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 June 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)

                                  June 30, 2004
<TABLE>
<CAPTION>


Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $ 400
   Receivables and deposits                                                      209
   Restricted escrows                                                             86
   Other assets                                                                  581
   Investment properties:
      Land                                                    $ 1,953
      Buildings and related personal property                   48,309
                                                                50,262
      Less accumulated depreciation                            (23,884)       26,378
                                                                            $ 27,654

Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                           $ 6
   Tenant security deposit liabilities                                           163
   Accrued property taxes                                                        359
   Other liabilities                                                             253
   Due to affiliates (Note B)                                                  8,402
   Mortgage notes payable                                                     22,685

Partners' Deficit
   General partners                                            $ (202)
   Limited partners (1,224.25 units issued and
      outstanding)                                              (4,012)       (4,214)
                                                                            $ 27,654


         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         Six Months Ended
                                                     June 30,                  June 30,
                                                 2004        2003         2004          2003
Revenues:                                                 (Restated)                 (Restated)

<S>                                          <C>          <C>         <C>           <C>
  Rental income                              $  1,485     $  1,342    $   2,927     $   2,603
  Other income                                    160           70          326           285
  Casualty gain (Note D)                           --            8            9             8
       Total revenues                           1,645        1,420        3,262         2,896

Expenses:
  Operating                                       711          564        1,504         1,161
  General and administrative                      115           75          177           156
  Depreciation                                    692          466        1,216           904
  Interest                                        344          302          700           578
  Property taxes                                  129          151          252           283
       Total expenses                           1,991        1,558        3,849         3,082

Loss from continuing operations                  (346)        (138)        (587)         (186)
Loss from discontinued operations                 (47)          --          (47)         (202)
Gain on sale of discontinued
  operations (Note C)                              --           73           --         5,543

Net (loss) income                            $   (393)    $    (65)    $   (634)    $   5,155

Net (loss) income allocated to general
  partners                                   $     (8)    $      3     $    (13)    $     419
Net (loss) income allocated to limited
  partners                                       (385)         (68)        (621)        4,736

                                             $   (393)    $    (65)    $   (634)    $   5,155
Per limited partnership unit:
  Loss from continuing operations            $(276.91)    $(110.27)    $(469.68)    $ (148.66)
  Loss from discontinued operations            (37.57)          --       (37.57)      (161.73)
  Gain on sale of discontinued operations          --        54.73           --      4,178.88

Net (loss) income                            $(314.48)    $ (55.54)    $(507.25)    $3,868.49


         See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>




                  Davidson Diversified Real Estate II, L.P.

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


<TABLE>
<CAPTION>

                                       Limited
                                     Partnership     General      Limited
                                        Units        Partners    Partners     Total

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

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

Net loss for the six months
   ended June 30, 2004                      --           (13)        (621)      (634)

Partners' deficit at
   June 30, 2004                      1,224.25        $ (202)     $(4,012)   $(4,214)

         See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>


                  Davidson Diversified Real Estate II, L.P.

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

                                                                   Six Months Ended
                                                                        June 30,
                                                                     2004     2003
                                                                            (Restated)
Cash flows from operating activities:
<S>                                                               <C>         <C>
  Net (loss) income                                               $ (634)     $ 5,155
  Adjustments to reconcile net (loss) income to net cash
   provided by operating activities:
     Depreciation                                                   1,216         948
     Casualty gain                                                     (9)         (8)
     Gain on sale of discontinued operations                           --      (5,543)
     Loss on early extinguishment of debt                              --          68
     Amortization of debt discounts and loan costs                     56         141
     Change in accounts:
      Receivables and deposits                                        351         (86)
      Other assets                                                   (138)        (88)
      Accounts payable                                               (153)       (126)
      Tenant security deposit liabilities                              (4)        (21)
      Accrued property taxes                                         (158)         76
      Other liabilities                                               (84)       (126)
      Due to affiliate                                                 46         119
         Net cash provided by operating activities                    489         509

Cash flows from investing activities:
  Property improvements and replacements                             (239)     (3,318)
  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                       (231)       (758)

Cash flows from financing activities:
  Advances from affiliates                                            405       3,176
  Payments on advances from affiliates                               (682)     (2,778)
  Payments on mortgage notes payable                                 (327)       (221)
  Loan costs paid                                                      --          (8)
         Net cash (used in) provided by financing activities         (604)        169

Net decrease in cash and cash equivalents                            (346)        (80)
Cash and cash equivalents at beginning of period                      746         591
Cash and cash equivalents at end of period                         $ 400       $ 511

Supplemental disclosure of cash flow information:
  Cash paid for interest                                           $ 535       $ 580
Supplemental disclosure of non-cash activity:
  Property improvements and replacements in accounts payable       $ --        $ 856
  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 June 30, 2003.

         See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>




                  Davidson Diversified Real Estate II, L.P.

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Note A - Basis of Presentation

The  accompanying   unaudited  consolidated  financial  statements  of  Davidson
Diversified Real Estate II, L.P. (the  "Partnership" or "Registrant")  have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-QSB and Item 310(b)
of Regulation S-B.  Accordingly,  they do not include all of the information and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.  In the opinion of Davidson Diversified  Properties,  Inc.
(the  "Managing  General  Partner"),   all  adjustments  (consisting  of  normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included. Operating results for the three and six months ended June 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 is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  The Partnership Agreement provides for (i) payments to
affiliates for services and (ii)  reimbursement of certain expenses  incurred by
affiliates on behalf of the Partnership.

Affiliates of the Managing  General  Partner are entitled to receive 5% of gross
receipts  from  all of  the  Partnership's  properties  for  providing  property
management  services.  The  Partnership  paid to such  affiliates  approximately
$162,000  and  $144,000  for the six  months  ended  June  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  $91,000 and
$117,000 for the six months ended June 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 $3,000
for the six months ended June 30,  2003.  There were no such fees during the six
months ended June 30, 2004.  The fees are  calculated  based on a percentage  of
current additions to investment properties.

In accordance  with the  Partnership  Agreement,  the Managing  General  Partner
advanced the Partnership  approximately  $405,000 and $3,176,000  during the six
months ended June 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 $2,778,000 during
the same periods.

At June 30, 2004, the amount of the  outstanding  advances and accrued  interest
was approximately $8,402,000.  Interest is charged at prime plus 1%, or 5.00% at
June 30, 2004. Interest expense was approximately  $213,000 and $186,000 for the
six months  ended June 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.

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 June 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 six months ended June 30, 2004 and 2003,
the  Partnership was charged by AIMCO and its affiliates  approximately  $32,000
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  $5,543,000  for the six months ended
June 30, 2003. The additional gain of approximately  $73,000 recorded during the
three  months  ended June 30,  2003 was due to the write off of an  accrual  for
additional  sale  related  expenses  that  was  not  needed.  In  addition,  the
Partnership  recorded a loss on early  extinguishment  of debt of  approximately
$68,000  as a result of the write off of  unamortized  loan  costs.  The loss on
early  extinguishment  of  debt  is  included  in  the  loss  from  discontinued
operations  in  the  accompanying  consolidated  statement  of  operations.  The
Partnership  used the proceeds  received  from the sale to make  payments on the
loan balances due to the Managing General Partner.  In accordance with Statement
of Financial  Accounting  Standards No. 144, the operations of the property have
been shown as loss from  discontinued  operations  for the six months ended June
30, 2003, which includes revenues of approximately $169,000.

Note D - Casualty Gain

During the six months ended June 30, 2004, a net casualty gain of  approximately
$9,000 was recorded at Big Walnut  Apartments.  The  casualty  gain related to a
fire that occurred at Big Walnut Apartments that damaged two apartments in March
2003. The gain was the result of additional  insurance  proceeds received during
the six months ended June 30, 2004.

Note E - Contingencies

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

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

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

On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector")  filed an  appeal  seeking  to  vacate  and/or  reverse  the  order
approving the settlement and entering  judgment  thereto.  On November 24, 2003,
the Objector filed an  application  requesting the Court order AIMCO to withdraw
settlement  tender offers it had  commenced,  refrain from making further offers
pending the appeal and auction any units tendered to third  parties,  contending
that the offers did not conform  with the terms of the  Settlement.  Counsel for
the Objector (on behalf of another  investor)  had  alternatively  requested the
Court take certain  action  purportedly  to enforce the terms of the  settlement
agreement.  On December 18, 2003,  the Court heard oral  argument on the motions
and denied them both in their entirety.

On January 28, 2004,  Objector filed his opening brief in his pending appeal. On
April 23, 2004, the Managing General Partner and its affiliates filed a response
brief in support of the settlement  and the judgment  thereto.  Plaintiffs  have
also filed a brief in support of the settlement. On June 4, 2004, Objector filed
a reply to the briefs  submitted by the Managing General Partner and Plaintiffs.
No hearing has been scheduled in the matter.

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  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
taken as a whole. Similarly,  the Managing General Partner does not believe that
the ultimate  outcome will have a material  adverse effect on the  Partnership's
financial condition or results of operations taken as a whole.

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

Note F - Restatement of June 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 six months  ended June 30,  2003,  of  approximately  $79,000 and  $195,000,
respectively,  as a net increase to expense. In addition,  depreciation  expense
for  Reflections  Apartments was  understated for the three and six months ended
June 30, 2003 by approximately $86,000 and $148,000, respectively.  Accordingly,
the  accompanying  consolidated  statements of operations  for the three and six
months  ended  June 30,  2003 have been  restated  to  reflect  a  reduction  of
operating  expenses of approximately $0 and $5,000,  an increase in depreciation
of  approximately  $86,000 and $148,000  and an increase in interest  expense of
approximately $79,000 and $200,000, respectively.

Note G - Indiana Property Taxes

During 2003,  the state of Indiana  implemented a  reassessment  of property tax
values. The Partnership is currently appealing the reassessed property tax value
of Reflections  Apartments.  In the state of Indiana property tax bills are paid
one year in arrears.  Thus, the 2003 property tax bills are received and paid in
2004. Due to the  Partnership's  appeal of the reassessed  property  value,  the
property  tax  accrual for 2004 and 2003 is based on the  property  tax value as
estimated by a third party property tax specialist. The property tax expense for
the six months  ended June 30, 2004 based on this  estimate  and recorded in the
financial   statements  is  approximately   $121,000.   If  the  Partnership  is
unsuccessful  in  its  appeal,   it  could  potentially  be  liable  for  up  to
approximately  $131,000 of additional property taxes for the first six months of
2004 and all of 2003. The  Partnership  believes that the recorded  liability is
the best estimate of the amounts to be paid for Indiana property taxes.


<PAGE>




ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS 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
six months ended June 30, 2004 and 2003:

                                                     Average Occupancy
                                                      2004       2003
      Big Walnut Apartments
         Columbus, Ohio (1)                           82%         93%
      The Trails Apartments
         Nashville, Tennessee                         94%         95%
      Reflections Apartments
         Indianapolis, Indiana (2)                    84%         60%

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

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

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

Results of Operations

The  Partnership's net loss for the three and six months ended June 30, 2004 was
approximately  $393,000  and  $634,000  compared  to net  loss of  approximately
$65,000 and net income of approximately  $5,155,000 for the three and six months
ended June 30, 2003, respectively. The increase in net loss for the three months
period and the  decrease in net income for the six month  period were  primarily
due to a gain on the sale of LaFontenay I and II Apartments recognized in 2003.

On January 30, 2003, the  Partnership  sold  LaFontenay I and II Apartments to 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  $5,543,000  for the six months ended
June 30, 2003. The additional gain of approximately  $73,000 recorded during the
three  months  ended June 30,  2003 was due to the write off of an  accrual  for
additional  sale  related  expenses  that  was  not  needed.  In  addition,  the
Partnership  recorded a loss on early  extinguishment  of debt of  approximately
$68,000  as a result of the write off of  unamortized  loan  costs.  The loss on
early  extinguishment  of  debt  is  included  in  the  loss  from  discontinued
operations  in  the  accompanying  consolidated  statement  of  operations.  The
Partnership  used the proceeds  received  from the sale to make  payments on the
loan balances due to the Managing General Partner.  In accordance with Statement
of Financial  Accounting  Standards No. 144, the operations of the property have
been shown as loss from  discontinued  operations  for the six months ended June
30,  2003  which  includes  revenues  of  approximately  $169,000.  Included  in
discontinued  operations  for the three and six months  ended  June 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
six months ended June 30, 2004 was approximately  $346,000 and $587,000 compared
to loss from continuing  operations of  approximately  $138,000 and $186,000 for
the three and six months ended June 30, 2003, respectively. The increase in loss
from  continuing  operations  for both  periods  was due to an increase in total
expenses partially offset by an increase in total revenues.

The  increase in total  expenses  for the three and six month  periods is due to
increases in operating, general and administrative,  depreciation,  and interest
expenses  partially  offset by a decrease in property  tax  expenses.  Operating
expenses  increased due to increases in advertising,  property,  and maintenance
expenses,  partially offset by a decrease in administrative expense. 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.  Maintenance  expenses  increased  due to a decrease in
construction  period operation costs at Reflections  Apartments and increases in
contract labor and parts and supplies at Big Walnut and Reflections  Apartments.
Administrative  expenses  decreased due to an early exit fee accrual recorded at
Reflections  Apartments  during  2003.  Depreciation  expense  for both  periods
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, which is located in Indiana.

General and administrative expenses increased for the three and six months ended
June 30,  2004 due to the  payment of  estimated  income  taxes to the states of
Tennessee and Kentucky. 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.

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  and a  decrease  in bad  debt  expense  at all of the  Partnership's
investment  properties  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.

During the six months ended June 30, 2004, a net casualty gain of  approximately
$9,000 was recorded at Big Walnut Apartments. The casualty gain was related to a
fire that occurred at Big Walnut Apartments that damaged two apartments in March
2003. The gain was the result of additional  insurance  proceeds received during
the six months ended June 30, 2004.

Liquidity and Capital Resources

At June 30, 2004, the Partnership had cash and cash equivalents of approximately
$400,000  compared to  approximately  $511,000 at June 30,  2003.  Cash and cash
equivalents  decreased  approximately  $346,000  since  December 31, 2003 due to
approximately  $604,000 of cash used in financing  activities and  approximately
$231,000 of cash used in investing  activities partially offset by approximately
$489,000  of cash  provided  by  operating  activities.  Cash used in  financing
activities  consisted of principal  payments on the  mortgages  encumbering  the
Partnership's  properties  and  payments on advances  from an  affiliate  of the
Managing General Partner partially offset by advances received from an affiliate
of the Managing General Partner.  Cash used in investing activities consisted of
property  improvements  and  replacements  and  deposits  to  restricted  escrow
accounts  partially offset by insurance proceeds from the casualty at Big Walnut
Apartments.  The Partnership  invests its working  capital  reserves in interest
bearing accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the various  properties  to  adequately  maintain  the
physical  assets and other operating needs of the Partnership and to comply with
Federal,  state,  and local  legal and  regulatory  requirements.  The  Managing
General  Partner  monitors  developments  in the  area of legal  and  regulatory
compliance.  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, including increased legal and audit
fees. Capital improvements planned for each of the Partnership's  properties are
detailed below.

Big Walnut Apartments

During  the  six  months  ended  June  30,  2004,  the   Partnership   completed
approximately  $142,000  of  capital  improvements  at  Big  Walnut  Apartments,
consisting  primarily of parking lot improvements,  fencing  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  $40,000 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  six  months  ended  June  30,  2004,  the   Partnership   completed
approximately   $35,000  of  capital  improvements  at  The  Trails  Apartments,
consisting  primarily of 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 $103,000 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  six  months  ended  June  30,  2004,  the   Partnership   completed
approximately   $62,000  of  capital  improvements  at  Reflections   Apartments
consisting  primarily of office  computers,  furniture and  fixtures,  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  $258,000 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  $13,371,000
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  $9,314,000
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 six months  ended June 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  June  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  620.25
limited  partnership units ("Units") in the Partnership  representing  50.66% of
the  outstanding  Units at June 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. In this
regard,  on June 14, 2004 a tender offer was made by AIMCO  Properties,  L.P. to
purchase  any and all of the  Units  not  owned by  affiliates  of  AIMCO  for a
purchase  price of $4,106.18  per Unit.  The tender offer  expired on August 13,
2004. Pursuant to the Partnership  Agreement,  unitholders holding a majority of
the Units are  entitled to take action with respect to a variety of matters that
include, but are not limited to, voting on certain amendments to the Partnership
Agreement and voting to remove the Managing General Partner.  As a result of its
ownership of 50.66% of the outstanding  Units, AIMCO is in a position to control
all such voting decisions with respect to the Partnership. Although the Managing
General  Partner  owes  fiduciary   duties  to  the  limited   partners  of  the
Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as
its sole stockholder.  As a result,  the duties of the Managing General Partner,
as managing  general  partner,  to the Partnership and its limited  partners may
come into conflict with the duties of the Managing  General Partner to AIMCO, as
its sole stockholder.

Critical Accounting Policies and Estimates

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

Impairment of Long-Lived Assets

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

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

Revenue Recognition

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

ITEM 3.     CONTROLS AND PROCEDURES

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

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


<PAGE>


                           PART II - OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

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

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

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

On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector")  filed an  appeal  seeking  to  vacate  and/or  reverse  the  order
approving the settlement and entering  judgment  thereto.  On November 24, 2003,
the Objector filed an  application  requesting the Court order AIMCO to withdraw
settlement  tender offers it had  commenced,  refrain from making further offers
pending the appeal and auction any units tendered to third  parties,  contending
that the offers did not conform  with the terms of the  Settlement.  Counsel for
the Objector (on behalf of another  investor)  had  alternatively  requested the
Court take certain  action  purportedly  to enforce the terms of the  settlement
agreement.  On December 18, 2003,  the Court heard oral  argument on the motions
and denied them both in their entirety.

On January 28, 2004,  Objector filed his opening brief in his pending appeal. On
April 23, 2004, the Managing General Partner and its affiliates filed a response
brief in support of the settlement  and the judgment  thereto.  Plaintiffs  have
also filed a brief in support of the settlement. On June 4, 2004, Objector filed
a reply to the briefs  submitted by the Managing General Partner and Plaintiffs.
No hearing has been scheduled in the matter.

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  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
taken as a whole. Similarly,  the Managing General Partner does not believe that
the ultimate  outcome will have a material  adverse effect on the  Partnership's
financial condition or results of operations taken as a whole.


<PAGE>


ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a) Exhibits:

                  See attached Exhibit Index.

            b) Reports on Form 8-K:

                  None filed during the quarter ended June 30, 2004.


<PAGE>


                                   SIGNATURES



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



                                    DAVIDSON DIVERSIFIED REAL ESTATE II, L.P.


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


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


                                    By:   /s/Stephen B. Waters
                                           Stephen B. Waters
                                           Vice President



                                    Date: August 16, 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.

     10A          Agent's   Agreement   dated   October  16,  1984  between  the
                  Registrant and Harvey Freeman & Sons,  Inc. is incorporated by
                  reference to Exhibit 10B to the Registrant's  Annual Report on
                  Form 10-K for the fiscal year ended December 31, 1984.

     10B          Agreement  among Agents dated  October 16, 1984 by and among
                  Harvey Freeman & Sons, Inc.,  Harvey Freeman & Sons, Inc. of
                  Arkansas,  Harvey  Freeman & Sons,  Inc. of Florida,  Harvey
                  Freeman & Sons,  Inc.  of  Georgia,  Harvey  Freeman & Sons,
                  Inc. of Indiana,  Harvey  Freeman & Sons,  Inc. of Kentucky,
                  Harvey Freeman & Sons, Inc. of  Mississippi,  Harvey Freeman
                  & Sons, Inc. of North Carolina,  Harvey Freeman & Sons, Inc.
                  of Ohio, and Harvey Freeman & Sons,  Inc. of South Carolina,
                  is   incorporated   by  reference  to  Exhibit  10C  to  the
                  Registrant's  Annual Report on Form 10-K for the fiscal year
                  ended December 31, 1984.

     10C          Acquisition and Disposition  Services  Agreement dated October
                  16, 1984 between the Registrant and Criswell  Freeman  Company
                  is   incorporated   by   reference   to  Exhibit  10D  to  the
                  Registrant's  Annual  Report on Form 10-K for the fiscal  year
                  ended December 31, 1984.

     10D          Purchase  Agreement  Phases I and II  dated  October  3,  1984
                  between  NTS-LaFontenay  Partners and Tennessee Trust Company,
                  Trustee,  is  incorporated  by  reference  to  Exhibit  10E to
                  Amendment No. 1 to the Registrant's  Registration Statement on
                  Form S-11  (Registration  No. 2-92313) as filed on October 15,
                  1984.



<PAGE>


     10E          Modification of Purchase  Agreements dated October 31, 1984 by
                  and  among   NTS-LaFontenay   Partners,   the  Registrant  and
                  LaFontenay  Associates is incorporated by reference to Exhibit
                  10F to  Post-Effective  Amendment  No.  1 to the  Registrant's
                  Registration Statement on Form S-11 (Registration No. 2-92313)
                  as filed on January 15, 1985.

     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.

     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.

     10AA         Memorandum of Understanding among SEC Realty Corp.,  Tennessee
                  Properties,  L.P.,  Freeman Mortgage  Corporation,  J. Richard
                  Freeman,  W. Criswell Freeman and  Jacques-Miller  Properties,
                  Inc. is  incorporated  by  reference  to Exhibit  10DDD to the
                  Registrant's  Annual  Report on Form 10-K for the fiscal  year
                  ended December 31, 1988.

     10BB         Partnership  Administration and Consultation Agreement among
                  Freeman Properties,  Inc., Freeman  Diversified  Properties,
                  Inc.,   Residual   Equities   Limited   and   Jacques-Miller
                  Properties,  Inc. is  incorporated  by  reference to Exhibit
                  10EEE to the  Registrant's  Annual  Report  on Form 10-K for
                  the fiscal year ended December 31, 1988.

     10CC         Partnership  Agreement of LaFontenay,  L.P. dated May 15, 1990
                  owned  99.9% by the  Registrant  relating  to  refinancing  of
                  LaFontenay  Apartments is incorporated by reference to Exhibit
                  10FFF to the  Registrant's  Annual Report on Form 10-K for the
                  fiscal year ended December 31, 1990.

     10DD         Multifamily  Note with Addendum dated May 24, 1990 executed by
                  LaFontenay, payable to the Patrician Mortgage Company relating
                  to LaFontenay,  L.P. payable to the Patrician Mortgage Company
                  relating to LaFontenay Apartments is incorporated by reference
                  to the Registrant's  Annual Report on Form 10-K for the fiscal
                  year ended December 31, 1990.

     10EE         Multifamily Mortgage with Rider dated May 24, 1990 executed by
                  LaFontenay,  L.P. in favor of the Patrician  Mortgage  Company
                  relating to LaFontenay Apartments is incorporated by reference
                  to the Registrant's  Annual Report on Form 10-K for the fiscal
                  year ended December 31, 1990.

     10FF         Termination   Agreement,   dated   December   31,  1991  among
                  Jacques-Miller,   Inc.,  Jacques-Miller  Property  Management,
                  Davidson  Diversified  Properties,  Inc.,  and Supar,  Inc. is
                  incorporated by reference to Exhibit 10JJJ to the Registrant's
                  Annual Report on Form 10-K for the fiscal year ended  December
                  31, 1991.

     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.

     10MM         Multifamily  Note secured by a Mortgage or Deed of Trust dated
                  August 6,  1997,  between  LaFontenay,  L.L.C.  and  Patrician
                  Financial  Company Limited  Partnership  related to LaFontenay
                  Apartments,  is incorporated by reference to the exhibit filed
                  with the Form 10-QSB dated September 30, 1997.

     10NN         Multifamily  Note secured by a Mortgage or Deed of Trust dated
                  January 16, 2001 between AIMCO Greenspring, L.P. and Financial
                  Services,  Inc., a Delaware  Corporation,  is  incorporated by
                  reference  to the  exhibit  filed with the Form  10-KSB  dated
                  December 31, 2001.

     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.

     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:  August 16, 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: August 16, 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 June
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:  August 16, 2004


                                           /s/Stephen B. Waters
                                    Name:  Stephen B. Waters
                                    Date:  August 16, 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.