September 1, 2004,  the Trust obtained  financing  secured by Arbor
Gate and Waverly, in connection with the acquisition of these properties.  Refer
to Note 5 for discussion of the default rate of interest on ACI.

OFF-BALANCE SHEET ARRANGEMENTS

The Partnership does not have any "off-balance sheet arrangements" as defined in
Item 303 (c) of Regulations S-B promulgated under the Securities Exchange Act of
1934, as amended.

RESULTS OF OPERATIONS

The  results of  operations  for the Trust's  properties  for the three and nine
months ended September 30, 2004 and 2003 are detailed below.

Funds from Operations

The white paper on Funds from  Operations  approved by the board of governors of
NAREIT  defines  Funds  from  Operations  as  net  income  (loss)  (computed  in
accordance with GAAP), excluding gains (or losses) from sales of property,  plus
property  related  depreciation  and  amortization,  and after  adjustments  for
unconsolidated partnerships and joint ventures.

Adjustments for unconsolidated partnerships and joint ventures are calculated to
reflect Funds from Operations on the same basis. In 1999,  NAREIT  clarified the
definition of Funds from Operations to include  non-recurring events, except for
those that are defined as "extraordinary  items" under GAAP and gains and losses
from sales of depreciable  operating  property.  In 2002,  NAREIT clarified that
Funds  from  Operations  related  to  assets  held for sale,  sold or  otherwise
transferred and included in results of discontinued  operations  should continue
to be included in consolidated Funds from Operations.


                                       15
<PAGE>


The Trust  computes  Funds from  Operations  in accordance  with the  guidelines
established  by the white  paper,  which may  differ  from the  methodology  for
calculating  Funds  from  Operations   utilized  by  other  equity  REITs,  and,
accordingly, may not be comparable to such other REITs. Funds from Operations do
not represent  amounts  available for management's  discretionary use because of
needed capital replacement or expansion, debt service obligations, distributions
or other  commitments and  uncertainties.  Funds from  Operations  should not be
considered as an alternative to net income  (determined in accordance with GAAP)
as an  indication  of the Trust's  financial  performance  or to cash flows from
operating  activities  (determined in accordance  with GAAP) as a measure of the
Trust's  liquidity,  nor is it indicative of funds available to fund the Trust's
cash needs including its ability to make distributions. The Trust believes Funds
from  Operations is helpful to investors as a measure of the  performance of the
Trust  because,  along  with cash  flows from  operating  activities,  financing
activities and investing activities, it provides investors with an understanding
of the  ability  of the  Trust  to incur  and  service  debt  and  make  capital
expenditures.  In the table below,  revenue,  expenses,  net income and property
related  depreciation and amortization  were determined in accordance with GAAP.
The  addition of property  related  depreciation  and  amortization  to, and the
elimination  of the (gain) loss on sale from,  net income  results in Funds from
Operations, which is not determined in accordance with GAAP.

<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                Three Months Ended                          Nine Months Ended
                                               Sept. 30,   Sept. 30,                      Sept. 30,   Sept. 30,
                                                 2004         2003                          2004        2003

       Net income (loss)                      1,970,000     (126,000)                     1,879,000    (163,000)

       Property related depreciation
          and amortization (1)                  408,000      341,000                     1,157,000     1,139,000
       (Gain) loss on sale                   (2,116,000)         ---                    (2,116,000)       26,000
                                            -----------  -----------                   -----------   -----------
       Funds from operations               $    262,000      215,000                 $     920,000     1,002,000
                                            ===========  ===========                   ===========   ===========
</TABLE>


(1) For the three months ended  September  30, 2004 and 2003,  depreciation  and
amortization  of the Atrium  and ACI of $34,000  and  $51,000,  respectively  is
included in this amount.  For the nine months ended September 30, 2004 and 2003,
depreciation  and  amortization  of the Atrium and ACI of $136,000 and $228,000,
respectively is included in this amount.

Occupancy

The occupancy levels at September 30 were as follows:

<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                           OCCUPANCY LEVELS AT SEPTEMBER 30,
                                                              2004                  2003
                                                              ----                  ----

         Forest Park                                           95%                   97%
         King's Court/Terrace (1)                              92%                   96%
         Chalet                                               100%                   93%
         The Landings                                          97%                   94%
         Barrington Hills                                      94%                   94%
         Arbor Gate                                            90%                   N/A
         Waverly                                               88%                   N/A

</TABLE>

(1) King's Court/Terrace  occupancy for 2003 reflects only King's Court. Terrace
was acquired in April 2004.

Forest  Park ended the third  quarter  of 2004 at 95%  occupancy.  The  Northern
Kansas City,  Missouri market conditions  continue to show heavy concessions and
average  occupancy of 91%. King's  Court/Terrace  occupancy was 92% at September
30, 2004. Overall occupancy in the Olathe,  Kansas market has improved slightly,
with most  competitors'  average  occupancy  in the low 90%  range.  Concessions
continue  to be  common  throughout  the  market  due to excess  supply  and low
interest  rates.   Occupancy  rates  in  the  Topeka,   Kansas  market  averaged
approximately 90% for 2003, however, concessions in the market continue. Chalet,
which is located in Topeka,  ended the quarter at 100%  occupied.  The  property
continues to reduce  concessions.  The Landings  and  Barrington  Hills are both
located in Little Rock, Arkansas, where the market occupancy rates are currently
in the mid 90% range. The Landings ended


                                       16
<PAGE>


the  quarter at 97%  occupied,  and  Barrington  Hills had  occupancy  of 94% on
September 30, 2004.  Concessions in the Little Rock area continue to be minimal.
Arbor Gate and Waverly ended the quarter at 90% and 88% occupied,  respectively.
Arbor Gate is located in Pacayune,  Mississippi  where market  occupancy is 85%.
Waverly is located in Bay Saint  Louis,  Mississippi  where  occupancy is in the
upper 80% to 90% range.

Comparison of Consolidated Results From Continuing Operations

For the three and nine month  periods  ended  September  30,  2004,  the Trust's
consolidated revenues from continuing operations were $1,535,000 and $4,213,000,
respectively.  Revenues  increased $300,000 (24.3%) and $425,000 (11.2%) for the
three and  nine-month  periods ended  September 30, 2004 as compared to the same
periods ended September 30, 2003. The increase in  consolidated  revenue for the
nine-month period is primarily attributable to the acquisition of Terrace, Arbor
Gate and Waverly  Apartments.  The  combined  income for the nine  months  ended
September 30, 2004 from Kings Court/Terrace  increased by approximately $163,000
when  compared  to the same  period in 2003.  Arbor Gate  provided  $56,000  and
Waverly  provided  $70,000  of  additional  revenue  for the nine  months  ended
September 30, 2004, representing one month of operations. Revenue also increased
by $59,000 at Chalet,  due to increased  occupancy  and  decreased  concessions.
Revenue increased at Barrington by $30,000 primarily due to an increase in other
income.

For the three and nine month  periods  ended  September  30,  2004,  the Trust's
consolidated  operating expenses from continuing  operations were $1,306,000 and
$3,588,000,  respectively.  Expenses  increased  $208,000  (18.9%) and  $427,000
(13.5%)  for the  three and  nine-month  periods  ended  September  30,  2004 as
compared to the same periods ended  September 30, 2003. The properties  acquired
in 2004 were the  primary  reason for the  increase  in  consolidated  operating
expenses for the nine-month  period.  The combined  operating  expenses at Kings
Court/Terrace  for the nine-month  period ended  September 30, 2004 increased by
approximately $250,000 when compared to the same period in 2003. The acquisition
of Arbor Gate and Waverly increased operating expenses by $32,000,  and $46,000,
respectively  for the  three and nine  months  ended  September  30,  2004.  The
additional  $30,000  increase  in  repair  and  maintenance   expenses  occurred
primarily  at  the  Landings  ($28,000)  and  was  comprised  of  various  items
significant only as a whole. Of the $122,000  increase in depreciation  expense,
$92,000 is due to the merger of the Terrace Apartments and the purchase of Arbor
Gate and Waverly.  The $23,000  increase in real estate taxes and $33,000 of the
$43,000  increase in utilities is primarily  due to the  properties  acquired in
2004.  Other  operating   expenses  increased  $106,000  primarily  due  to  the
properties  acquired  in 2004.  General  and  administrative  expense  increased
compared  to the prior year  primarily  due to  increased  professional  fees in
conjunction  with the formation of the UPREIT structure and costs related to the
Terrace  merger,  the sale of ACI,  and the  purchase of Arbor Gate and Waverly.
Interest expense increased $46,000 for the nine-month period ended September 30,
2004,  primarily  due to $49,000 of interest  expense  recorded on the ACI loan.
There is a  corresponding  increase of $49,000 in interest  income that  offsets
this expense.  See Note 5 for a discussion of the interest income and expense on
this loan. The interest  expense recorded on the ACI loan in 2003 is included in
discontinued  operations  in 2003.  The  properties  acquired  in 2004  incurred
interest  expense of $58,000 offset by a decrease in interest expense of $48,000
because King's Court was not encumbered with debt for five of the nine months in
2004.

The net loss from  continuing  operations  for the three and nine month  periods
ended  September 30, 2004 was  ($108,000) or ($.08) per share and  ($279,000) or
($.22) per share, respectively.  The net loss from continuing operations for the
three and nine month periods ended  September 30, 2003 was  ($155,000) or ($.12)
per share and ($276,000) or ($.22) per share, respectively.

Comparison of Results of Discontinued Operations

For the three-month  period ended  September 30, 2004,  revenues for the Trust's
discontinued   operations  decreased  $74,000  (31.6%)  and  operating  expenses
decreased  $46,000  (40.1%) as compared to the same time periods last year. This
decrease is primarily due to the  inclusion of the ACI building  results for two
months in 2004 compared to three in 2003.

For the nine month period  ended  September  30, 2004,  revenues for the Trust's
discontinued  operations  decreased  $570,000  (47.6%)  and  operating  expenses
decreased  $486,000 (64.0%).  This decrease is primarily due to the inclusion of
the Atrium  results  for four months in 2003  compared to none in 2004,  and ACI
results for nine months in 2003 compared to eight months in 2004.


                                       17
<PAGE>


MARKET RISK

The Trust has  considered  the provision of Financial  Reporting  Release No. 48
"Disclosure of Accounting  Policies for  Derivative  Financial  Instruments  and
Derivative Commodity Instruments, and Disclosure of Quantitative and Qualitative
Information  about Market Risk  Inherent in  Derivative  Financial  Instruments,
Other Financial Instruments and Derivative Commodity Instruments". The Trust had
no holdings of derivative  financial or commodity  instruments  at September 30,
2004.

The Trust does not believe  that it has any material  exposure to interest  rate
risk.  The debt on the ACI  building is at a fixed rated of 8.63% and matures in
2010(the  lender is charging a default  interest  rate of 12.63% as described in
Note 5); the debt on the  Landings  is at a fixed  rate of 7.66% and  matures in
2007;  the debt on Chalet is at fixed  rates of 6.59% and 6.535% and  matures in
2008; and the debt on Barrington Hills is at a fixed rate of 6.035%, is repriced
in 2009 and matures in 2029. The debt on Terrace is at a fixed rate of 6.87% and
matures in 2009. The debt on Forest Park, King's  Court/Terrace,  Arbor Gate and
Waverly  is at  variable  rates  and  matures  in 2007,  2034,  2011  and  2011,
respectively.  The  current  interest  rate  on  Forest  Park is  4.91%,  King's
Court/Terrace is 3.34%; Arbor Gate and Waverly are currently each 3.79%, and are
capped at 6.25%.  A 100 basis  point  increase in the  variable  rate debt on an
annual basis would impact net income by approximately $115,000.

INFLATION

The  effects  of  inflation  did not have a  material  impact  upon the  Trust's
operations in the period ended September 30, 2004, or in fiscal 2003.

ITEM 3:   CONTROLS AND PROCEDURES

          (a)  Evaluation of disclosure controls and procedures.

               The Trust's Chief Executive Officer and Chief Financial  Officer,
               after  evaluating  the design and  effectiveness  of the  Trust's
               disclosure  controls and  procedures  (as defined in Exchange Act
               Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered
               by this report (the "Evaluation Date"), have concluded that as of
               the  Evaluation  Date,  the  Trust's   disclosure   controls  and
               procedures were adequately designed and operating  effectively to
               ensure that material  information  relating to the Trust would be
               made  known to them by  others  within  the  Trust,  particularly
               during the period in which this Form 10-QSB  Quarterly Report was
               being prepared.

          (b)  Changes in internal controls

               There has been no change in the  Trust's  internal  control  over
               financial  reporting  during its most recent fiscal  quarter that
               has materially  affected,  or is reasonably  likely to materially
               affect, its internal control over financial reporting.


PART II   OTHER INFORMATION


ITEM 1.   LEGAL PROCEEDINGS

          Ralph and Sandra Schmude v. Maxus  Properties,  Inc., et al., Case No.
          04 CV 104814, Clay County, Missouri

          On January  29,  2004,  Ralph and Sandra  Schmude  filed suit  against
          several  defendants,  including the Registrant.  The count relating to
          the  Registrant is for common law  conspiracy  with other  defendants.
          However,  plaintiffs seek an order that all defendants,  including the
          Registrant,  are  jointly  and  severally  liable for all of the other
          counts and damages in the petition.  Plaintiffs seek (i)  compensatory
          damages  in the amount of $1.5  million  for lost  earnings,  past and
          future, and emotional  distress,  (ii) punitive damages of $3 million,
          (iii)  costs,  disbursements  and  prejudgment  interest and (iv) such
          further legal and equitable relief as the court may deem  appropriate.
          Discovery has recently commenced. The Registrant


                                       18
<PAGE>


          anticipates  its costs of defending this suit will be negligible.  The
          Registrant  believes the plaintiffs' claims against the Registrant are
          meritless.

          Maxus  Realty  Trust,  Inc.  v.  Ralph and  Sandra  Schmude,  Case No.
          CV0904-182CC Clinton County, Missouri

          On October 5, 2004, the Registrant  filed a lawsuit  against Ralph and
          Sandra Schmude.  Recently,  the Registrant was denied financing on one
          of the  properties  it had a  contract  to  purchase  because  of what
          management  believes  is a  frivolous  lawsuit  filed by the  Schmudes
          against the Registrant (discussed above). The Schmudes were repeatedly
          asked to dismiss  their  lawsuit  against the  Registrant  so that the
          Registrant  could complete the  transaction.  The Registrant  believes
          that the  Schmudes'  failure to dismiss  the  litigation  is  tortious
          conduct under  applicable law. The Registrant is seeking to recover in
          this  case  the  damages  it has  suffered  by being  deprived  of the
          opportunity to finance one of its potential acquisitions. The Schmudes
          have been  served  with this  lawsuit  but have not yet  answered  the
          claim.

ITEM 2.   CHANGES IN  SECURITIES AND SMALL BUSINESS  ISSUER  PURCHASES OF EQUITY
          SECURITIES

          None

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

          None

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          None

 ITEM 5.  OTHER INFORMATION

          On August 20, 2004, the Board of Trustees of the Trust declared a cash
          dividend of $0.25 per share payable to the holders of record on August
          31, 2004 of the Trust's $1.00 par value,  common  stock.  The dividend
          was paid on September 21, 2004. The Trust's Board of Trustees intends,
          subject to continued performance and availability of sufficient funds,
          to declare a $.25 per share cash dividend  each  quarter,  at least in
          the near future.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits

               See Exhibits Index on Page 22

          (b)  Reports on Form 8-K

               On August 26, 2004, the Trust filed a Form 8-K reporting that (i)
               the Trust  entered  into a  purchase  agreement  to  purchase  an
               apartment  complex  located in Arkansas  (Item 1.01),  and (ii) a
               subsidiary of the Trust sold the ACI Building, an office building
               located in Omaha, Nebraska (Item 2.01). (File Number 000-13754.)

               On September 8, 2004,  the Trust filed a Form 8-K reporting  that
               wholly  owned  subsidiaries  of  the  Trust's  operating  limited
               partnership   acquired  two   apartment   complexes   located  in
               Mississippi from unrelated third parties (Item 2.01),  which Form
               8-K the Trust  amended on November  12, 2004 to include pro forma
               and  audited  financial   statements  with  respect  to  the  two
               apartment complexes (Item 9.01). (File Number 000-13754.)


                                       19
<PAGE>


               On September 10, 2004,  the Trust filed a Form 8-K reporting that
               a lender to a  subsidiary  of the Trust had  declared an event of
               default  relating to the sale of the ACI  Building  (Item  2.01).
               (File Number 000-13754.)

               On September 27, 2004,  the Trust filed a Form 8-K reporting that
               the  Registrant's  agreement  to  purchase  the  Carrington  Park
               Apartments did not close due to the Seller's  lender's refusal to
               approve the Registrant's assumption of Seller's existing loan and
               the granting of a  supplemental  loan (Item  1.02).  (File Number
               000-13754.)





             (The remainder of this page left blank intentionally.)













                                       20
<PAGE>




SIGNATURES

In accordance with the requirements of the Securities  Exchange Act of 1934, the
Registrant  caused  this  report to be signed on its behalf by the  undersigned,
there unto duly authorized.

                                          MAXUS REALTY TRUST, INC.

Date: November 11, 2004               By: /s/ David L. Johnson
      -----------------                   --------------------
                                          David L. Johnson
                                          Chairman of the Board,
                                          President and Chief Executive Officer
                                          Trustee

Date: November 11, 2004               By: /s/ John W. Alvey
      -----------------                   -----------------
                                          John W. Alvey
                                          Vice President
                                          Chief Financial and Accounting Officer





                                       21
<PAGE>



EXHIBIT INDEX

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

3.1  Articles of Incorporation dated June 12, 1984, as amended, are incorporated
     by reference to Exhibit 3.1 to the  Registrant's  Quarterly  Report on Form
     10-Q for the quarter ended March 31, 2000, as filed pursuant to Rule 13a-13
     under the Securities Exchange Act of 1934 (File No. 000-13754).

3.2  Bylaws of the  Registrant,  as amended,  are  incorporated  by reference to
     Exhibit 3.2, to the  Registrant's  Quarterly  Report on Form 10-QSB for the
     quarter  ended June 30,  2003,  as filed  pursuant to Rule 13a-13 under the
     Securities Exchange Act of 1934 (File No. 0000-13754).

10.1 Agreement for Purchase and Sale dated April 28, 2004 between ACI Financing,
     L.L.C.  and DBSI Housing Inc. is  incorporated by reference to Exhibit 10.1
     to the Registrant's  Current Report on Form 8-K filed May 4, 2004 (File No.
     000-13754).

10.2 Amendment  No. 1 to  Agreement  for  Purchase  and Sale dated May 24,  2004
     between ACI Financing,  L.L.C.  and DBSI Housing,  Inc is  incorporated  by
     reference  to Exhibit  10.2 to the  Registrant's  Quarterly  Report on Form
     10-QSB for the quarter ended June 30, 2004, filed August 13, 2004 (File No.
     000-13754).

10.3 Amendment  No. 2 to  Agreement  for  Purchase and Sale dated August 2, 2004
     between ACI Financing,  L.L.C.  and DBSI Housing,  Inc. is  incorporated by
     reference  to Exhibit  10.3 to the  Registrant's  Quarterly  Report on Form
     10-QSB for the quarter ended June 30, 2004, filed August 13, 2004 (File No.
     000-13754).

10.4 Purchase and Sale  Agreement  dated June 15, 2004 between LB 100 Arbor Gate
     Circle LLC and LB 100 Waverly Drive LLC and the Registrant is  incorporated
     by reference to Exhibit 10.4 to the  Registrant's  Quarterly Report on Form
     10-QSB for the quarter ended June 30, 2004, filed August 13, 2004 (File No.
     000-13754).

10.5 Amendment No. 1 to Purchase and Sale Agreement  dated July 13, 2004 between
     LB 100  Arbor  Gate  Circle  LLC  and LB 100  Waverly  Drive  LLC  and  the
     Registrant is incorporated by reference to Exhibit 10.5 to the Registrant's
     Quarterly  Report on Form 10-QSB for the quarter ended June 30, 2004, filed
     August 13, 2004 (File No. 000-13754).

10.6 Multifamily  Note  Multistate - Adjustable Rate dated as of August 31, 2004
     executed by Arbor Gate Acquisition,  L.L.C. in favor of NorthMarq  Capital,
     Inc. is  incorporated  by  reference  to Exhibit  10.3 to the  Registrant's
     Current Report on Form 8-K filed September 8, 2004 (File No. 000-13754).

10.7 Multifamily Deed of Trust, Assignment of Rents and Security Agreement dated
     as of August 31, 2004, among Arbor Gate Acquisition, L.L.C., as grantor, to
     Mississippi Valley Title Insurance Company, as trustee,  for the benefit of
     NorthMarq  Capital,  Inc., as beneficiary,  is incorporated by reference to
     Exhibit 10.4 to the Registrant's Current Report on Form 8-K filed September
     8, 2004 (File No. 000-13754).

10.8 Multifamily  Note  Multistate - Adjustable Rate dated as of August 31, 2004
     executed by Waverly Acquisition, L.L.C. in favor of NorthMarq Capital, Inc.
     is  incorporated by reference to Exhibit 10.5 to the  Registrant's  Current
     Report on Form 8-K filed September 8, 2004 (File No. 000-13754).

10.9 Multifamily Deed of Trust, Assignment of Rents and Security Agreement dated
     as of August 31, 2004, among Waverly  Acquisition,  L.L.C., as grantor,  to
     Mississippi Valley Title Insurance Company, as trustee,  for the benefit of
     NorthMarq  Capital,  Inc., as beneficiary,  is incorporated by



                                       22
<PAGE>


     reference to Exhibit 10.6 to the  Registrant's  Current  Report on Form 8-K
     filed September 8, 2004 (File No. 000-13754).

31.1 Certification of the Chief Executive Officer Pursuant to Section 302 of the
     Sarbanes-Oxley Act of 2002

31.2 Certification of the Chief Financial Officer Pursuant to Section 302 of the
     Sarbanes-Oxley Act of 2002

32.1 Certification of the Chief Executive Officer Pursuant to Section 906 of the
     Sarbanes-Oxley Act of 2002.

32.2 Certification of the Chief Financial Officer Pursuant to Section 906 of the
     Sarbanes-Oxley Act of 2002.






                                       23