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 quarterly period ended March 31, 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 0-14483


                    Davidson Diversified Real Estate II, L.P.
             (Exact name of registrant as specified in its charter)



           Delaware                                              62-1207077
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                         55 Beattie Place, P.O. Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)

                                 (864) 239-1000
                           (Issuer's telephone number)



                         PART I - FINANCIAL INFORMATION


ITEM 1.     FINANCIAL STATEMENTS



                  Davidson Diversified Real Estate II, L.P.

                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
                        (in thousands, except unit data)

                                 March 31, 2004

<TABLE>
<CAPTION>

Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $ 200
   Receivables and deposits                                                      260
   Restricted escrows                                                             85
   Other assets                                                                  655
   Investment properties:
      Land                                                    $ 1,953
      Buildings and related personal property                   48,156
                                                                50,109
      Less accumulated depreciation                            (23,192)       26,917
                                                                            $ 28,117

Liabilities and Partners' Deficit

Liabilities
   Accounts payable                                                           $ 24
   Tenant security deposit liabilities                                           163
   Accrued property taxes                                                        446
   Other liabilities                                                             352
   Due to affiliates (Note B)                                                  8,103
   Mortgage notes payable                                                     22,850

Partners' Deficit
   General partners                                            $ (194)
   Limited partners (1,224.25 units issued and
      outstanding)                                              (3,627)       (3,821)
                                                                            $ 28,117


         See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>





                  Davidson Diversified Real Estate II, L.P.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                      (in thousands, except per unit data)


<TABLE>
<CAPTION>

                                                              Three Months Ended
                                                                       March 31,
                                                              2004            2003
                                                                           (Restated)
Revenues:
<S>                                                         <C>             <C>
  Rental income                                             $ 1,442         $ 1,261
  Other income                                                   166             215
  Casualty gain (Note D)                                           9              --
       Total revenues                                          1,617           1,476

Expenses:
  Operating                                                      793             597
  General and administrative                                      62              81
  Depreciation                                                   524             438
  Interest                                                       356             276
  Property taxes                                                 123             132
       Total expenses                                          1,858           1,524

Loss from continuing operations                                 (241)            (48)
Loss from discontinued operations                                 --            (202)
Gain on sale of discontinued operations (Note C)                  --           5,470

Net (loss) income                                            $ (241)        $ 5,220

Net (loss) income allocated to general partners               $ (5)          $ 417
Net (loss) income allocated to limited partners                 (236)          4,803

                                                             $ (241)        $ 5,220

Per limited partnership unit:
  Loss from continuing operations                          $ (192.77)       $ (36.75)
  Loss from discontinued operations                               --         (163.37)
  Gain on sale of discontinued operations                         --        4,123.34
       Net (loss) income                                   $ (192.77)      $3,923.22


         See Accompanying Notes to Consolidated Financial Statements
</TABLE>

<PAGE>


                  Davidson Diversified Real Estate II, L.P.

            CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
                                   (Unaudited)
                        (in thousands, except unit data)

<TABLE>
<CAPTION>


                                       Limited
                                     Partnership     General      Limited
                                        Units        Partners    Partners     Total

<S>                                   <C>              <C>        <C>        <C>
Original capital contributions        1,224.25         $ 1        $24,485    $24,486

Partners' deficit at
   December 31, 2003                  1,224.25        $ (189)     $(3,391)   $(3,580)

Net loss for the three months
   ended March 31, 2004                     --            (5)        (236)      (241)

Partners' deficit at
   March 31, 2004                     1,224.25        $ (194)     $(3,627)   $(3,821)


         See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>


                  Davidson Diversified Real Estate II, L.P.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                   Three Months Ended
                                                                        March 31,
                                                                       2004     2003
                                                                             (Restated)
Cash flows from operating activities:
<S>                                                                <C>         <C>
  Net (loss) income                                                $ (241)     $ 5,220
  Adjustments to reconcile net (loss) income to net cash
   provided by operating activities:
     Depreciation                                                      524         481
     Amortization of discounts and loan costs                           27          69
     Gain on sale of discontinued operations                            --      (5,470)
     Loss on early extinguishment of debt                               --          68
     Casualty gain                                                      (9)         --
     Change in accounts:
      Receivables and deposits                                         300        (111)
      Other assets                                                    (196)         29
      Accounts payable                                                (135)         22
      Tenant security deposit liabilities                               (4)        (27)
      Accrued property taxes                                           (71)        (29)
      Other liabilities                                                 15         (50)
      Due to affiliates                                                (27)         24
         Net cash provided by operating activities                     183         226
Cash flows from investing activities:
  Property improvements and replacements                               (86)     (1,862)
  Net proceeds from sale of discontinued operations                     --       2,547
  Insurance proceeds received                                            9          --
         Net cash (used in) provided by investing activities           (77)        685
Cash flows from financing activities:
  Advances from affiliates                                             145       1,393
  Payments on advances from affiliates                                (648)     (2,272)
  Payments on mortgage notes payable                                  (149)       (103)
  Loan costs paid                                                       --          (8)
         Net cash used in financing activities                        (652)       (990)

Net decrease in cash and cash equivalents                             (546)        (79)
Cash and cash equivalents at beginning of period                       746         591

Cash and cash equivalents at end of period                          $ 200       $ 512

Supplemental disclosure of cash flow information:
  Cash paid for interest                                            $ 291       $ 376

Supplemental disclosure of non-cash activity:
  Property improvements and replacements in accounts payable        $ --        $ 82
  Mortgage assumed by buyer on sale of discontinued operations      $ --       $ 6,899

At December  31,  2002,  approximately  $527,000 of  property  improvements  and
replacements  were  included  in accounts  payable and are  included in property
improvements and replacements at March 31, 2003.


         See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>



                  Davidson Diversified Real Estate II, L.P.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Note A - Basis of Presentation

The  accompanying   unaudited  consolidated  financial  statements  of  Davidson
Diversified Real Estate II, L.P. (the  "Partnership" or "Registrant")  have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-QSB and Item 310(b)
of Regulation S-B.  Accordingly,  they do not include all of the information and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.  In the opinion of Davidson Diversified  Properties,  Inc.
(the  "Managing  General  Partner"),   all  adjustments  (consisting  of  normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included.  Operating  results for the three  months ended March 31, 2004 are not
necessarily  indicative  of the results that may be expected for the fiscal year
ending  December 31, 2004. For further  information,  refer to the  consolidated
financial  statements and footnotes thereto included in the Partnership's Annual
Report on Form 10-KSB for the fiscal year ended  December 31, 2003. The Managing
General Partner is a subsidiary of Apartment  Investment and Management  Company
("AIMCO"), a publicly traded real estate investment trust.

Note B - Transactions with Affiliated Parties

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  The Partnership Agreement provides for (i) payments to
affiliates for services and (ii)  reimbursement of certain expenses  incurred by
affiliates on behalf of the Partnership.

Affiliates of the Managing  General  Partner are entitled to receive 5% of gross
receipts  from  all of  the  Partnership's  properties  for  providing  property
management  services.  The  Partnership  paid to such  affiliates  approximately
$81,000  and  $76,000  for the  three  months  ended  March  31,  2004 and 2003,
respectively, which is included in operating expenses and loss from discontinued
operations.

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting  to  approximately  $45,000 and
$70,000 for the three months ended March 31, 2004 and 2003, respectively,  which
is included in general and  administrative  expenses and investment  properties.
Included in these amounts are fees related to construction  management  services
provided by an affiliate of the Managing General Partner of approximately $3,000
for the three months  ended March 31,  2003.  There were no such fees during the
three months ended March 31, 2004. The fees are calculated based on a percentage
of current additions to investment properties.

In accordance  with the  Partnership  Agreement,  the Managing  General  Partner
advanced the Partnership  approximately $145,000 and $1,393,000 during the three
months  ended  March  31,  2004 and  2003,  respectively,  to cover  operational
expenses and to assist in the closing of the refinancing required at Reflections
Apartments.  The Partnership repaid approximately $648,000 and $2,272,000 during
the same periods.  At March 31, 2004,  the amount of the  outstanding  loans and
accrued interest was approximately $8,103,000. Interest is charged at prime plus
1%, or 5% at March 31, 2004.  Interest  expense was  approximately  $110,000 and
$88,000 for the three  months ended March 31, 2004 and 2003,  respectively.  The
Managing  General  Partner is considering  the remedies it can pursue  including
accelerating  repayment of the outstanding loans it has made to the Partnership.
Subsequent  to  March  31,  2004,  the   Partnership   received  an  advance  of
approximately $195,000 to pay franchise and non-resident withholding taxes.

The  Partnership  accrued a real estate  commission due to the Managing  General
Partner of $48,000  upon the sale of Shoppes at River Rock during the year ended
December  31,  1999.  Approximately  $18,000 is accrued at March 31, 2004 and is
included in other  liabilities in the accompanying  consolidated  balance sheet.
Payment of the  remaining  accrued  commission  is  subordinate  to the  limited
partners   receiving   their  original   invested   capital  plus  a  cumulative
non-compounded annual return of 8% on their adjusted invested capital.

The  Partnership  insures its properties up to certain  limits through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance  policies  obtained  by  AIMCO  from  insurers  unaffiliated  with the
Managing General Partner.  During 2004, the Partnership anticipates its cost for
insurance  coverage  and  fees  associated  with  policy  claims  administration
provided  by  AIMCO  and its  affiliates  will  be  approximately  $32,000.  The
Partnership was charged approximately $54,000 for 2003.

Note C - Sale of Investment Property

On January 30, 2003, the  Partnership  sold LaFontenay I and II Apartments to an
unaffiliated  third  party for  $9,700,000.  After  payment of closing  costs of
approximately $254,000, and the assumption of the mortgage debt of approximately
$6,899,000 by the purchaser,  the net proceeds  received by the Partnership were
approximately  $2,547,000.  The sale of the  property  resulted in a gain on the
sale of discontinued operations of approximately $5,470,000 for the three months
ended March 31, 2003.  In  addition,  the  Partnership  recorded a loss on early
extinguishment of debt of approximately  $68,000 as a result of the write off of
unamortized loan costs. The loss on early  extinguishment of debt is included in
the loss from discontinued operations in the accompanying consolidated statement
of operations.  The Partnership used the proceeds received from the sale to make
payments on the loan balances due to the Managing General Partner. In accordance
with Statement of Financial  Accounting Standards No. 144, the operations of the
property  have been  shown as loss from  discontinued  operations  for the three
months ended March 31, 2003 which includes revenues of approximately $169,000.

Note D - Casualty Gain

During  the  three  months  ended  March  31,  2004,  a  net  casualty  gain  of
approximately  $9,000 was recorded at Big Walnut  Apartments.  The casualty gain
related  to a fire that  occurred  at Big Walnut  Apartments  that  damaged  two
apartments  in March  2003.  The gain was the  result  of  additional  insurance
proceeds received during the three months ended March 31, 2004.


<PAGE>



Note E - Contingencies

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the  Partnership,  its Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that are named as nominal  defendants,  challenging,  among  other
things,  the  acquisition  of  interests  in certain  Managing  General  Partner
entities by Insignia Financial Group, Inc.  ("Insignia") and entities that were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged into AIMCO.  The plaintiffs  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, during the third quarter of 2001, a complaint (the "Heller action")
was filed  against  the same  defendants  that are named in the  Nuanes  action,
captioned  Heller v.  Insignia  Financial  Group.  On or about  August 6,  2001,
plaintiffs filed a first amended  complaint.  The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary  duty,  unfair  competition,  conversion,  unjust  enrichment,  and
judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a Court  appointed
appraiser.  An affiliate of the Managing General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval,  if it is granted, and to
provide  partners with the independent  appraisals at the time of these tenders.
The proposed  settlement also provided for the limitation of the allowable costs
which  the  Managing   General   Partner  or  its  affiliates  will  charge  the
Partnerships  in connection with this litigation and imposes limits on the class
counsel  fees and  costs in this  litigation.  On April  11,  2003,  notice  was
distributed  to  limited   partners   providing  the  details  of  the  proposed
settlement.

On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector")  filed an  appeal  seeking  to  vacate  and/or  reverse  the  order
approving the settlement and entering  judgment  thereto.  On November 24, 2003,
the Objector filed an  application  requesting the Court order AIMCO to withdraw
settlement  tender offers it had  commenced,  refrain from making further offers
pending the appeal and auction any units tendered to third  parties,  contending
that the offers did not conform  with the terms of the  Settlement.  Counsel for
the Objector (on behalf of another  investor)  had  alternatively  requested the
Court take certain  action  purportedly  to enforce the terms of the  settlement
agreement.  On December 18, 2003,  the Court heard oral  argument on the motions
and denied them both in their entirety.  On January 28, 2004, Objector filed his
opening brief in his pending  appeal.  On April 23, 2004,  the Managing  General
Partner and its  affiliates  filed a response brief in support of the settlement
and the judgment  thereto.  Plaintiffs have also filed a brief in support of the
settlement.  Objector is  scheduled  to file a reply brief no later than May 13,
2004.

On August 8, 2003 AIMCO  Properties  L.P., an affiliate of the Managing  General
Partner,  was served  with a  Complaint  in the United  States  District  Court,
District of Columbia alleging that AIMCO Properties L.P.  willfully violated the
Fair Labor Standards Act (FLSA) by failing to pay maintenance  workers  overtime
for all hours  worked in excess of forty per week.  On March 5, 2004  Plaintiffs
filed an amended complaint also naming NHP Management Company,  which is also an
affiliate  of the  Managing  General  Partner.  The  Complaint  is  styled  as a
Collective  Action  under  the FLSA and seeks to  certify  state  subclasses  in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate  maintenance workers for
time  that they were  required  to be  "on-call".  Additionally,  the  Complaint
alleges AIMCO  Properties  L.P.  failed to comply with the FLSA in  compensating
maintenance  workers  for time that they  worked in  responding  to a call while
"on-call".  The Defendants have filed an answer to the Amended Complaint denying
the substantive allegations. Discovery is currently underway.

The  Managing  General  Partner  does  not  anticipate  that  any  costs  to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.

The  Partnership  is unaware  of any other  pending  or  outstanding  litigation
matters  involving  it or its  investment  properties  that are not of a routine
nature arising in the ordinary course of business.

Pursuant to a formal order of investigation received by AIMCO on March 29, 2004,
the  Central  Regional  Office of the  United  States  Securities  and  Exchange
Commission is conducting an  investigation  relating to certain  matters.  AIMCO
believes the areas of investigation  include AIMCO's  miscalculated  monthly net
rental  income  figures in third  quarter 2003,  forecasted  guidance,  accounts
payable,  rent concessions,  vendor rebates,  and capitalization of expenses and
payroll.  AIMCO is cooperating  fully.  AIMCO does not believe that the ultimate
outcome  will  have a  material  adverse  effect on its  consolidated  financial
condition or results of  operations  taken as a whole.  Similarly,  the Managing
General Partner does not believe that the ultimate  outcome will have a material
adverse effect on the Partnership's  consolidated financial condition or results
of operations taken as a whole.


<PAGE>



Note F - Restatement of March 31, 2003 Financial Statements

During 2003, the three-year  redevelopment project at Reflections Apartments was
completed.  During the redevelopment  process,  the Partnership  overcapitalized
interest  expense  and  certain  operating  costs and  understated  depreciation
expense  during  the  year  ended  December  31,  2003 in  connection  with  the
accounting for the redevelopment. The correction of these errors was recorded in
the fourth quarter of 2003. The net impact of correcting the  overcapitalization
of interest  expense and operating  costs resulted in a restatement of the first
quarter  of 2003 of  approximately  $57,000 as a net  increase  to  expense.  In
addition,  depreciation  expense for  Reflections  Apartments was understated by
approximately  $121,000  during  the first  quarter  of 2003.  Accordingly,  the
accompanying  consolidated  statement of  operations  for the three months ended
March 31, 2003 has been restated to reflect a reduction of operating expenses of
approximately  $5,000 and an increase in depreciation  and interest  expenses of
approximately $62,000 and $121,000, respectively.

Note G - Indiana Property Taxes

During 2003,  the state of Indiana  implemented a  reassessment  of property tax
values. The Partnership is currently appealing the reassessed property tax value
of Reflections  Apartments.  In the state of Indiana property tax bills are paid
one year in arrears.  Thus, the 2003 property tax bills are received and paid in
2004. Due to the  Partnership's  appeal of the reassessed  property  value,  the
property  tax  accrual for 2004 and 2003 is based on the  property  tax value as
estimated by a third party property tax specialist. The property tax expense for
the three months ended March 31, 2004 based on this estimate and recorded in the
financial   statements  is   approximately   $60,000.   If  the  Partnership  is
unsuccessful  in  its  appeal,   it  could  potentially  be  liable  for  up  to
approximately  $109,000 of  additional  property  taxes for the first quarter of
2004 and 2003. The Partnership  believes that the recorded liability is the best
estimate of the amounts to be paid for Indiana property taxes.


<PAGE>




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

The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including,  without limitation:  national and local
economic  conditions;  the terms of  governmental  regulations  that  affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates;  financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest;  real estate risks, including variations of real estate values and
the general  economic  climate in local markets and  competition  for tenants in
such markets;  litigation,  including  costs  associated  with  prosecuting  and
defending  claims  and  any  adverse   outcomes,   and  possible   environmental
liabilities.   Readers  should  carefully  review  the  Partnership's  financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Partnership  files  from  time to time with the  Securities  and
Exchange Commission.

The Partnership's  investment  properties consist of three apartment  complexes.
The following  table sets forth the average  occupancy of the properties for the
three months ended March 31, 2004 and 2003:

                                                     Average Occupancy
                                                      2004       2003
      Big Walnut Apartments
         Columbus, Ohio (1)                           86%         92%
      The Trails Apartments
         Nashville, Tennessee                         92%         94%
      Reflections Apartments
         Indianapolis, Indiana (2)                    81%         57%

(1)   The Managing  General Partner  attributes the decrease in occupancy at Big
      Walnut  Apartments to a slow economy in the  Columbus,  Ohio area combined
      with high employee turnover at the property.

(2)   The  Managing  General  Partner  attributes  the  increase in occupancy at
      Reflections  Apartments to the  completion of a major  renovation  project
      during  2003.  The project  enhanced  the  appearance  of the  property to
      attract desirable tenants.

The  Partnership's  financial  results  are  dependent  upon a number of factors
including  the  ability  to  attract  and  maintain  tenants  at the  investment
properties,  interest  rates on mortgage  loans,  costs  incurred to operate the
investment  properties,  general economic conditions and weather. As part of the
ongoing business plan of the Partnership,  the Managing General Partner monitors
the  rental  market  environment  of its  investment  properties  to assess  the
feasibility of increasing rents,  maintaining or increasing occupancy levels and
protecting the Partnership from increases in expenses. As part of this plan, the
Managing  General Partner attempts to protect the Partnership from the burden of
inflation-related  increases in expenses by increasing  rents and  maintaining a
high overall  occupancy  level.  However,  the Managing  General Partner may use
rental  concessions  and  rental  rate  reductions  to offset  softening  market
conditions, accordingly, there is no guarantee that the Managing General Partner
will be able to sustain  such a plan.  Further,  a number of  factors  which are
outside the control of the  Partnership  such as the local economic  climate and
weather can adversely or positively impact the Partnership's financial results.

Results of Operations

The  Partnership's  net loss for the  three  months  ended  March  31,  2004 was
approximately  $241,000  compared to net income of approximately  $5,220,000 for
the three months ended March 31, 2003.  The decrease in net income was primarily
due to a gain on the sale of LaFontenay I and II Apartments recognized in 2003.

On January 30, 2003, the  Partnership  sold LaFontenay I and II Apartments to an
unaffiliated  third  party for  $9,700,000.  After  payment of closing  costs of
approximately $254,000, and the assumption of the mortgage debt of approximately
$6,899,000 by the purchaser,  the net proceeds  received by the Partnership were
approximately  $2,547,000.  The sale of the  property  resulted in a gain on the
sale of discontinued operations of approximately $5,470,000 for the three months
ended March 31, 2003.  In  addition,  the  Partnership  recorded a loss on early
extinguishment of debt of approximately  $68,000 as a result of the write off of
unamortized loan costs. The loss on early  extinguishment of debt is included in
the loss from discontinued operations in the accompanying consolidated statement
of operations.  The Partnership used the proceeds received from the sale to make
payments on the loan balances due to the Managing General Partner. In accordance
with Statement of Financial  Accounting Standards No. 144, the operations of the
property  have been  shown as loss from  discontinued  operations  for the three
months ended March 31, 2003 which includes revenues of approximately $169,000.

Excluding the gain on sale of discontinued operations and loss from discontinued
operations,  the  Partnership's  loss from  continuing  operations for the three
months  ended March 31, 2004 was  approximately  $241,000  compared to loss from
continuing  operations of approximately $48,000 for the three months ended March
31, 2003. The increase in loss from continuing operations was due to an increase
in total  expenses  partially  offset  by an  increase  in total  revenues.  The
increase in total  expenses is due to increases in operating,  depreciation  and
interest expenses  partially offset by a decrease in general and  administrative
expenses.  Operating  expenses  increased  due to increases in  advertising  and
property expenses and property management fees partially offset by a decrease in
administrative   expenses.   Advertising  expense  increased  primarily  due  to
increased  marketing  efforts at Reflections  Apartments after completion of the
renovation project.  Property expenses increased due to increases in payroll and
related  benefits at  Reflections  and Big Walnut  Apartments  and a decrease in
capitalized  operating  costs related to the  renovation  project at Reflections
Apartments  in  2003  partially  offset  by  a  decrease  in  utility  costs  at
Reflections and The Trails Apartments. Property management fees increased due to
an  increase in total  revenues at  Reflections  Apartments  resulting  from the
completion of the renovation project.  Administrative  expenses decreased due to
an early exit fee accrual  recorded at Reflections  Apartments  during the first
quarter of 2003. Depreciation expense increased due to fixed assets being placed
into service  over the past year at  Reflections  Apartments  as a result of the
renovation  project.  Interest  expense  increased  due to higher  average  loan
balances  due to an  affiliate  of the  Managing  General  Partner in 2004 and a
decrease in interest  expense  capitalized as part of the renovation  project at
Reflections Apartments.

General and  administrative  expenses decreased for the three months ended March
31, 2004 due to a decrease in management  reimbursements to the Managing General
Partner  allowed under the Partnership  Agreement.  Also included in general and
administrative  expenses are the costs  associated with the quarterly and annual
communications  with  investors  and  regulatory  agencies  and the annual audit
required by the Partnership Agreement.

<PAGE>

Total  revenues  increased  due to increases in rental  income and casualty gain
partially offset by a decrease in other income. Rental income increased due to a
significant  increase in occupancy at  Reflections  Apartments and a decrease in
bad debt  expense at The Trails and Big Walnut  Apartments  partially  offset by
decreases  in average  rental  rates and  occupancy at The Trails and Big Walnut
Apartments.  Other  income  decreased  due to a decrease in late  charges at Big
Walnut Apartments partially offset by an increase in lease cancellation fees and
utilities reimbursements at Reflections Apartments.

During  the  three  months  ended  March  31,  2004,  a  net  casualty  gain  of
approximately  $9,000 was recorded at Big Walnut  Apartments.  The casualty gain
was related to a fire that  occurred at Big Walnut  Apartments  that damaged two
apartments  in March  2003.  The gain was the  result  of  additional  insurance
proceeds received during the three months ended March 31, 2004.

Liquidity and Capital Resources

At  March  31,  2004,  the  Partnership   had  cash  and  cash   equivalents  of
approximately  $200,000  compared to  approximately  $512,000 at March 31, 2003.
Cash and cash equivalents  decreased  approximately  $546,000 since December 31,
2003 due to  approximately  $652,000 of cash used in  financing  activities  and
approximately  $77,000 of cash used in investing  activities partially offset by
approximately  $183,000 of cash provided by operating  activities.  Cash used in
financing   activities   consisted  of  principal   payments  on  the  mortgages
encumbering  the  Partnership's  properties  and  payments on  advances  from an
affiliate of the Managing General Partner  partially offset by advances received
from an  affiliate  of the  Managing  General  Partner.  Cash used in  investing
activities consisted of property improvements and replacements  partially offset
by  insurance  proceeds  from  the  casualty  at  Big  Walnut  Apartments.   The
Partnership invests its working capital reserves in interest bearing accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the various  properties  to  adequately  maintain  the
physical  assets and other operating needs of the Partnership and to comply with
Federal,  state,  and local  legal and  regulatory  requirements.  The  Managing
General  Partner  monitors  developments  in the  area of legal  and  regulatory
compliance and is studying new federal laws, including the Sarbanes-Oxley Act of
2002. The Sarbanes-Oxley Act of 2002 mandates or suggests additional  compliance
measures with regard to governance,  disclosure, audit and other areas. In light
of these changes,  the  Partnership  expects that it will incur higher  expenses
related  to  compliance,  including  increased  legal  and audit  fees.  Capital
improvements  planned  for each of the  Partnership's  properties  are  detailed
below.

Big Walnut Apartments

During  the  three  months  ended  March 31,  2004,  the  Partnership  completed
approximately   $33,000  of  capital  improvements  at  Big  Walnut  Apartments,
consisting primarily of building  improvements and floor covering  replacements.
These improvements were funded from operating cash flow and insurance  proceeds.
The Partnership  evaluates the capital  improvement needs of the property during
the year and  currently  expects to complete an  additional  $105,000 in capital
improvements during the remainder of 2004.  Additional capital  improvements may
be considered and will depend on the physical  condition of the property as well
as replacement reserves and the anticipated cash flow generated by the property.

<PAGE>

The Trails Apartments

During  the  three  months  ended  March 31,  2004,  the  Partnership  completed
approximately   $12,000  of  capital  improvements  at  The  Trails  Apartments,
consisting  primarily  of  appliance  and  floor  covering  replacements.  These
improvements were funded from operating cash flow. The Partnership evaluates the
capital  improvement needs of the property during the year and currently expects
to complete an additional $124,000 in capital  improvements during the remainder
of 2004.  Additional  capital  improvements may be considered and will depend on
the  physical  condition of the  property as well as the  anticipated  cash flow
generated by the property.

Reflections Apartments

During  the  three  months  ended  March 31,  2004,  the  Partnership  completed
approximately   $41,000  of  capital  improvements  at  Reflections   Apartments
consisting  primarily of office  computers,  furniture  and  fixtures,  building
improvements and floor covering  replacements.  These  improvements  were funded
from  operating  cash flow. The  Partnership  evaluates the capital  improvement
needs of the  property  during the year and  currently  expects to  complete  an
additional  $279,000  in  capital  improvements  during the  remainder  of 2004.
Additional  capital  improvements  may be  considered  and  will  depend  on the
physical  condition  of the  property  as  well  as the  anticipated  cash  flow
generated by the property.

The  Partnership's  assets are thought to be sufficient for any near-term  needs
(exclusive  of  capital   improvements)   of  the   Partnership.   The  mortgage
indebtedness  encumbering  Reflections  Apartments of approximately  $13,449,000
matures  in  January  2029 at  which  time  the  loan is  scheduled  to be fully
amortized.  The  mortgage  note has a call option which allows for the lender to
declare  the  outstanding  principal  of the loan due and payable on February 1,
2009  and on every  fifth  anniversary  thereafter.  The  mortgage  indebtedness
encumbering  The Trails and Big Walnut  Apartments of  approximately  $9,401,000
matures  in 2007 and 2009 at which  time  balloon  payments  are  required.  The
Managing General Partner has the option to extend the maturity on the Big Walnut
Apartments  loan for another  five years.  The  Managing  General  Partner  will
attempt to refinance and/or sell the properties prior to such maturity dates. If
the  properties  cannot  be  refinanced  or sold for a  sufficient  amount,  the
Partnership may risk losing such properties through foreclosure.

Pursuant to the Partnership Agreement,  the term of the Partnership is scheduled
to expire on December 31, 2008. Accordingly,  prior to such date the Partnership
will need to either  sell the  investment  properties  or extend the term of the
Partnership.

No cash  distributions were made during the three months ended March 31, 2004 or
2003. The Partnership's cash available for distribution is reviewed on a monthly
basis. Future cash distributions will depend on the levels of net cash generated
from  operations,  the  availability  of cash  reserves,  and the timing of debt
maturities,  refinancings  and/or  property  sales.  In light of the significant
amounts  due to the  Managing  General  Partner  at March  31,  2004,  it is not
anticipated that the Partnership will make any  distributions in the foreseeable
future.

Other

In addition to its indirect  ownership of the  managing  and  associate  general
partner  interest in the  Partnership,  AIMCO and its  affiliates  owned  620.25
limited  partnership units ("Units") in the Partnership  representing  50.66% of
the  outstanding  Units at March 31, 2004. A number of these Units were acquired
pursuant to tender offers made by AIMCO or its  affiliates.  It is possible that
AIMCO or its affiliates will acquire  additional Units in exchange for cash or a
combination  of  cash  and  units  in  AIMCO  Properties,  L.P.,  the  operating
partnership  of AIMCO,  either  through  private  purchases  or  tender  offers.
Pursuant to the  Partnership  Agreement,  unitholders  holding a majority of the
Units are  entitled  to take action  with  respect to a variety of matters  that
include, but are not limited to, voting on certain amendments to the Partnership
Agreement and voting to remove the Managing General Partner.  As a result of its
ownership of 50.66% of the outstanding  Units, AIMCO is in a position to control
all such voting decisions with respect to the Partnership. Although the Managing
General  Partner  owes  fiduciary   duties  to  the  limited   partners  of  the
Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as
its sole stockholder.  As a result,  the duties of the Managing General Partner,
as managing  general  partner,  to the Partnership and its limited  partners may
come into conflict with the duties of the Managing  General Partner to AIMCO, as
its sole stockholder.

Critical Accounting Policies and Estimates

The consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the Partnership
to  make  estimates  and  assumptions.  The  Partnership  believes  that  of its
significant  accounting  policies,  the following may involve a higher degree of
judgment and complexity.

Impairment of Long-Lived Assets

Investment  properties  are  recorded at cost,  less  accumulated  depreciation,
unless  considered  impaired.  If  events  or  circumstances  indicate  that the
carrying  amount of a property may be  impaired,  the  Partnership  will make an
assessment of its  recoverability  by estimating  the  undiscounted  future cash
flows,  excluding  interest  charges,  of the property.  If the carrying  amount
exceeds the aggregate  future cash flows,  the  Partnership  would  recognize an
impairment  loss to the extent the carrying amount exceeds the fair value of the
property.

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's investment properties.  These factors include, but are not limited
to,  changes  in the  national,  regional  and  local  economic  climate;  local
conditions,  such as an oversupply of multifamily  properties;  competition from
other available  multifamily property owners and changes in market rental rates.
Any adverse changes in these factors could cause impairment of the Partnership's
assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
Rental income  attributable to leases is recognized monthly as it is earned. The
Partnership  evaluates all accounts receivable from residents and establishes an
allowance, after the application of security deposits, for accounts greater than
30 days past due on current tenants and all receivables due from former tenants.
The Partnership will offer rental concessions during particularly slow months or
in response to heavy  competition from other similar  complexes in the area. Any
concessions  given at the inception of the lease are amortized  over the life of
the lease.

ITEM 3.     CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures.  The Partnership's management,  with the
participation of the principal executive officer and principal financial officer
of the Managing  General  Partner,  who are the equivalent of the  Partnership's
principal executive officer and principal financial officer,  respectively,  has
evaluated  the  effectiveness  of  the  Partnership's  disclosure  controls  and
procedures (as such term is defined in Rules  13a-15(e) and 15d-15(e)  under the
Securities  Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this report.  Based on such  evaluation,  the principal
executive  officer  and  principal  financial  officer of the  Managing  General
Partner, who are the equivalent of the Partnership's principal executive officer
and principal  financial officer,  respectively,  have concluded that, as of the
end of such period,  the  Partnership's  disclosure  controls and procedures are
effective.

(b) Internal Control Over Financial  Reporting.  There have not been any changes
in the Partnership's  internal control over financial reporting (as such term is
defined in Rules  13a-15(f)  and  15d-15(f)  under the Exchange  Act) during the
fiscal quarter to which this report relates that have  materially  affected,  or
are reasonably likely to materially affect,  the Partnership's  internal control
over financial reporting.

<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the  Partnership,  its Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that are named as nominal  defendants,  challenging,  among  other
things,  the  acquisition  of  interests  in certain  Managing  General  Partner
entities by Insignia Financial Group, Inc.  ("Insignia") and entities that were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged into AIMCO.  The plaintiffs  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, during the third quarter of 2001, a complaint (the "Heller action")
was filed  against  the same  defendants  that are named in the  Nuanes  action,
captioned  Heller v.  Insignia  Financial  Group.  On or about  August 6,  2001,
plaintiffs filed a first amended  complaint.  The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary  duty,  unfair  competition,  conversion,  unjust  enrichment,  and
judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a Court  appointed
appraiser.  An affiliate of the Managing General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval,  if it is granted, and to
provide  partners with the independent  appraisals at the time of these tenders.
The proposed  settlement also provided for the limitation of the allowable costs
which  the  Managing   General   Partner  or  its  affiliates  will  charge  the
Partnerships  in connection with this litigation and imposes limits on the class
counsel  fees and  costs in this  litigation.  On April  11,  2003,  notice  was
distributed  to  limited   partners   providing  the  details  of  the  proposed
settlement.

On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector")  filed an  appeal  seeking  to  vacate  and/or  reverse  the  order
approving the settlement and entering  judgment  thereto.  On November 24, 2003,
the Objector filed an  application  requesting the Court order AIMCO to withdraw
settlement  tender offers it had  commenced,  refrain from making further offers
pending the appeal and auction any units tendered to third  parties,  contending
that the offers did not conform  with the terms of the  Settlement.  Counsel for
the Objector (on behalf of another  investor)  had  alternatively  requested the
Court take certain  action  purportedly  to enforce the terms of the  settlement
agreement.  On December 18, 2003,  the Court heard oral  argument on the motions
and denied them both in their entirety.  On January 28, 2004, Objector filed his
opening brief in his pending  appeal.  On April 23, 2004,  the Managing  General
Partner and its  affiliates  filed a response brief in support of the settlement
and the judgment  thereto.  Plaintiffs have also filed a brief in support of the
settlement.  Objector is  scheduled  to file a reply brief no later than May 13,
2004.

On August 8, 2003 AIMCO  Properties  L.P., an affiliate of the Managing  General
Partner,  was served  with a  Complaint  in the United  States  District  Court,
District of Columbia alleging that AIMCO Properties L.P.  willfully violated the
Fair Labor Standards Act (FLSA) by failing to pay maintenance  workers  overtime
for all hours  worked in excess of forty per week.  On March 5, 2004  Plaintiffs
filed an amended complaint also naming NHP Management Company,  which is also an
affiliate  of the  Managing  General  Partner.  The  Complaint  is  styled  as a
Collective  Action  under  the FLSA and seeks to  certify  state  subclasses  in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate  maintenance workers for
time  that they were  required  to be  "on-call".  Additionally,  the  Complaint
alleges AIMCO  Properties  L.P.  failed to comply with the FLSA in  compensating
maintenance  workers  for time that they  worked in  responding  to a call while
"on-call".  The Defendants have filed an answer to the Amended Complaint denying
the substantive allegations. Discovery is currently underway.

The  Managing  General  Partner  does  not  anticipate  that  any  costs  to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.


<PAGE>


ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a)    Exhibits

                  Exhibit 3.1,  Partnership  Agreement  dated June 11, 1984,  as
                  amended  is  incorporated  by  reference  to  Exhibit A to the
                  Prospectus of the  Registrant  dated October 16, 1984 as filed
                  with the Commission pursuant to Rule 424(b) under the Act.

                  Exhibit  3.2,  Amendment  No. 1 to the  Partnership  Agreement
                  dated August 1, 1985 is  incorporated  by reference to Exhibit
                  3B to the  Registrant's  Annual  Report  on Form  10-K for the
                  fiscal year ended December 31, 1985.

                  Exhibit 4.1, Certificate of Limited Partnership dated June 11,
                  1984  is  incorporated  by  reference  to  Exhibit  4  to  the
                  Registrant's  Annual  Report on Form 10-K for the fiscal  year
                  ended December 31, 1987.

                  Exhibit 4.2,  Certificate of Amendment of Limited  Partnership
                  dated July 17, 1984 is incorporated by reference to Exhibit 4A
                  to the Registrant's  Annual Report on Form 10-K for the fiscal
                  year ended December 31, 1987.

                  Exhibit 4.3, Restated Certificate of Limited Partnership dated
                  October 5, 1984 is  incorporated by reference to Exhibit 4B to
                  the  Registrant's  Annual  Report on Form 10-K for the  fiscal
                  year ended December 31, 1987.

                  Exhibit 31.1,  Certification  of equivalent of Chief Executive
                  Officer   pursuant   to   Securities    Exchange   Act   Rules
                  13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.

                  Exhibit 31.2,  Certification  of equivalent of Chief Financial
                  Officer   pursuant   to   Securities    Exchange   Act   Rules
                  13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.

                  Exhibit  32.1,  Certification  Pursuant  to 18 U.S.C.  Section
                  1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002.

            b) Reports on Form 8-K:

                  None filed during the quarter ended March 31, 2004.


<PAGE>


                                   SIGNATURES



In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.



                                    DAVIDSON DIVERSIFIED REAL ESTATE II, L.P.


                                    By:   Davidson   Diversified   Properties,
                                          Inc.
                                          Its Managing General Partner


                                    By:   /s/Martha L. Long
                                          Martha L. Long
                                          Senior Vice President


                                    By:   /s/Thomas M. Herzog
                                           Thomas M. Herzog
                                           Senior Vice President
                                          and Chief Accounting Officer


                                    Date: May 13, 2004



<PAGE>



Exhibit 31.1
                                  CERTIFICATION

I, Martha L. Long, certify that:


1.    I  have  reviewed  this  quarterly  report  on  Form  10-QSB  of  Davidson
      Diversified Real Estate II, L.P.;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the registrant as of, and for, the periods presented in this report;

4.    The  registrant's  other  certifying  officer(s) and I are responsible for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for the registrant
      and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            registrant,  including its consolidated subsidiaries,  is made known
            to us by others  within  those  entities,  particularly  during  the
            period in which this report is being prepared;

      (b)   Evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures and presented in this report our  conclusions  about
            the effectiveness of the disclosure  controls and procedures,  as of
            the  end  of the  period  covered  by  this  report  based  on  such
            evaluation; and

      (c)   Disclosed  in this  report any change in the  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

5.    The registrant's other certifying  officer(s) and I have disclosed,  based
      on  our  most  recent   evaluation  of  internal  control  over  financial
      reporting,  to the  registrant's  auditors and the audit  committee of the
      registrant's  board of directors  (or persons  performing  the  equivalent
      functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely affect the  registrant's  ability to
            record, process, summarize and report financial information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal control over financial reporting.

Date:  May 13, 2004
                                    /s/Martha L. Long
                                    Martha L. Long
                                    Senior Vice President of
                                    Davidson Diversified
                                    Properties, Inc., equivalent
                                    of the chief executive officer
                                    of the Partnership


<PAGE>


Exhibit 31.2
                                  CERTIFICATION

I, Thomas M. Herzog, certify that:


1.    I  have  reviewed  this  quarterly  report  on  Form  10-QSB  of  Davidson
      Diversified Real Estate II, L.P.;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the registrant as of, and for, the periods presented in this report;

4.    The  registrant's  other  certifying  officer(s) and I are responsible for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for the registrant
      and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            registrant,  including its consolidated subsidiaries,  is made known
            to us by others  within  those  entities,  particularly  during  the
            period in which this report is being prepared;

      (b)   Evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures and presented in this report our  conclusions  about
            the effectiveness of the disclosure  controls and procedures,  as of
            the  end  of the  period  covered  by  this  report  based  on  such
            evaluation; and

      (c)   Disclosed  in this  report any change in the  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

5.    The registrant's other certifying  officer(s) and I have disclosed,  based
      on  our  most  recent   evaluation  of  internal  control  over  financial
      reporting,  to the  registrant's  auditors and the audit  committee of the
      registrant's  board of directors  (or persons  performing  the  equivalent
      functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely affect the  registrant's  ability to
            record, process, summarize and report financial information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal control over financial reporting.

Date: May 13, 2004

                                    /s/Thomas M. Herzog
                                    Thomas M. Herzog
                                    Senior Vice President and Chief
                                    Accounting Officer of Davidson
                                    Diversified Properties, Inc.,
                                    equivalent of the chief
                                    financial officer of the
                                    Partnership


<PAGE>


Exhibit 32.1


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                Section 906 of the Sarbanes-Oxley Act of 2002



In connection with the Quarterly  Report on Form 10-QSB of Davidson  Diversified
Real Estate II, L.P. (the  "Partnership"),  for the quarterly period ended March
31, 2004 as filed with the Securities and Exchange Commission on the date hereof
(the "Report"), Martha L. Long, as the equivalent of the chief executive officer
of the  Partnership,  and  Thomas  M.  Herzog,  as the  equivalent  of the chief
financial  officer of the  Partnership,  each hereby  certifies,  pursuant to 18
U.S.C.  Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that, to the best of his knowledge:

      (1)   The Report fully complies with the  requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Partnership.


                                           /s/Martha L. Long
                                    Name:  Martha L. Long
                                    Date:  May 13, 2004


                                           /s/Thomas M. Herzog
                                    Name:  Thomas M. Herzog
                                    Date:  May 13, 2004

This  certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley  Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.