UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB

(Mark One)
[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

              For the quarterly period ended September 30, 2004


[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


             For the transition period from _________to _________

                         Commission file number 0-14483


                    Davidson Diversified Real Estate II, L.P.
        (Exact name of small business issuer 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)

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 ___


                         PART I - FINANCIAL INFORMATION


ITEM 1.     FINANCIAL STATEMENTS



                  Davidson Diversified Real Estate II, L.P.

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

                               September 30, 2004
<TABLE>
<CAPTION>


Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $ 252
   Receivables and deposits                                                      366
   Restricted escrows                                                             86
   Other assets                                                                  535
   Investment properties:
      Land                                                    $ 1,953
      Buildings and related personal property                   48,721
                                                                50,674
      Less accumulated depreciation                            (24,506)       26,168
                                                                            $ 27,407

Liabilities and Partners' Deficit

Liabilities
   Accounts payable                                                          $ 240
   Tenant security deposit liabilities                                           152
   Accrued property taxes                                                        354
   Other liabilities                                                             187
   Due to affiliates (Note B)                                                  8,366
   Mortgage notes payable                                                     22,520

Partners' Deficit
   General partners                                            $ (206)
   Limited partners (1,224.25 units issued and
      outstanding)                                              (4,206)       (4,412)
                                                                            $ 27,407


         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        Nine Months Ended
                                                  September 30,             September 30,
                                                 2004        2003         2004          2003
Revenues:                                                 (Restated)                 (Restated)
<S>                                            <C>          <C>          <C>          <C>
  Rental income                                $ 1,593      $ 1,405      $ 4,520      $ 4,008
  Other income                                      149         127           475          412
  Casualty gain (Note D)                             --          --             9            8
       Total revenues                             1,742       1,532         5,004        4,428

Expenses:
  Operating                                       1,039         824         2,543        1,985
  General and administrative                         52          71           229          227
  Depreciation                                      622         511         1,838        1,415
  Interest                                          368         338         1,068          916
  Property taxes                                   (141)        157           111          440
       Total expenses                             1,940       1,901         5,789        4,983

Loss from continuing
  operations                                       (198)       (369)         (785)        (555)
Loss from discontinued operations                    --          (6)          (47)        (208)
Gain on sale of discontinued
  operations (Note C)                                --           2            --        5,545

Net (loss) income                               $ (198)     $ (373)      $ (832)      $ 4,782

Net (loss) income allocated to general
  partners                                       $ (4)       $ (6)        $ (17)       $ 413
Net (loss) income allocated to limited
  partners                                         (194)       (367)         (815)       4,369

                                                $ (198)     $ (373)      $ (832)      $ 4,782
Per limited partnership unit:
  Loss from continuing
    operations                                 $(158.46)   $(295.69)    $ (628.14)   $ (444.35)
  Loss from discontinued operations                  --       (4.90)       (37.57)     (166.63)
  Gain on sale of discontinued operations            --        0.82            --     4,179.70

Net (loss) income                              $(158.46)   $(299.77)    $ (665.71)   $ 3,568.72

         See Accompanying Notes to Consolidated Financial Statements
</TABLE>


                  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 nine months
   ended September 30, 2004                 --           (17)        (815)      (832)

Partners' deficit at
   September 30, 2004                 1,224.25        $ (206)     $(4,206)   $(4,412)

         See Accompanying Notes to Consolidated Financial Statements
</TABLE>

                  Davidson Diversified Real Estate II, L.P.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                   Nine Months Ended
                                                                     September 30,
                                                                      2004     2003
                                                                            (Restated)
Cash flows from operating activities:
<S>                                                               <C>         <C>
  Net (loss) income                                               $ (832)     $ 4,782
  Adjustments to reconcile net (loss) income to net cash
   provided by operating activities:
     Depreciation                                                   1,838       1,459
     Casualty gain                                                     (9)         (8)
     Gain on sale of discontinued operations                           --      (5,545)
     Loss on early extinguishment of debt                              --          68
     Amortization of debt discounts and loan costs                     86         208
     Change in accounts:
      Receivables and deposits                                        194         245
      Other assets                                                   (109)       (106)
      Accounts payable                                               (83)        (102)
      Tenant security deposit liabilities                             (15)          2
      Accrued property taxes                                         (163)         78
      Other liabilities                                              (150)        (25)
      Due to affiliate                                                 10         223
         Net cash provided by operating activities                    767       1,279

Cash flows from investing activities:
  Property improvements and replacements                             (487)     (5,585)
  Net proceeds from sale of investment property                        --       2,547
  Insurance proceeds received                                           9          13
  Net deposits to restricted escrows                                   (1)         --
         Net cash used in investing activities                       (479)     (3,025)

Cash flows from financing activities:
  Advances from affiliates                                            405       5,190
  Payments on advances from affiliates                               (682)     (2,936)
  Payments on mortgage notes payable                                 (505)       (517)
  Loan costs paid                                                      --         (10)
         Net cash (used in) provided by financing activities         (782)      1,727

Net decrease in cash and cash equivalents                            (494)        (19)
Cash and cash equivalents at beginning of period                      746         591
Cash and cash equivalents at end of period                         $ 252       $ 572

Supplemental disclosure of cash flow information:
  Cash paid for interest                                           $ 983       $ 729
Supplemental disclosure of non-cash activity:
  Property improvements and replacements in accounts payable       $ 164      $ 1,057
  Mortgage assumed by buyer on sale of investment property         $ --       $ 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 September 30, 2003.

         See Accompanying Notes to Consolidated Financial Statements
</TABLE>

                  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 and nine months ended  September 30,
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 depends 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
$245,000 and $233,000  for the nine months  ended  September  30, 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  $151,000 and
$174,000 for the nine months ended  September  30, 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  $21,000 and $3,000 for the nine months ended  September  30, 2004
and 2003, respectively. 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  $405,000 and $5,190,000 during the nine
months ended  September 30, 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 $682,000 and $2,936,000 during
the same periods.

At  September  30,  2004,  the amount of the  outstanding  advances  and accrued
interest was approximately $8,366,000.  Interest is accrued at prime plus 1%, or
5.75% at September 30, 2004.  Interest  expense was  approximately  $326,000 and
$297,000 for the nine months ended  September  30, 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  September  30,  2004,  the  Partnership  received  an advance of
approximately $86,000 to pay operating expenses at Big Walnut Apartments.

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 September 30, 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 the nine months ended September 30, 2004 and
2003,  the  Partnership  was charged by AIMCO and its  affiliates  approximately
$89,000 and $54,000,  respectively,  for insurance  coverage and fees associated
with policy claims administration.

Note C - Sale of Investment Property

On January 30, 2003, the  Partnership  sold  LaFontenay I and II Apartments to a
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  $5,545,000 for the nine months ended
September  30,  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
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 nine
months  ended  September  30, 2003,  which  includes  revenues of  approximately
$179,000.  Included  in  discontinued  operations  for  the  nine  months  ended
September 30, 2004 is approximately  $47,000 of city income taxes related to the
sale of LaFontenay I and II Apartments.

Note D - Casualty Gains

During  the  nine  months  ended  September  30,  2003 a net  casualty  gain  of
approximately  $8,000 was recorded at Big Walnut  Apartments.  The casualty gain
related to a fire at the  property  in March  2003 that  damaged  two  apartment
units. The gain was the result of insurance  proceeds  received of approximately
$13,000 less the net book value of the damaged property of approximately $5,000.
During the nine months  ended  September  30,  2004,  the  Partnership  received
additional proceeds of approximately $9,000, which were recognized as a casualty
gain.

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  captioned Heller v.
Insignia  Financial  Group (the  "Heller  action")  was filed  against  the same
defendants  that are named in the  Nuanes  action.  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 (the "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.  The  Objector  filed a second
appeal challenging the court's use of a referee and its order requiring Objector
to pay those fees.

On January 28, 2004,  the  Objector  filed his opening  brief in the 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. The plaintiffs have
also filed a brief in support of the settlement. On June 4, 2004, Objector filed
a reply to the briefs  submitted by the Managing General Partner and Plaintiffs.
In addition both the Objector and plaintiffs filed briefs in connection with the
second  appeal.  The Court of Appeals  heard oral  argument  on both  appeals on
September 22, 2004 and took the matters under submission.

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.

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 the
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.  Some  discovery  has taken place and  settlement
negotiations  continue.  Although the outcome of any  litigation  is  uncertain,
AIMCO  Properties,  L.P. does not believe that the ultimate  outcome will have a
material  adverse  effect on its financial  condition or results of  operations.
Similarly,  the  Managing  General  Partner  does not believe  that the ultimate
outcome  will have a  material  adverse  effect on the  Partnership's  financial
condition or results of 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.

As  previously  disclosed,  the  Central  Regional  Office of the United  States
Securities  and  Exchange   Commission   (the  "SEC")  is  conducting  a  formal
investigation relating to certain matters.  Although the staff of the SEC is not
limited  in the  areas  that it may  investigate,  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,  capitalization  of payroll and certain  other  costs,  and tax
credit  transactions.  AIMCO is cooperating  fully. AIMCO is not able to predict
when the matter  will be  resolved.  AIMCO does not  believe  that the  ultimate
outcome  will  have a  material  adverse  effect on its  consolidated  financial
condition or results of operations. 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.

Note F - Restatement of September 30, 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 three
and nine months ended September 30, 2003, of approximately $81,000 and $276,000,
respectively,  as a net increase to expense. In addition,  depreciation  expense
for  Reflections  Apartments was understated for the three and nine months ended
September  30,  2003  by  approximately  $181,000  and  $329,000,  respectively.
Accordingly,  the  accompanying  consolidated  statements of operations  for the
three and nine months ended  September  30, 2003 have been restated to reflect a
reduction of operating  expenses of approximately $0 and $5,000,  an increase in
depreciation of approximately  $181,000 and $329,000 and an increase in interest
expense of approximately $81,000 and $281,000, respectively.

Note G - Indiana Property Taxes

During 2003,  the state of Indiana  implemented a  reassessment  of property tax
values.  The  Partnership   appealed  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 was based on the  property  tax value as
estimated by a third party property tax specialist.  During  September 2004, the
Partnership  was  successful in its appeal and the assessed value of Reflections
Apartments  was  reduced  for tax years  2002,  2003 and 2004.  During the three
months  ended  September  30,  2004 the  Partnership  recorded a  receivable  of
approximately  $137,000  for a refund  related  to 2002  taxes  paid in 2003 and
reduced  the  accruals  for  remaining  2003 taxes and  estimated  2004 taxes by
approximately $81,000 and $41,000, respectively.

<PAGE>

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR 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
nine months ended September 30, 2004 and 2003:

                                                     Average Occupancy
                                                      2004       2003
      Big Walnut Apartments
         Columbus, Ohio (1)                           81%         92%
      The Trails Apartments
         Nashville, Tennessee                         95%         96%
      Reflections Apartments
         Indianapolis, Indiana (2)                    87%         63%

(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.

(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 depend 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  that are
outside the control of the  Partnership  such as the local economic  climate and
weather can adversely or positively affect the Partnership's financial results.

Results of Operations

The  Partnership's  net loss for the three and nine months ended  September  30,
2004 was approximately $198,000 and $832,000, respectively, compared to net loss
of  approximately  $373,000 and net income of  approximately  $4,782,000 for the
corresponding  periods in 2003.  The  decrease in net loss for the three  months
ended  September  30, 2004 was due to an increase  in total  revenues  partially
offset by an increase in total expenses. The decrease in net income for the nine
months  ended  September  30, 2004 is  primarily  due to the gain on the sale of
LaFontenay I and II Apartments in 2003 as well as an increase in total  expenses
partially  offset by an increase in total  revenues  and a decrease in loss from
discontinued operations.

On January 30, 2003, the  Partnership  sold  LaFontenay I and II Apartments to a
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  $5,545,000 for the nine months ended
September  30,  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
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 nine
months  ended  September  30, 2003,  which  includes  revenues of  approximately
$179,000.  Included  in  discontinued  operations  for  the  nine  months  ended
September 30, 2004 is approximately  $47,000 of city income taxes related to the
sale of LaFontenay I and II Apartments.

Excluding the gain on sale of discontinued operations and loss from discontinued
operations,  the Partnership's loss from continuing operations for the three and
nine months ended  September  30, 2004 was  approximately  $198,000 and $785,000
compared  to loss from  continuing  operations  of  approximately  $369,000  and
$555,000 for the three and nine months ended  September 30, 2003,  respectively.
The  decrease in loss from  continuing  operations  for the three  months  ended
September 30, 2004 is due to an increase in total revenues  partially  offset by
an increase in total expenses.  The increase in loss from continuing  operations
for the nine  months  ended  September  30,  2004 is due to an increase in total
expenses  partially offset by an increase in total revenues.  Total revenues for
both  periods  increased  due to increases  in rental and other  income.  Rental
income  increased  due to an increase in  occupancy  at  Reflections  Apartments
partially  offset  by  decreases  in  occupancy  at Big  Walnut  and The  Trails
Apartments and a decrease in the average  rental rate at Big Walnut  Apartments.
Other income increased due to an increase in lease cancellation fees and utility
reimbursements at Reflections Apartments.

Total  expenses  for both  periods  increased  due to  increases  in  operating,
depreciation,  and interest expenses  partially offset by a decrease in property
tax expense.  Operating  expense  increased  due to  increases  in  advertising,
property,  insurance and maintenance  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  partially  offset by a  decrease  in  utility  costs at  Reflections
Apartments. Insurance expense increased due to an increase in the cost of hazard
insurance  at Big Walnut  Apartments.  Maintenance  expense  increased  due to a
decrease in operating expenses  capitalized as part of the renovation project at
Reflections Apartments and increases in contract labor and parts and supplies at
Big Walnut and Reflections  Apartments.  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. Property tax expense decreased due
to a decrease  in the  estimated  tax  accrual for  Reflections  Apartments,  as
discussed below.

During 2003,  the state of Indiana  implemented a  reassessment  of property tax
values.  The  Partnership   appealed  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 was based on the  property  tax value as
estimated by a third party property tax specialist.  During  September 2004, the
Partnership  was  successful in its appeal and the assessed value of Reflections
Apartments  was  reduced  for tax years  2002,  2003 and 2004.  During the three
months  ended  September  30,  2004 the  Partnership  recorded a  receivable  of
approximately  $137,000  for a refund  related  to 2002  taxes  paid in 2003 and
reduced  the  accruals  for  remaining  2003 taxes and  estimated  2004 taxes by
approximately $81,000 and $41,000, respectively.

Included in general and administrative expenses for 2004 and 2003 are management
reimbursements  to the Managing General Partner as 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.

During  the  nine  months  ended  September  30,  2003 a net  casualty  gain  of
approximately  $8,000 was recorded at Big Walnut  Apartments.  The casualty gain
related to a fire at the  property  in March  2003 that  damaged  two  apartment
units. The gain was the result of insurance  proceeds  received of approximately
$13,000 less the net book value of the damaged property of approximately $5,000.
During the nine months  ended  September  30,  2004,  the  Partnership  received
additional proceeds of approximately $9,000, which were recognized as a casualty
gain.

Liquidity and Capital Resources

At  September  30,  2004,  the  Partnership  had cash and  cash  equivalents  of
approximately $252,000 compared to approximately $572,000 at September 30, 2003.
Cash and cash equivalents  decreased  approximately  $494,000 since December 31,
2003 due to  approximately  $479,000 of cash used in  investing  activities  and
approximately  $782,000 of cash used in financing activities partially offset by
approximately  $767,000 of cash provided by operating  activities.  Cash used in
investing  activities  consisted of property  improvements  and replacements and
deposits to restricted  escrow accounts  partially offset by insurance  proceeds
from the casualty at Big Walnut  Apartments.  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.  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.  For example,  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.  Capital  improvements  planned for
each of the Partnership's properties are detailed below.

Big Walnut Apartments

During the nine months ended  September  30,  2004,  the  Partnership  completed
approximately  $453,000  of  capital  improvements  at  Big  Walnut  Apartments,
consisting  primarily of parking lot improvements,  fencing and gutter upgrades,
building  improvements  and appliance  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  $202,000  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.

The Trails Apartments

During the nine months ended  September  30,  2004,  the  Partnership  completed
approximately   $79,000  of  capital  improvements  at  The  Trails  Apartments,
consisting primarily of major landscaping 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 $59,000 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 nine months ended  September  30,  2004,  the  Partnership  completed
approximately   $119,000  of  capital  improvements  at  Reflections  Apartments
consisting primarily of office computers 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 $204,000 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  $13,293,000
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  Big Walnut and The Trails  Apartments of  approximately  $9,227,000
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 nine months ended September 30, 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 September  30, 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  656.50
limited  partnership units ("Units") in the Partnership  representing  53.62% of
the  outstanding  Units at  September  30,  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 53.62% 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  captioned Heller v.
Insignia  Financial  Group (the  "Heller  action")  was filed  against  the same
defendants  that are named in the  Nuanes  action.  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 (the "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.  The  Objector  filed a second
appeal challenging the court's use of a referee and its order requiring Objector
to pay those fees.

On January 28, 2004,  the  Objector  filed his opening  brief in the 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. The plaintiffs have
also filed a brief in support of the settlement. On June 4, 2004, Objector filed
a reply to the briefs  submitted by the Managing General Partner and Plaintiffs.
In addition both the Objector and plaintiffs filed briefs in connection with the
second  appeal.  The Court of Appeals  heard oral  argument  on both  appeals on
September 22, 2004 and took the matters under submission.

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.

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 the
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.  Some  discovery  has taken place and  settlement
negotiations  continue.  Although the outcome of any  litigation  is  uncertain,
AIMCO  Properties,  L.P. does not believe that the ultimate  outcome will have a
material  adverse  effect on its financial  condition or results of  operations.
Similarly,  the  Managing  General  Partner  does not believe  that the ultimate
outcome  will have a  material  adverse  effect on the  Partnership's  financial
condition or results of operations.



<PAGE>


ITEM 6.     EXHIBITS


            See attached Exhibit Index.

<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/Stephen B. Waters
                                           Stephen B. Waters
                                           Vice President



                                    Date: November 15, 2004


<PAGE>



                   DAVIDSON DIVERSIFIED REAL ESTATE II, LP
                                  EXHIBIT INDEX



Exhibit Number    Description of Exhibit


      3           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.

      3B          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.

      4           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.

      4A          Certificate of Amendment to 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.

      4B          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.

     10I          Contract  for Sale of Real  Estate for Big  Walnut  Apartments
                  dated December 6, 1984 between Community  Development Company,
                  an Ohio limited  partnership and Tennessee  Trust Company,  as
                  Trustee is  incorporated  by reference to Exhibit 10(b) to the
                  Registrant's Current Report on Form 8-K dated March 28, 1985.

     10J          Assignment of Contract for Sale of Real Estate dated March 22,
                  1985  between  Tennessee  Trust  Company,   Trustee,  and  the
                  Registrant,  relating to assignment of Purchase  Agreement for
                  Big Walnut  Apartments is incorporated by reference to Exhibit
                  10(a) to the  Registrant's  Current  Report  on Form 8-K dated
                  March 28, 1985.

     10K          Contract  for Sale of Real  Estate for The  Trails  Apartments
                  dated July 31, 1985 between  Trails of  Nashville  Associates,
                  Ltd., a Tennessee limited  partnership by reference to Exhibit
                  10(b) to the  Registrant's  Current  Report  on Form 8-K dated
                  August 30, 1985.

     10L          Assignment  of Contract  for Sale of Real Estate  dated August
                  28, 1985 between  Tennessee Trust Company,  as Trustee and the
                  Registrant,  relating to  assignment  of Contract  for Sale of
                  Real  Estate  for The Trails  Apartments  is  incorporated  by
                  reference to Exhibit 10(a) to the Registrant's  Current Report
                  on Form 8-K dated August 30, 1985.


<PAGE>



     10M          Contract  for  Sale  of Real  Estate  for  Greensprings  Manor
                  Apartments dated July 15, 1985 between Greensprings Apartments
                  Associates, an Indiana limited partnership and Tennessee Trust
                  Company,  as Trustee,  is incorporated by reference to Exhibit
                  20(d) to the  Registrant's  Current  Report  on Form 8-K dated
                  August 30, 1985.

     10N          Assignment  of Contract for Sale of Real Estate dated August
                  28, 1985 between  Tennessee  Trust  Company,  as Trustee and
                  the Registrant,  relating to assignment of Contract for Sale
                  of  Real  Estate  for   Greensprings   Manor  Apartments  is
                  incorporated   by   reference   to  Exhibit   10(c)  to  the
                  Registrant's  Current  Report on Form 8-K dated  August  30,
                  1985.

     10W          Deed of Trust and Security  Agreement  dated  December 1, 1984
                  between  Trails of  Nashville  Associates,  Ltd.,  and Capital
                  Holding  Corporation  relating  to The  Trails  Apartments  is
                  incorporated by reference to Exhibit 10QQ to the  Registrant's
                  Annual Report on Form 10-K for the fiscal year ended  December
                  31, 1985.

     10X          Note  dated   December  28,  1984   executed  by  Trails  of
                  Nashville  Associates,   Ltd.,  payable  to  The  Industrial
                  Development   Board  of  the   Metropolitan   Government  of
                  Nashville  and  Davidson   County  relating  to  The  Trails
                  Apartments is  incorporated  by reference to Exhibit 10RR to
                  the  Registrant's  Annual Report on Form 10-K for the fiscal
                  year ended December 31, 1985.

     10GG         Assignment   of  Limited   Partnership   Interest  of  Freeman
                  Equities,  Limited,  dated December 31, 1991 between  Davidson
                  Diversified Properties, Inc. and Insignia Jacques-Miller, L.P.
                  is   incorporated   by  reference  to  Exhibit  10KKK  to  the
                  Registrant's  Annual  Report on Form 10-K for the fiscal  year
                  ended December 31, 1991.

     10HH         Assignment of General Partner  Interests of Freeman  Equities,
                  Limited,  dated December 31, 1991 between Davidson Diversified
                  Properties,  Inc. and MAE GP  Corporation is  incorporated  by
                  reference to Exhibit 10LLL to the  Registrant's  Annual Report
                  on Form 10-K for the fiscal year ended December 31, 1991.

     10II         Stock  certificate,  dated December 31, 1991 showing ownership
                  of 1,000 shares of Davidson  Diversified  Properties,  Inc. by
                  MAE GP  Corporation  is  incorporated  by reference to Exhibit
                  10MMM to the  Registrant's  Annual Report on Form 10-K for the
                  fiscal year ended December 31, 1991.

     10OO         Multifamily  Note secured by a Mortgage or Deed of Trust dated
                  September  16,  2002,  between  Big  Walnut,   L.P.  and  GMAC
                  Commercial  Mortgage  Corporation,  a California  Corporation,
                  related to Big Walnut  Apartments is incorporated by reference
                  to the exhibit filed with the Form 10-QSB dated  September 30,
                  2002.

     10.4         Purchase and Sale  Contract  between  Registrant  and Connor &
                  Murphy,  Ltd., an Ohio limited  liability  company,  effective
                  November  26,  2002,  for  the  sale  of  Lafontenay  I  &  II
                  Apartments  incorporated  by  reference  to  the  Registrant's
                  Current Report on Form 8-K dated January 30, 2003.


<PAGE>



     10.5         Assignment  and  Assumption of Sale Contract  between Connor &
                  Murphy,   Ltd.,  an  Ohio  limited  liability   company,   and
                  Lafontenay Apartments, LLC, an Ohio limited liability company,
                  dated  January  22,  2003  incorporated  by  reference  to the
                  Registrant's  Current  Report  on Form 8-K dated  January  30,
                  2003.

     10.6         Promissory   Note  dated   December  11,  2003  between  AIMCO
                  Greenspring L.P., a Delaware limited  partnership,  and Golden
                  American  Life  Insurance  Company,  a  Delaware   corporation
                  incorporated by reference to the  Registrant's  Current Report
                  on Form 8-K dated December 11, 2003.

     10.7         Mortgage, Security Agreement,  Financing Statement and Fixture
                  Filing dated December 11, 2003 between AIMCO Greenspring L.P.,
                  a  Delaware  limited  partnership,  and Golden  American  Life
                  Insurance  Company,  a Delaware  corporation  incorporated  by
                  reference to the Registrant's Current Report on Form 8-K dated
                  December 11, 2003.

     10.8         Assignment of Rents and Leases dated December 11, 2003 between
                  AIMCO  Greenspring L.P., a Delaware limited  partnership,  and
                  Golden American Life Insurance Company, a Delaware corporation
                  incorporated by reference to the  Registrant's  Current Report
                  on Form 8-K dated December 11, 2003.

     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.

     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.

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

     99A          Agreement  of  Limited  Partnership  for  Big  Walnut,  L.P.
                  between Davidson Diversified  Properties,  Inc. and Davidson
                  Diversified  Real Estate II, L.P. entered into on August 23,
                  1991 is  incorporated  by  reference  to Exhibit  99A to the
                  Registrant's  Annual  Report on Form  10-KSB  for the fiscal
                  year ended December 31, 1992.



<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 small  business  issuer as of, and for, the periods  presented in this
      report;

4.    The  small  business  issuer'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 small business issuer 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
            small business issuer, 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  small  business   issuer'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 small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

5.    The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer'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 small business  issuer'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 small  business
            issuer's internal control over financial reporting.

Date:  November 15, 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, Stephen B. Waters, 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 small  business  issuer as of, and for, the periods  presented in this
      report;

4.    The  small  business  issuer'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 small business issuer 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
            small business issuer, 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  small  business   issuer'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 small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

5.    The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer'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 small business  issuer'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 small  business
            issuer's internal control over financial reporting.

Date: November 15, 2004

                                    /s/Stephen B. Waters
                                    Stephen B. Waters
                                    Vice President 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
September 30, 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 Stephen B. Waters, 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:  November 15, 2004


                                           /s/Stephen B. Waters
                                    Name:  Stephen B. Waters
                                    Date:  November 15, 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.