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

(Mark One)

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

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



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

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

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


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

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

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

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


Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

State the  number of shares  outstanding  of the  Trust's  sole  class of common
equity, $1.00 par value common stock, as of August 10, 2004: 1,289,129.








                                       1
<PAGE>



INDEX


                                                                            Page
PART I -     FINANCIAL INFORMATION

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

ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OR
             PLAN OF OPERATION                                                11

ITEM 3.      CONTROLS AND PROCEDURES                                          19

PART II -    OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS                                                19
ITEM 2.      CHANGES IN SECURITIES AND
             SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES             20
ITEM 3.      DEFAULTS UPON SENIOR SECURITIES                                  20
ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS              20
ITEM 5.      OTHER INFORMATION                                                20
ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K                                 20

SIGNATURES                                                                    22
EXHIBIT INDEX                                                                 23




                                       2
<PAGE>


PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                            MAXUS REALTY TRUST, INC.
                           CONSOLIDATED BALANCE SHEETS

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


                                                                                June 30,           December 31,
                                                                                 2004                2003
                                                                              (Unaudited)           ------
                                                                              -----------
ASSETS:
Investment property
   Land                                                                $       2,335,000           2,174,000
   Buildings and improvements                                                 32,684,000          30,891,000
   Personal property                                                           2,207,000           1,981,000
                                                                             -----------         -----------
                                                                              37,226,000          35,046,000
   Less accumulated depreciation                                              (6,307,000)         (5,601,000)
                                                                             -----------         -----------
           Total investment property, net                                     30,919,000          29,445,000


Cash                                                                           2,971,000             863,000
Escrows and reserves                                                           1,058,000             830,000
Accounts receivable                                                              490,000             388,000
Prepaid expenses and other assets                                                208,000             158,000
Deferred expenses, less accumulated amortization                                 502,000             423,000
                                                                             -----------         -----------
           Total assets                                                $      36,148,000          32,107,000
                                                                             ===========         ===========


LIABILITIES AND SHAREHOLDERS' EQUITY:

Liabilities:
   Mortgage notes payable                                              $      24,848,000          21,012,000
   Accounts payable, prepaid rent, and accrued expenses                          673,000             574,000
   Real estate taxes payable                                                     289,000             197,000
   Refundable tenant deposits                                                    152,000             130,000
                                                                             -----------         -----------
           Total liabilities                                                  25,962,000          21,913,000
                                                                             ===========         ===========
Minority interest                                                                137,000                 ---
Shareholders' equity:
   Common stock, $1 par value: authorized 5,000,000 shares,
     1,289,000 and 1,242,000 shares issued and outstanding
     at June 30, 2004 and December 31, 2003, respectively                      1,289,000           1,242,000
   Additional paid-in-capital                                                 17,830,000          17,309,000
   Distributions in excess of accumulated earnings                            (9,070,000)         (8,357,000)
                                                                             -----------         -----------
           Total shareholders' equity                                         10,049,000          10,194,000
                                                                             -----------         -----------
                                                                       $      36,148,000          32,107,000
                                                                             ===========         ===========
</TABLE>

See accompanying notes to consolidated financial statements.



                                       3
<PAGE>


                            MAXUS REALTY TRUST, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

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

                                                          Three Months Ended               Six Months Ended
                                                        June 30         June 30         June 30,       June 30,
                                                          2004            2003            2004          2003
                                                          ----            ----            ----          ----
Income
Revenues:
   Rental                                              1,429,000       1,373,000        2,790,000     2,786,000
   Other                                                 186,000         143,000          356,000       253,000
                                                     -----------     -----------      -----------   -----------

           Total revenues                              1,615,000       1,516,000        3,146,000     3,039,000
                                                     -----------     -----------      -----------   -----------

Expenses:
   Depreciation and amortization                         383,000         351,000          742,000       703,000
   Repairs and maintenance, including common
      area maintenance                                   192,000         182,000          357,000       318,000
   Real estate taxes                                     113,000         112,000          220,000       217,000
   General and administrative                             87,000          45,000          187,000       153,000
   Utilities                                              95,000          87,000          200,000       177,000
   Property management fees - related parties             76,000          70,000          147,000       139,000
   Other operating expenses                              340,000         306,000          634,000       572,000
                                                     -----------     -----------      -----------   -----------
           Total operating expenses                    1,286,000       1,153,000        2,487,000     2,279,000
                                                     -----------     -----------      -----------   -----------

       Net operating income                              329,000         363,000          659,000       760,000
                                                     -----------     -----------      -----------   -----------

   Interest income                                        (4,000)         (1,000)          (7,000)       (3,000)
   Interest expense                                      394,000         399,000          756,000       798,000
                                                     -----------     -----------      -----------   -----------
   Loss before minority interest and
       discontinued operations                           (61,000)        (35,000)         (90,000)      (35,000)
   Minority interest                                         ---             ---              ---           ---
   Loss from continuing operations                       (61,000)        (35,000)         (90,000)      (35,000)
   Loss from discontinued operations,
       including loss on disposal of $26,000 in 2003         ---         (35,000)             ---        (2,000)
                                                     -----------     -----------      -----------   -----------
           Net loss                                 $    (61,000)        (70,000)         (90,000)      (37,000)
                                                     ===========     ===========      ===========   ===========

Per share data (basic and diluted):
   Loss from continuing operations                  $       (.05)           (.03)            (.07)         (.03)
   Loss from discontinued operations                         ---            (.03)             ---           ---
                                                     -----------     -----------      -----------   -----------

           Total                                    $       (.05)           (.06)            (.07)         (.03)
                                                     ===========     ===========      ===========   ===========

   Distributions paid in current year               $        .25             .25              .50           .50
                                                     ===========     ===========      ===========   ===========

   Weighted average shares outstanding                 1,251,000       1,233,000        1,246,000     1,232,000
                                                     ===========     ===========      ===========    ==========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       4
<PAGE>



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

                                                                                              Six Months Ended
                                                                                         June 30,          June 30,
                                                                                           2004              2003
Cash flows from operating activities:
   Net loss                                                                        $     (90,000)           (37,000)
   Adjustments to reconcile net loss to net
     cash provided by operating activities of continuing operations:
       Loss from discontinued operations:                                                    ---              2,000
       Depreciation and amortization                                                     742,000            703,000
       Changes in accounts affecting operations:

           Accounts receivable                                                          (102,000)           (24,000)
           Prepaid expenses and other assets                                             (44,000)           (16,000)
           Escrows and reserves                                                         (219,000)               ---
           Accounts payable and other liabilities                                        144,000            121,000
                                                                                     -----------        -----------
               Net cash provided by operating activities of continuing operations        431,000            749,000
               Net cash provided by operating activities of discontinued operations          ---             20,000
                                                                                     -----------        -----------
               Net cash provided by operating activities                                 431,000            769,000

Cash flows from investing activities:
       Acquisition of Terrace Apartments                                                (193,000)               ---
       Capital expenditures                                                             (161,000)          (179,000)
                                                                                     -----------        -----------
               Net cash used in investing activities of continuing operations           (354,000)          (179,000)
               Net cash provided by investing activities
                    of discontinued operations                                               ---          4,787,000
                                                                                     -----------        -----------
               Net cash (used in) provided by investing activities                      (354,000)         4,608,000

Cash flows from financing activities:
       Principal payments on mortgage notes payable                                     (164,000)          (144,000)
       Proceeds from mortgage notes payable                                            2,250,000                ---
       Issuance of common stock                                                          568,000             61,000
       Distributions paid to shareholders                                               (623,000)          (615,000)
                                                                                     -----------        -----------
               Net cash provided by (used in) financing activities
                        of continuing operations                                       2,031,000           (698,000)
               Net cash used in financing activities
                       of discontinued operations                                            ---         (1,385,000)
                                                                                     -----------        -----------
               Net cash provided by (used in) financing activities                     2,031,000         (2,083,000)

               Net increase in cash                                                    2,108,000          3,294,000

Cash, beginning of period                                                                863,000             85,000
                                                                                     -----------        -----------

Cash, end of period                                                                $   2,971,000          3,379,000
                                                                                     ===========        ===========
Supplemental disclosure of cash flow information -
   cash paid during the six-month period for interest (2003 includes Atrium)       $     750,000            820,000
                                                                                     ===========        ===========

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

See accompanying notes to consolidated financial statements

</TABLE>




                                       5
<PAGE>



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

(1) Summary of Significant Accounting Policies

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

(2) Organization

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

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

(3) Segment Reporting

The Trust  has two  reportable  operating  segments--apartments  and  commercial
buildings.  The Trust's  management  evaluates the  performance  of each segment
based on  profit  or loss from  operations  before  allocation  of  general  and
administrative  expenses,  unusual and  extraordinary  items, and interest.  The
accounting  policies  of the  segments  are the  same  as  those  of the  Trust.
Operations at the Atrium at Alpha  Business  Center (the "Atrium") are presented
separately in Note 3 below. The Atrium was classified as held for sale beginning
May 14, 2003 and was previously included in the commercial  segment.  The Atrium
was sold May 29, 2003.

Following  is  information  for each segment for the three months ended June 30,
2004 and 2003:

                                       6
<PAGE>


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

                                                                                                    Total
                                                                                                    excluding
                                                               Commercial          Corporate        discontinued
June 30, 2004                              Apartments          buildings*          and other        operations
-------------                              ----------          ----------          ---------        ----------

Total revenues                            $ 1,381,000           234,000               ---            1,615,000
Income (loss) from continuing operations      (18,000)           42,000           (85,000)             (61,000)
Capital expenditures                           90,000               ---               ---               90,000
Depreciation and amortization                 323,000            60,000               ---              383,000
Interest expense                              303,000            91,000               ---              394,000

June 30, 2003
-------------

Total revenues                            $ 1,263,000           253,000               ---            1,516,000
Income (loss) from continuing operations      (44,000)           55,000           (46,000)             (35,000)
Capital expenditures                          113,000               ---               ---              113,000
Depreciation and amortization                 291,000            60,000               ---              351,000
Interest expense                              308,000            91,000               ---              399,000
</TABLE>

* Commercial buildings excludes discontinued operations at the Atrium.

Following is information for each segment for the six months ended June 30, 2004
and 2003:
<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>
                                                                                                     Total
                                                                                                     excluding
                                                               Commercial          Corporate         discontinued
June 30, 2004                               Apartments         buildings*           and other        operations
-------------                               ----------         ----------           ---------        ----------

Total revenues                            $ 2,678,000           468,000                 ---           3,146,000
Income (loss) from continuing operations       12,000            80,000            (182,000)            (90,000)
Capital expenditures                          161,000               ---                 ---             161,000
Depreciation and amortization                 621,000           121,000                 ---             742,000
Interest expense                              574,000           182,000                 ---             756,000
Assets                                     28,152,000         4,929,000           3,067,000          36,148,000


June 30, 2003
-------------

Total revenues                            $ 2,553,000           486,000                 ---           3,039,000
Income (loss) from continuing operations       32,000            86,000            (153,000)            (35,000)
Capital expenditures                          179,000               ---                 ---             179,000
Depreciation and amortization                 582,000           121,000                 ---             703,000
Interest expense                              615,000           183,000                 ---             798,000
Assets                                     26,799,000         5,106,000           3,410,000          35,315,000

</TABLE>

* Commercial buildings excludes discontinued operations at the Atrium.

(4) Property Acquisition and Disposition

Sale of the Atrium

The Trust follows the provisions of Statement of Financial  Accounting Standards
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"), which addresses financial  accounting and reporting for the impairment or
disposal of long-lived  assets.  This statement  establishes a single accounting
model  for  long-lived  assets  to  be  disposed  of  by  sale.  The  Trust  has
reclassified  its  Consolidated  Balance Sheet as of December 31, 2003,  and its
Consolidated  Statements of Operations and Consolidated  Statement of Cash Flows
for the three and six months ended June 30, 2003 in compliance  with SFAS 144 to
reflect discontinued  operations of the Atrium, which


                                       7
<PAGE>

was classified as held for sale on May 14, 2003.  This  reclassification  has no
impact on the  Trust's  net income or net income per share.  This  property  was
previously  included in the commercial  buildings segment.  On May 29, 2003, the
Trust sold the Atrium to an unrelated  third party.  The sale  resulted in a net
book loss of $26,000 and provided approximately $3,500,000 in net sale proceeds,
after the payoff of the related line of credit secured by the Atrium.


Operating information for Atrium for the three and six-month periods ended June
30, 2003 is set forth below:
<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                                              Three Months         Six Months
                                                                                  Ended              Ended
                                                                              June 30, 2003      June 30, 2003

Total revenue                                                              $     188,000             478,000
                                                                             -----------         -----------

Depreciation and amortization                                                     39,000             117,000
Repairs and maintenance, including
   common area maintenance                                                        57,000             114,000
Real estate taxes                                                                 36,000              92,000
Property management fees                                                           8,000              18,000
Utilities                                                                         33,000              56,000
Other                                                                             15,000              33,000
                                                                             -----------         -----------
     Total expenses                                                              188,000             430,000
                                                                             -----------         -----------

     Net operating income                                                            ---              48,000
                                                                             -----------         -----------

     Interest expense                                                              9,000              24,000
                                                                             -----------         -----------

Net income (loss) before loss on sale                                      $      (9,000)             24,000
                                                                             -----------         -----------

Loss on sale                                                                     (26,000)            (26,000)

Net loss                                                                   $     (35,000)             (2,000)
                                                                             ===========         ===========

Net loss per share                                                         $        0.03                 ---
                                                                             ===========         ===========
</TABLE>


Acquisition of the Terrace Apartments

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

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

David L. Johnson,  the Trust's  Chairman,  Chief Executive Officer and President
and  beneficial  owner of more than 10% of the  Trust's  issued and  outstanding
common stock, is the principal owner and President of DLJ Enterprises, Inc., the
general partner of Terrace Acquisition, L.P., and is the primary equity owner of
a limited  partner  of a  partnership  that owned  approximately  18% of Terrace
Acquisition,  L.P. DLJ  Enterprises,  Inc.  received a brokerage  commission  of
$72,000 in connection  with the closing of the  transaction in the form of 6,000
MOLP limited partnership operating units.

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

                                       8
<PAGE>


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

                                                           Three Months Ended              Six Months Ended
                                                        June 30,        June 30,         June 30,      June 30,
                                                          2004            2003             2004         2003
                                                          ----            ----             ----         ----

Total revenue                                          1,652,000       1,626,000        3,292,000     3,252,000

Depreciation and amortization                            395,000         387,000          791,000       776,000
Repairs and maintenance, including
     common area maintenance                             202,000         197,000          389,000       352,000
Real estate taxes                                        115,000         119,000          230,000       232,000
General and administrative                                87,000          45,000          187,000       153,000
Utilities                                                 99,000          94,000          213,000       196,000
Property management fees - related parties                78,000          75,000          155,000       150,000
Other                                                    352,000         339,000          678,000       632,000
                                                      ----------      ----------       ----------    ----------
       Total operating expenses                        1,328,000       1,256,000        2,643,000     2,491,000
                                                      ----------      ----------       ----------    ----------

       Net operating income                              324,000         370,000          649,000       761,000
                                                      ----------      ----------       ----------    ----------

       Interest income                                    (3,000)         (1,000)          (7,000)       (3,000)
       Interest expense                                  403,000         428,000          794,000       854,000
                                                      ----------      ----------       ----------    ----------
Loss before minority interest and
       discontinued operations                           (76,000)        (57,000)        (138,000)      (90,000)
Minority interest                                         (1,000)         (1,000)          (1,000)       (1,000)
Loss from continuing operations                          (75,000)        (56,000)        (137,000)      (89,000)
Loss from discontinued operations,
       including loss on disposal of $26,000 in 2003         ---         (35,000)             ---        (2,000)
                                                      ----------      ----------       ----------    ----------

Net loss                                            $    (75,000)        (91,000)        (137,000)      (91,000)
                                                      ==========      ==========       ==========    ==========

Net loss per share                                  $       (.06)           (.07)            (.11)         (.07)
                                                      ==========      ==========       ==========    ==========
</TABLE>

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

(5) Subsequent Events

Sale of the ACI Building

On April 28,  2004,  ACI  Financing,  L.L.C.,  a  subsidiary  of the Trust ("ACI
Financing"),  entered  into a  contract  to sell  the ACI  Building,  an  office
building located in Omaha, Nebraska (the "ACI Building"),  to an unrelated third
party, DBSI Housing Inc., an Idaho corporation ("DBSI"). The sale price is Eight
Million Two Hundred Two Thousand Five Hundred  Dollars  ($8,202,500)  before the
brokerage commission and other standard closing costs.

ACI Financing's lender,  Principal  Commercial Funding,  LLC, a Delaware limited
liability company, has refused to approve DBSI's assumption of the existing loan
secured by the ACI Building.  As a result, on August, 2, 2004, ACI Financing and
DBSI entered into an amendment to the contract pursuant to which:

     o    the parties  acknowledged  that the lender  would not  approve  DBSI's
          assumption of the existing loan;

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

                                       9
<PAGE>

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

     o    DBSI agreed to execute,  at the closing,  wrap around loan  documents,
          including (i) a promissory note payable to ACI Financing,  (ii) a deed
          of trust,  assignment of rents and security  agreement in favor of ACI
          Financing,   (iii)  an  indemnity  agreement  and  (iv)  a  management
          agreement; and

     o    DBSI  agreed to deposit  an  additional  $50,000  as an earnest  money
          deposit  with the escrow  agent (in  addition  to  $50,000  previously
          deposited).

As amended,  the  contract  provides  that DBSI will pay the  purchase  price by
executing  a  promissory  note in favor of ACI  Financing  in the  amount of the
outstanding  principal  amount and accrued interest of ACI Financing's loan from
the lender and paying the balance at the closing.

The  amendment to the contract  also provides that the closing shall occur on or
before August 15, 2004; provided, however, that DBSI may extend the closing date
an  additional 15 days upon written  notice to ACI  Financing and  depositing an
additional  $50,000 of earnest money with the escrow agent prior to the close of
business on August 15, 2004.

ACI  Financing's  current loan documents with its lender  includes a due on sale
clause that allows the lender to declare the entire principal amount and accrued
interest due immediately upon an event of default.  Under the loan documents ACI
Financing's  transfer  of the ACI  Building  to DBSI  requires  approval  of the
lender,  which the lender has refused to provide. As a result, upon consummation
of the sale of the ACI Building to DBSI without lender approval, ACI Financing's
lender  may  declare  the  entire  principal  amount  and  outstanding  interest
immediately  due and  payable,  which  as of June  30,  2004  was  approximately
$4,150,000. In addition, ACI Financing's loan agreement with the lender provides
that in an event of a default and  acceleration  of the loan, ACI Financing must
pay the lender a "Make Whole  Premium,"  which is defined to mean the greater of
(i) one percent (1%) of the outstanding  principal  amount of the loan or (ii) a
premium  calculated by determining  the present value of the payments to be made
in accordance with the promissory note discounted at the yield on the applicable
US  Treasury  Issue  for  the  number  of  months  remaining  from  the  date of
acceleration  to the  maturity  date,  which is  approximately  72  months.  The
Registrant  also  executed  a limited  guarantee  for the  benefit of the lender
guaranteeing  certain obligations of ACI Financing under its loan documents with
the lender.

There can be no assurance that this  transaction  will ultimately be consummated
with DBSI. In the event the transaction is ultimately consummated,  there can be
no  assurance  that the lender  will not (i) declare the full amount of the loan
immediately  due and payable,  (ii) request  payment of the Make Whole  Premium,
(iii)  foreclose upon the property and (iv) file a lawsuit to enforce its rights
against ACI Financing and the  Registrant.  There also can be no assurance  that
DBSI will have sufficient assets to support its  indemnification  obligations to
ACI Financing.

Purchase of Mississippi Apartments

On June 15, 2004, the Registrant entered into a Purchase and Sale Agreement (the
"Purchase  Agreement")  between LB 100 Arbor Gate  Circle LLC and LB 100 Waverly
Drive LLC  ("Sellers")  and the Registrant  pursuant to which the Registrant has
agreed to purchase two apartment complexes,  one of which is located in the City
of  Picayune,  Mississippi,  known  as 100  Arbor  Gate  Circle  (the  "Picayune
Property")  and the other of which is  located  in the City of Bay Saint  Louis,
Mississippi,  known as 100  Waverly  Drive  (the "Bay  Saint  Louis  Property"),
subject to the terms and conditions  provided in the Purchase  Agreement,  for a
purchase  price of $9.4 million,  subject to standard  closing  prorations.  The
Properties  are being  sold on an "as is,"  "where  is," and "with all  defects"
basis, without representation,  warranty or covenant on the part of the Sellers.
The  acquisition of the Properties  was subject to  Registrant's  due diligence,
which  ended  on  July  15,  2004.  The  acquisition  of the  Properties  is not
contingent  upon the  ability  of the  Registrant  to obtain  financing  for the
acquisition.  Management  anticipates  funding the acquisition of the Properties
from cash on hand and a mortgage loan on the Properties. The Registrant has paid
$235,000 of the Purchase Price to an escrow agent as a deposit.


                                       10
<PAGE>

The closing of the sale is tentatively  scheduled for no later than September 9,
2004; provided, that Sellers may extend the closing date for an additional sixty
(60) days if Sellers are unable to convey  insurable  title on the closing date.
The closing is subject to other standard closing conditions,  including, without
limitation,  conveyance to buyer of insurable title in and to the Properties and
delivery of a title policy.

At the closing,  the Registrant will pay a broker's fee of $141,000,  $70,500 of
which will be paid to an unrelated third party and $70,500 of which will be paid
to Maxus  Properties,  Inc. ("Maxus  Properties"),  the Registrant's  management
company.  The Registrant's  chief executive officer and current trustee David L.
Johnson and current trustee Christopher J. Garlich are principal owners of Maxus
Properties, and Mr. Johnson is Chairman of Maxus Properties.

The Registrant  anticipates assigning its rights under the Purchase Agreement to
two  wholly  owned  subsidiaries  of its  operating  limited  partnership  Maxus
Operating Limited  Partnership (the "Intended  Assignees") prior to the closing.
The  Purchase   Agreement   requires  the  Intended   Assignees  to  assume  all
representations, warranties and indemnities of the Registrant under the Purchase
Agreement.  The  Registrant  anticipates  that the Intended  Assignees will make
these assumptions and otherwise shall constitute  permitted  assignees under the
Purchase Agreement.

There can be no assurance that this  transaction will ultimately be consummated.
The Sellers are each unrelated third parties.

The  Picayune  Property is a 120-unit  apartment  complex  located in  Picayune,
Mississippi; the Bay Saint Louis Property is a 128-unit apartment complex in Bay
Saint Louis, Mississippi.

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

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

CRITICAL ACCOUNTING POLICIES

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


                                       11
<PAGE>


Revenue Recognition

Lease  agreements are accounted for as operating  leases,  and rentals from such
leases are  reported  as  revenues  ratably  over the terms of the  leases.  The
recognition  of scheduled  rent  increases on a  straight-line  basis results in
recognition of a receivable. Such receivable was $373,000 at June 30, 2004.

The Trust  believes this  receivable  will be  collectable  over the life of the
lease. If the lease was terminated,  the receivable could become  uncollectable.
However,  because the  receivable  represents  future cash  earnings,  the Trust
believes the risk of uncollectability is immaterial.

Investment Property Useful Lives

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

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

Capital Expenditures

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

Classification of Properties

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

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

Impairment of Investment Property Values

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

The Trust  follows  the  provisions  of SFAS No.  144.  The Trust  assesses  the
carrying  value  of  its  long-lived   asset  whenever   events  or  changes  in
circumstances  indicate that the carrying amount of the underlying asset may not
be  recoverable.  Certain factors that may occur and indicate that an impairment
may exist include, but are not limited to: significant underperformance relative
to projected future operating results;  significant changes in the manner of the
use of the asset; and significant adverse industry or market economic trends. If
an  indicator  of  possible  impairmentexists,   a  property  is  evaluated  for
impairment by a comparison of the carrying amount of a property to the estimated
undiscounted future cash flows expected to be generated by the property.  If the
carrying amount of a property


                                       12
<PAGE>


exceeds its estimated future cash flows on an undiscounted  basis, an impairment
charge is recognized by the amount by which the carrying  amount of the property
exceeds the fair value of the property.  Management  estimates fair value of its
properties  based on  projected  undiscounted  cash flows using a discount  rate
determined by management to be commensurate with the risk inherent in the Trust.

DESCRIPTION OF BUSINESS

OVERVIEW

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

General  economic  trends that  management  evaluates  include  construction  of
apartment units (supply),  unemployment  rates,  job growth,  and interest rates
(demand).  The apartment  segment is sensitive to extremely low interest  rates,
which tend to increase home ownership and decrease  apartment  occupancy  rates.
The apartment segment is also sensitive to increased  unemployment  rates, which
tend to cause  possible  renters  to double  up in a unit or share a  non-rental
dwelling with relatives or  acquaintances.  New construction in an area with low
occupancy  rates can cause a further  decline in occupancy or rental rates.  The
lease  with  the  commercial  tenant,  which  occupies  100%  of the  commercial
property,  is not as sensitive to general economic conditions,  but is sensitive
to the success of the tenant in their business.

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

The Trust invests in income-producing real properties,  primarily apartments and
commercial buildings. As of June 30, 2004 the Trust's portfolio is comprised of:
<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                      SQUARE
                                       FEET/
PROPERTY                              # UNITS           TYPE             LOCATION            PURCHASE
                                                                                               DATE

ACI Worldwide, Inc. (formerly          70,000        Single Tenant       Omaha, NE             January, 1986
Applied Communications, Inc.)                        Office
("ACI")

Forest Park Apartments                    110        Apartments          Kansas City, MO       August, 2000
("Forest Park")
(f.k.a. North Winn)

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

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


                                       13
<PAGE>


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

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

Barrington Hills Apartments               232        Apartments          Little Rock, AR       November, 2001
("Barrington Hills")
</TABLE>


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

UPREIT Structure

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

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

Acquisition of The Terrace Apartments

On April 30, 2004, the Trust, through one of the Trust's subsidiaries,  acquired
The  Terrace  Apartments  in  the  transaction   described  below.  The  Terrace
Apartments  are  located in Olathe,  Kansas and  contain  eighty-four  apartment
units.

On December 22, 2003, Terrace Acquisition, L.P. (the "Partnership") entered into
an Agreement and Plan of Merger with Kings Court/Terrace Acquisition,  L.L.C., a
Missouri  limited  liability  company  ("Kings  Court LLC").  Kings Court LLC is
wholly  owned by MOLP,  which in turn is owned by the Trust.  Under the terms of
the merger agreement, Kings Court LLC was the surviving entity which effectively
resulted  in  Kings  Court  LLC  succeeding  to the  ownership  of  The  Terrace
Apartments, the Partnership's sole asset.

In consideration for the merger, the Trust:

     o    Issued  5,455  MOLP  limited  partnership  operating  units  valued at
          approximately $65,460 to certain of the Partnership's limited partners
          electing to receive units and qualifying as accredited investors under
          the Securities Act of 1933, as amended, and

     o    Made   cash   payments   totaling   approximately   $172,000   to  the
          Partnership's   limited  partners  from  the  Trust's  available  cash
          reserves.

     o    Assumed  a  mortgage  loan  of   approximately   $1,650,000   and  the
          Partnership's  other liabilities  valued for purposes of the merger at
          approximately $89,000.


                                       14
<PAGE>

The consideration  paid was based on a 2003 third party appraisal of The Terrace
Apartments. David L. Johnson, Chairman, Chief Executive Officer and President of
the  Trust  and  beneficial  owner of more than 10% of the  Trust's  issued  and
outstanding   common  stock,  is  the  principal  owner  and  President  of  DLJ
Enterprises,  Inc., the general partner of the  Partnership,  and is the primary
equity owner of a limited partner of a partnership that owned  approximately 18%
of  Terrace  Acquisition,  L.P.  DLJ  Enterprises,  Inc.  received  a  brokerage
commission of $72,000 in connection  with the closing of the  transaction in the
form of 6,000 MOLP limited partnership operating units.

ACI,  Forest Park,  King's  Court/Terrace,  Chalet,  the Landings and Barrington
Hills are each  owned by single  member  limited  liability  companies  that are
directly owned by MOLP.

Maxus Properties  provides property  management services for each of the Trust's
real properties.

LIQUIDITY AND CAPITAL RESOURCES

Cash as of June 30, 2004 was  $2,971,000,  an increase  of  $2,108,000  from the
balance of $863,000 at December 31, 2003.  Escrows and reserves  held by various
lenders  were  $1,058,000  and  $830,000 at June 30, 2004 and December 31, 2003,
respectively,  and are not readily available for current disbursement.  Net cash
provided by operating activities of continuing  operations decreased $338,000 to
$431,000 for the six-month period ended June 30, 2004 primarily  attributable to
$219,000 of escrows and reserves  being  funded in 2004  compared to $0 in 2003.
Net cash used in investing  activities  of continuing  operations  was $354,000,
comprised  of  $193,000  for the net  cash  outlay  for the  merger  of  Terrace
Apartments  and  $161,000  for  capital   expenditures.   The  largest   capital
expenditures  included  $87,000  for  capital  replacements  at  all  properties
combined,  along with  approximately  $18,000 on roofs at Kings Court.  Net cash
provided by financing activities of continuing  operations was $2,031,000.  Cash
of $2,250,000 (net of $100,000 of financing costs) was provided by the financing
of Kings Court,  which  previously  was not  financed.  Distributions  were paid
totaling  $623,000  and cash was  provided  by  issuance  of  common  stock  for
$568,000.

Management  believes  the Trust's  current  cash  position  and the  properties'
ability to generate  operating and financing  cash flows should enable the Trust
to fund  anticipated  operating  and  capital  expenditures  in 2004.  Projected
capital  expenditures of approximately  $170,000,  are currently planned for the
remainder of 2004, primarily for roofs, HVAC and plumbing and painting projects,
with the majority of the  expenditures  expected to be reimbursed  from reserves
held by  lenders.  Capital  replacements  of  approximately  $158,000  are  also
expected to be reimbursed  from  reserves held by lenders.  Except for the items
mentioned,  management does not anticipate any material capital  expenditures at
any one  property  in  2004.  However,  the  Trust  will  continue  to  evaluate
opportunities  for the  acquisition  of  investment  properties  and  may  incur
material   capital   expenditures   in   connection   with   these   acquisition
opportunities.

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

On April 28, 2004 a subsidiary of the Trust entered into a contract for the sale
of the ACI Building.  This contract is described in more detail in note 4 to the
Unaudited Consolidated Financial Statements above.

Contractual Obligations and Commercial Commitments
<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>


                               Balance at               Interest                      Due
                              June 30, 2004               Rate

ACI                             4,150,000                 8.63%                  August 1, 2010

Forest Park                     1,877,000                 4.91%                  September 1, 2007

Kings Court/Terrace             2,346,000                 3.34%                  May 1, 2034

Terrace                         1,645,000                 6.87%                  February 1, 2009


                                       15
<PAGE>


Chalet I                        3,956,000                 6.59%                  October 1, 2008

Chalet II                       1,493,000                 6.535%                 October 1, 2008

The Landings                    3,695,000                 7.66%                  September 1, 2007

Barrington Hills                5,686,000                 6.035%                 July 1, 2029
                              -----------

Total                        $ 24,848,000
                              ===========
</TABLE>


Reference is also made to Note 2 of Notes to Financial  Statements  incorporated
by reference in the Trust's  Annual Report on Form 10-KSB for a  description  of
mortgage  indebtedness secured by the Trust's real property investments On April
30, 2004, the Trust assumed the mortgage on Terrace, and also secured additional
financing  secured  by Kings  Court,  which  was not  previously  financed,  and
Terrace.

OFF-BALANCE SHEET ARRANGEMENTS

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

RESULTS OF OPERATIONS

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

Funds from Operations

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

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

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


                                       16
<PAGE>

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


                                                Three Months Ended                          Six Months Ended
                                               June 30,      June 30,                    June 30,       June 30,
                                                 2004          2003                        2004           2003

       Net income (loss)                       (61,000)      (70,000)                    (90,000)       (37,000)
       Property related depreciation
          and amortization (1)                 365,000       379,000                     707,000        798,000
       Loss on sale                                ---        26,000                         ---         26,000
                                              --------      --------                    --------       --------
       Funds from operations               $   304,000       335,000                  $  617,000        787,000
                                              ========      ========                    ========       ========
</TABLE>

(1) For  the  three  and six  months  ended  June  30,  2003,  depreciation  and
amortization of the Atrium of $39,000, and $117,000, respectively is included in
this amount.

Occupancy

The occupancy levels at June 30 were as follows:
<TABLE>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                             OCCUPANCY LEVELS AT JUNE 30,
                                                              2004                  2003

         ACI                                                  100%                  100%
         Forest Park                                           86%                   97%
         King's Court/Terrace (1)                              93%                   96%
         Chalet                                                97%                   93%
         The Landings                                          97%                   94%
         Barrington Hills                                      97%                   94%
</TABLE>


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

The ACI building has a single tenant, which has occupied the building throughout
2004. The lease expires in August 2008.

In 2002 the parent  company  of the  single  tenant  restated  its  consolidated
financial  statements.  In  connection  with the  restatement  of its  financial
statements,  two class action lawsuits have been publicly  announced against the
parent company and certain of its former and present officers and directors. The
lawsuits, which have now been consolidated, allege violations of securities laws
on the grounds  that  certain of the parent  company's  Exchange Act reports and
press releases  contained  untrue  statements of material  facts,  or omitted to
state facts necessary to make the statements therein not misleading.  Derivative
action  lawsuits  have also been filed on behalf of the parent  company  against
certain named officers and directors of the parent  company.  The parent company
has publicly  reported that if it were to lose any of these  lawsuits or if they
were not settled on  favorable  terms,  the  judgment or  settlement  may have a
material adverse effect on the parent company's consolidated financial position,
results of operations and cash flows.  The Trust is monitoring  this  litigation
closely,  but is unable at this time to  determine  what impact,  if any,  these
lawsuits will have on the tenant's ability to meet its payment obligations under
its lease with the Trust.  The  balance  of the  receivable  due from ACI to the
Trust was $373,000 at June 30, 2004,  comprised of recognition of scheduled rent
increases on a straight-line basis.

Forest  Park ended the second  quarter of 2004 at 86%  occupancy.  The  Northern
Kansas City,  Missouri market conditions  continue to show heavy concessions and
average  occupancy of 90%.  King's  Court/Terrace  occupancy was 93% at June 30,
2004.  Olathe,  Kansas area markets continue to have average  occupancy rates of
mid-to-high 80% range and  concessions  are common in the market,  due to excess
supply and low interest  rates.  Occupancy  rates in the Topeka,  Kansas  market
averaged  approximately  90% for 2003,  however,  concessions  in the market are
extensive.  Chalet,  which is  located  in  Topeka,  ended  the  quarter  at 97%
occupied,  with concessions being reduced. The Landings and Barrington Hills are
both  located in Little Rock,  Arkansas,  where the market  occupancy  rates are
currently in the mid 90% range.  The Landings and Barrington Hills had occupancy
of 97% on June 30,  2004.  Concessions  in the Little Rock area have not been as
significant as in some other parts of the country.


                                       17
<PAGE>


Comparison of Consolidated Results From Continuing Operations

For  the  three  and  six  month  periods  ended  June  30,  2004,  the  Trust's
consolidated revenues from continuing operations were $1,615,000 and $3,146,000,
respectively.  Revenues  increased  $99,000  (6.5%) and $107,000  (3.5%) for the
three and six-month  periods ended June 30, 2004 as compared to the same periods
ended June 30, 2003.  The  increase in  consolidated  revenue for the  six-month
period is  primarily  attributable  to a $125,000  increase  in income  from the
Apartment  Segment,  offset by a  decrease  in CAM  reimbursements  at ACI.  The
increase in income in the Apartment  Segment is primarily due to the acquisition
of Terrace Apartments. The combined income from Kings Court/Terrace increased by
approximately  $67,000  when  compared to the same period in 2003.  Revenue also
increased  by  $35,000 at  Chalet,  due to  increased  occupancy  and  decreased
concessions.  Revenue  increased at  Barrington  by $25,000  primarily due to an
increase in other income.

For  the  three  and  six  month  periods  ended  June  30,  2004,  the  Trust's
consolidated  operating expenses from continuing  operations were $1,286,000 and
$2,487,000,  respectively.  Expenses  increased  $133,000  (11.5%) and  $208,000
(9.1%) for the three and  six-month  periods  ended June 30, 2004 as compared to
the same periods  ended June 30, 2003.  The increase in  consolidated  operating
expenses  for the  six-month  period  is  primarily  attributable  to a  $62,000
increase  in  other  operating  expense,  a  $39,000  increase  in  repairs  and
maintenance  expense,  a $39,000 increase in depreciation and a $34,000 increase
in general and administrative expenses. The increase in other operating expenses
was  due  primarily  to  increased   payroll  and  collection   costs  at  Kings
Court/Terrace  ($41,000) and Forest Park  ($13,000).  The increase in repair and
maintenance  expenses  occurred  primarily at the Landings  ($25,000) and King's
Court/Terrace ($20,000) and was comprised of various items significant only as a
whole.  The increase in  depreciation  expense is primarily due to the merger of
the Terrace Apartments. General and administrative expense increased compared to
the prior year primarily due to increased  professional fees in conjunction with
the formation of the UPREIT  structure and costs related to the Terrace  merger.
The combined operating expenses at Kings  Court/Terrace for the six-month period
ended June 30, 2004  increased by  approximately  $121,000  when compared to the
same period in 2003.

The net loss from  continuing  operations  for the  three and six month  periods
ended June 30, 2004 was  ($61,000)  or ($.05) per share and  ($90,000) or ($.07)
per share,  respectively.  The net loss from continuing operations for the three
and six month  periods ended June 30, 2003 was ($35,000) or ($.03) per share and
($35,000) or ($.03) per share, respectively.

Comparison of Results from Continuing Operations by Segment

For the  three and six month  periods  ended  June 30,  2004,  revenues  for the
Trust's  Commercial  Building Segment  (excluding the Atrium)  decreased $19,000
(7.5%) and $18,000  (3.7%),  respectively,  as compared to the same time periods
last year. This increase is primarily due to a decrease in CAM  reimbursement of
$18,000 from prior year.  CAM  reimbursements  of $18,000  were  received in the
quarter ended June 30, 2003,  and a similar amount is expected to be received in
the quarter ended September 30, 2004.

For the  three and six month  periods  ended  June 30,  2004,  expenses  for the
Commercial  Buildings  Segment  (excluding  the  Atrium)  decreased  $6,000  and
$12,000, respectively, as compared to 2003 results for the same periods.

For the  three and six month  periods  ended  June 30,  2004,  revenues  for the
Apartments Segment increased $118,000 (9.3%) and $125,000 (4.9%),  respectively,
from the  periods  ended  June  30,  2003,  due to  increased  revenue  at Kings
Court/Terrace, Chalet and the Landings.

For the  three and six month  periods  ended  June 30,  2004,  expenses  for the
Apartments  Segment increased $92,000 (7.0%) and $145,000 (5.8%),  respectively,
primarily due to the merger of the Terrace Apartments.

MARKET RISK

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


                                       18
<PAGE>

commodity instruments at June 30, 2004.

The Trust does not believe  that it has any material  exposure to interest  rate
risk.  The debt on the ACI  building is at a fixed rated of 8.63% and matures in
2010;  the debt on the Landings is at a fixed rate of 7.66% and matures in 2007;
the debt on Chalet is at fixed  rates of 6.59% and 6.535%  and  matures in 2008;
and the debt on  Barrington  Hills is at a fixed rate of 6.035%,  is repriced in
2009 and  matures  in 2029.  The debt on Terrace is at a fixed rate of 6.87% and
matures  in 2009.  The debt on  Forest  Park and  King's  Court/Terrace  is at a
variable rate and matures in 2007 and 2034,  respectively.  The current interest
rate on Forest  Park is 4.91% and  King's  Court/Terrace  is 3.34%.  A 100 basis
point  increase in the  variable  rate debt on an annual  basis would impact net
income by approximately $42,000.

INFLATION

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

ITEM 3:   CONTROLS AND PROCEDURES

          (a)  Evaluation of disclosure controls and procedures.

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

          (b)  Changes in internal controls

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


PART II   OTHER INFORMATION


ITEM 1.   LEGAL PROCEEDINGS

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

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


                                       19
<PAGE>

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

          (a)  On April 30,  2004,  the Trust  issued MOLP  limited  partnership
               units in connection  with The Terrace  Apartments as described in
               more  detail  under  the  captions  "Acquisition  of The  Terrace
               Apartments"  and  "UPREIT"  Structure".  In June  2004 the  Trust
               completed  a private  placement  pursuant to which it sold 41,668
               shares of the Trust's  $1.00 par value common stock at $12.00 per
               share, raising an aggregate of $500,016.  The shares were sold to
               David  Watson,   an  individual   unaffiliated  with  the  Trust,
               Christopher  J.  Garlich,  a trustee of the  Trust,  and David L.
               Johnson,  Chairman,  Chief Executive Officer and President of the
               Trust.  No commissions  were paid in connection  with the private
               placement.  The  Trust  relied on the  SEC's  Rule 506  exemption
               (Regulation D) from registration for both offerings, offering the
               MOLP units and the  Trust's  common  stock  solely to  accredited
               investors (as defined in Rule 502).

           (b) None

           (c) None

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

           None

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

           On  May 11, 2004,  the Trust held its Annual Meeting of Shareholders.
           At the meeting the shareholders elected seven trustees to hold office
           until the  next  Annual  Meeting  of  Shareholders  and  until  their
           successors are elected and qualify.

           The following individuals  were the nominees of management voted upon
           and elected  as  trustees  by the  shareholders  of the  Trust at the
           meeting: Monte McDowell,  Danley K. Sheldon, Jose Evans, Kevan Acord,
           David L. Johnson,  Chris  Garlich and W. Robert  Kohorst.  There were
           958,025 votes "for" Mr. McDowell and 10,975 votes  "withheld."  There
           were  958,025  votes "for" Mr.  Sheldon and 10,975 votes  "withheld."
           There were 958,225 votes "for" Mr. Evans and 10,775 votes "withheld."
           There were 958,225 votes "for" Mr. Acord and 10,775 votes "withheld."
           There  were  948,775   votes  "for"  Mr.   Johnson  and 20,225  votes
           "withheld."  There were  958,225  votes  "for" Mr. Garlich and 10,975
           votes "withheld." There were 958,225 votes "for" Mr.
           Kohorst and 10,775 votes "withheld."

 ITEM 5.   OTHER INFORMATION

           None

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

           (a) Exhibits

               See Exhibits Index on Page 23

           (b) Reports on Form 8-K

               On May 4, 2004,  Trust  filed a Form 8-K under  Item 5  reporting
               that one of its  subsidiaries had entered into a contract to sell
               the ACI Building,  and that one of its  subsidiaries had acquired
               The Terrace Apartments. (File Number 000-13754.)

               On  June  9,  2004,  the  Trust  filed a Form  8-K  under  Item 5
               reporting  that the Trust received a notice from the Nasdaq Stock
               Market  ("Nasdaq") that it was not in compliance with the minimum
               $10,000,000   stockholders'   equity  requirement  for  continued
               listing on the Nasdaq  National


                                       20
<PAGE>

               Market as of March 31,  2004;  and that the  Trust  responded  to
               Nasdaq on June 7, 2004  noting  that  management  believes it has
               been in  compliance  with the  minimum  requirement  since May 1,
               2004. (File Number 000-13754.)

               On  July  1,  2004,  the  Trust  filed a Form  8-K  under  Item 5
               reporting  that the Trust  received a letter from Nasdaq  stating
               that its staff believed the Trust had provided a definitive  plan
               to  achieve  and   sustain   compliance   with  the   $10,000,000
               stockholders' equity requirement. (File Number 000-13754.)

               On July  29,  2004,  the  Trust  filed a Form  8-K  under  Item 5
               reporting that on June 15, 2004 the Trust entered into a purchase
               agreement  to  purchase  two  apartment   complexes   located  in
               Mississippi. (File Number 000-13754.)











                                       21
<PAGE>



SIGNATURES

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

                                          MAXUS REALTY TRUST, INC.

Date: August 13, 2004                 By: /s/ David L. Johnson
                                          --------------------
                                          David L. Johnson
                                          Chairman of the Board,
                                          President and Chief Executive Officer
                                          Trustee

Date: August 13, 2004                 By: /s/ John W. Alvey
                                          -----------------
                                          John W. Alvey
                                          Vice President
                                          Chief Financial and Accounting Officer













                                       22
<PAGE>



EXHIBIT INDEX

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

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

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

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

10.2 Amendment  No. 1 to  Agreement  for  Purchase  and Sale dated May 24,  2004
     between ACI Financing, L.L.C. and DBSI Housing, Inc.

10.3 Amendment  No. 2 to  Agreement  for  Purchase and Sale dated August 2, 2004
     between ACI Financing, L.L.C. and DBSI Housing, Inc.

10.4 Purchase and Sale  Agreement  dated June 15, 2004 between LB 100 Arbor Gate
     Circle LLC and LB 100 Waverly Drive LLC and the Registrant

10.5 Amendment No. 1 to Purchase and Sale Agreement  dated July 13, 2004 between
     LB 100  Arbor  Gate  Circle  LLC  and LB 100  Waverly  Drive  LLC  and  the
     Registrant

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

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

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

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



                                       23