UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                    ----------------------------------

                                    FORM 10-Q

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

                FOR THE QUARTERLY PERIOD ENDED MAY 31, 1998

                                    OR

      |_|  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

              For the transition period from ________ to ________.

                         Commission File Number: 0-15036

               PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP
               --------------------------------------------------
             (Exact name of registrant as specified in its charter)

        Delaware                                              04-2841746
--------------------------------------------------------------------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

265 Franklin Street, Boston, Massachusetts                     02110
--------------------------------------------------------------------------------
(Address of principal executive offices)                      (Zip Code)

Registrant's telephone number, including area code (617) 439-8118
                                                   --------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 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 |_|

<PAGE>

            PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP

                              BALANCE SHEETS
               May 31, 1998 and August 31, 1997 (Unaudited)
                              (In thousands)

                                  ASSETS
                                                 May 31      August 31
                                                 ------      ---------

Real estate investments:
   Investment properties held for sale, net     $  8,700      $12,100
   Land                                                -          770
   Mortgage loan                                       -        4,230
                                                --------      -------
                                                   8,700       17,100

Cash and cash equivalents                          6,799        1,711
Interest receivable                                    -           32
Accounts receivable                                   44            9
Deferred expenses, net                                 -           70
Other assets                                           1           19
                                                --------      -------
                                                $ 15,544      $18,941
                                                ========      =======

                        LIABILITIES AND PARTNERS' CAPITAL

Accounts payable - affiliates                   $     20      $    32
Accounts payable and accrued expenses                117          190
Unearned rental income                                 9            3
Tenant security deposits                              13           72
Partners' capital                                 15,385       18,644
                                                --------      -------
                                                $ 15,544      $18,941
                                                ========      =======












                             See accompanying notes.


<PAGE>


               PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP

                              STATEMENTS OF INCOME
      For the three and nine months ended May 31, 1998 and 1997 (Unaudited)
                     (In thousands, except per Unit amounts)

                               Three Months Ended      Nine Months Ended
                                     May 31,                May 31,
                               ------------------    --------------------
                                1998       1997          1998       1997
                                ----       ----          ----       ----

Revenues:
   Interest from mortgage
     loans                    $   -     $   179      $   148      $   537
   Land rent                      -          39          114           93
   Interest and other income     30          27          122           75
                              -----     -------      -------      -------
                                 30         245          384          705

Expenses:
   Management fees               21          35           81          106
   General and administrative    97          96          276          267
   Amortization of deferred
    expenses                      -           5           70           14
                              -----     -------      -------      -------
    
                                118         136          427          387
                              -----     -------      -------      -------

Operating income (loss)         (88)        109          (43)         318

Income from operations of 
   investment properties 
   held for sale, net           383         333         1,083         705

Gain on sale of operating
   investment property        1,601           -         1,601           -

Gain on sale of land              -           -         1,516           -
                              -----     -------       -------      -------

Net income                   $1,896     $   442       $ 4,157      $ 1,023
                             ======     =======       =======      =======

Net income per Limited
  Partnership Unit            $2.10       $0.49         $4.59        $1.13
                              =====       =====         =====        =====

Cash distributions per
  Limited Partnership Unit    $0.30       $0.36         $8.26        $1.07
                              =====       =====         =====        =====

      The above net income and cash  distributions per Limited  Partnership Unit
are based upon the 896,993 Units ($50 per Unit) of Limited Partnership  Interest
outstanding during each period.

                             See accompanying notes.


<PAGE>


               PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP

                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
          For the nine months ended May 31, 1998 and 1997 (Unaudited)
                                 (In thousands)

                                               General    Limited
                                               Partners   Partners
                                               --------   --------

Balance at August 31, 1996                      $  11      $22,486
Net income                                         10        1,013
Cash distributions                                (10)        (960)
                                                -----      -------
Balance at May 31, 1997                         $  11      $22,539
                                                =====      =======

Balance at August 31, 1997                      $  12      $18,632
Net income                                         42        4,115
Cash distributions                                 (9)      (7,407)
                                                -----     --------
Balance at May 31, 1998                         $  45      $15,340
                                                =====      =======

























                             See accompanying notes.


<PAGE>

               PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP

                            STATEMENTS OF CASH FLOWS
          For the nine months ended May 31, 1998 and 1997 (Unaudited)
                Increase (Decrease) in Cash and Cash Equivalents
                                 (In thousands)

                                                       1998           1997
                                                       ----           ----
Cash flows from operating activities:
  Net income                                         $  4,157        $ 1,023
  Adjustments to reconcile net income
    to net cash provided by operating activities:
     Gain on sale of operating investment property     (1,601)             -
     Gain on sale of land                              (1,516)             -
     Amortization of deferred expenses                     70             14
     Changes in assets and liabilities:
        Interest receivable                                32              -
        Accounts receivable                               (35)            (3)
        Other assets                                       18             18
        Accounts payable - affiliates                     (12)             -
        Accounts payable and accrued expenses             (73)          (123)
        Unearned rental income                              6            (23)
        Tenant security deposits                          (59)            27
                                                     --------        -------
            Total adjustments                          (3,170)           (90)
                                                     --------        -------
            Net cash provided by operating
              activities                                  987            933
                                                     --------        -------

Cash flows from investing activities:
  Proceeds from repayment of mortgage loan              4,230              -
  Net proceeds from sale of land                        2,286              -
  Net proceeds from sale of operating investment
    property                                            5,001              -
                                                     --------        -------
            Net cash provided by investing
              activities                               11,517              -
                                                     --------        -------
Cash flows from financing activities:
  Distributions to partners                            (7,416)          (970)
                                                     --------        -------

Net increase (decrease) in cash and cash
  equivalents                                           5,088            (37)

Cash and cash equivalents, beginning of period          1,711          2,060
                                                     --------        -------

Cash and cash equivalents, end of period             $  6,799        $ 2,023
                                                     ========        =======


                             See accompanying notes.


<PAGE>


            PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP
                          Notes to Financial Statements
                                   (Unaudited)


1.  General
    -------

      The accompanying financial statements,  footnotes and discussion should be
read in conjunction with the financial statements and footnotes contained in the
Partnership's  Annual  Report for the year ended August 31, 1997. In the opinion
of  management,  the  accompanying  financial  statements,  which  have not been
audited, reflect all adjustments necessary to present fairly the results for the
interim period. All of the accounting  adjustments reflected in the accompanying
interim financial statements are of a normal recurring nature.

      The  accompanying  financial  statements have been prepared on the accrual
basis of accounting in accordance with generally accepted accounting  principles
which require  management  to make  estimates  and  assumptions  that affect the
reported amounts of assets and liabilities and disclosures of contingent  assets
and liabilities as of May 31, 1998 and August 31, 1997 and revenues and expenses
for the three and nine months ended May 31, 1998 and 1997.  Actual results could
differ from the estimates and assumptions used.

      As discussed further in Note 2, the  Partnership's  mortgage loan and land
investments secured by the Park South Apartments were repaid in January 1998. In
addition,  as discussed  further in Note 3, the Partnership  sold a wholly-owned
real estate investment,  the Martin Sunnyvale Research and Development Center in
May 1998.  Subsequent to these  transactions,  the Partnership has one remaining
real estate investment,  the wholly-owned Bell Forge Square Shopping Center (see
Note 3). This  property is being  actively  marketed  for sale.  The goal of the
Managing  General  Partner is to complete the sale of the remaining  asset and a
liquidation of the  Partnership  by December 31, 1998.  There are no assurances,
however,  that  the  sale of the  remaining  asset  and the  liquidation  of the
Partnership will be completed within this time frame.

2.  Mortgage Loan and Land Investments
    ----------------------------------

      The  outstanding  first  mortgage loan and the cost of the related land to
the Partnership at August 31, 1997 were as follows (in thousands):

             Property                  Amount of Mortgage Loan     Cost of Land
             --------                  -----------------------     ------------
       
      Park South Apartments
        Charlotte, North Carolina             $4,230                  $  770

      On January 20, 1998, the Partnership received $4,230,000 from the borrower
of the mortgage loan secured by the Park South Apartments, which represented the
full  repayment of the first  leasehold  mortgage loan held by the  Partnership.
Simultaneously, the Park South owner purchased the Partnership's interest in the
underlying land at a price of $2,286,000  which included a premium of $1,516,000
over  the  Partnership's  cost  basis  in the  land of  $770,000.  This  premium
represented  a 50%  share in the  appreciation  in the  value  of the  operating
investment  property above a specified base amount as called for under the terms
of the ground lease.  The Park South mortgage loan opened to prepayment  without
penalty on December 29, 1997. The  Partnership  owned a 77% interest in the land
underlying the Park South Apartments and had an equivalent interest in the first
mortgage  loan secured by the  improvements.  The  remaining 23% interest in the
land and  mortgage  loan  receivable  was  owned by an  affiliated  partnership,
PaineWebber Mortgage Partners Five, LP.

      The Park South loan was secured by a first  mortgage on the property,  the
owner's  leasehold  interest in the land and an assignment of all tenant leases.
Interest was payable  monthly and the  principal was due at maturity on December
28, 2001.  The annual  interest rate on the Park South mortgage loan was 9%. The
land lease had a term of 40 years.  Among the provisions of the lease agreement,
the Partnership was entitled to additional rent based upon gross revenues of the
underlying  property in excess of a base  amount,  as  defined.  During the nine
months ended May 31, 1998 and 1997, the  Partnership  received  additional  rent
under the terms of the Park South  Apartments land lease  totalling  $87,000 and
$13,000, respectively.

3.  Investment Properties Held for Sale
    -----------------------------------

      Martin Sunnyvale Research and Development Center
      ------------------------------------------------

      The Partnership foreclosed under the terms of the mortgage loan secured by
the Martin  Sunnyvale  Research and  Development  Center on July 12,  1991.  The
borrower had defaulted on the payment terms of the loan due to significant lease
turnover  during 1991. The property  contains  39,000  rentable  square feet, is
located in  Sunnyvale,  California  and was 100%  leased  during  May 1998.  The
combined  carrying  value  of  the  original  land  and  loan  investments,   of
$5,100,000,  was  adjusted  to  management's  estimate  of the fair value of the
property as of the date of the foreclosure,  of $3,400,000,  and reclassified to
investment  properties held for sale.  Subsequent to the date of the foreclosure
and through  August 31,  1994,  the  Partnership  had  recorded  provisions  for
possible  investment loss totalling $900,000 to write down the carrying value of
the Martin  Sunnyvale  investment  property to $2,500,000 to reflect  additional
declines in its estimated  fair value,  net of selling  expenses.  During fiscal
1996, real estate values for R&D office properties in Northern  California began
to recover as a result of the  resurgence  in the growth of the high  technology
industries.  As a result of lower market vacancy  levels and  increasing  rental
rates,  the  estimated  fair value of the  Martin  Sunnyvale  property  improved
significantly  during  fiscal 1996 to an amount  which  exceeded  the cost basis
established  for the  property in fiscal 1991 of  $3,400,000.  Accordingly,  the
Partnership  adjusted the valuation account with respect to the Martin Sunnyvale
property  and  recognized  a recovery  of possible  investment  loss of $900,000
effective in the fourth quarter of fiscal 1996. The resulting  carrying value of
the  investment,  of  $3,400,000,  was  included  in the  balance of  investment
properties  held for sale on the  accompanying  balance  sheet as of August  31,
1997.

     During fiscal 1997, the Partnership  contracted with a national real estate
firm with a strong  background  in selling R&D  buildings in the Silicon  Valley
area to market the property for sale.  As a result of these  marketing  efforts,
the Partnership  received  several offers from qualified  third-party  buyers to
acquire the property.  After reviewing the offers,  the Partnership  accepted an
offer from one of these potential  buyers and negotiated and executed a purchase
and sale  agreement  during the first quarter of fiscal 1998.  The sale remained
subject to the  satisfactory  completion of the buyer's due diligence  which was
scheduled to be completed in December 1997. At the conclusion of the buyer's due
diligence  period,  the offer to purchase the property was  withdrawn.  In early
calendar year 1998 the  Partnership  and its marketing  agent decided to refocus
attention on a select group of potential  investors that had expressed  previous
interest in acquiring the property.  These potential buyers were contacted which
resulted in the receipt of two written offers. Subsequently, one of these offers
was selected and negotiations on a purchase and sale agreement were successfully
completed. A purchase and sale agreement was executed by the Partnership and the
prospective  buyer on March 11, 1998. On May 29, 1998, after an extension of the
due  diligence  period,  the  Partnership  successfully  closed the sale of this
property. It was sold for a gross sale price of $5,125,000. After closing costs,
expense  prorations  and  adjustments,  the sale  generated  net proceeds to the
Partnership  of $4,938,000,  of which $109 per original  $1,000  investment,  or
approximately  $4,889,000 was distributed to the Limited Partners  subsequent to
the quarter-end, on June 15, 1998.

      Bell Forge Square Shopping Center
      ---------------------------------

      On October 4, 1991, the Partnership received a deed in lieu of foreclosure
on the  mortgage  loan  secured by the Bell Forge Square  Shopping  Center.  The
property,  which was 97%  occupied as of May 31,  1998,  is comprised of 130,470
leasable  square  feet and is  located in  Nashville,  Tennessee.  The  Managing
General Partner estimated that the fair value of the investment property, net of
selling  expenses,  at the date title to the mortgaged  property was transferred
was approximately  equal to the combined cost of the land and the face amount of
the Partnership's mortgage loan. Accordingly, the combined value of the land and
the face  amount of the  mortgage  loan,  of  $9,000,000,  was  reclassified  to
investment  properties  held for sale.  During fiscal 1992, the  Partnership had
recorded a provision for possible  investment loss of $600,000 to write down the
carrying value of the Bell Forge Square investment property to reflect a decline
in its estimated  fair value,  net of selling  expenses,  as of August 31, 1992.
During  fiscal  1993,  the  Partnership  recorded  an  adjustment  to reduce the
valuation  allowance  by $300,000 to reflect an increase in the  estimated  fair
value of the Bell Forge Square property as of August 31, 1993. The resulting net
carrying value of $8,700,000 is included in the balance of investment properties
held for sale on the accompanying  balance sheets at May 31, 1998 and August 31,
1997.

      During the  quarter  ended May 31,  1998,  the  Partnership  negotiated  a
purchase and sale agreement  with a prospective  buyer for the Bell Forge Square
property.  Subsequent to the  quarter-end,  the buyer  completed its initial due
diligence work and made a  non-refundable  deposit on June 11, 1998. While there
are no assurances that this transaction will be completed,  the sale is expected
to close by the end of July 1998.  A sale of this final  asset would be followed
by an orderly liquidation of the Partnership.

      The Partnership  recognizes income from the investment properties held for
sale equal to its share of the excess of the  properties'  gross  revenues  over
property operating expenses  (including capital  improvement  costs),  taxes and
insurance.  Combined  summarized  operating  results  of  the  Martin  Sunnyvale
Research and Development Center (through the date of sale) and Bell Forge Square
Shopping Center for the three and nine months ended May 31, 1998 and 1997 are as
follows (in thousands):
<PAGE>

                                Three Months Ended      Nine Months Ended
                                       May 31,                May 31,
                               -------------------    -------------------- 
                                 1998        1997        1998        1997
                                 ----        ----        ----        ----

      Revenues:
        Rental income          $  413     $   393      $ 1,222     $ 1,136
        Other income               76          54          238         220
                               ------     -------      -------     -------
                                  489         447        1,460       1,356
      Expenses:
        Property operating
          expenses                 54          65          216         513
        Property taxes and 
          insurance                52          49          161         138
                               ------     -------      -------     -------
                                  106         114          377         651
                               ------     -------      -------     -------

      Income from operations,
         net                   $  383     $   333      $ 1,083     $   705
                               ======     =======      =======     =======

4.  Related Party Transactions
    --------------------------

      The Adviser earned basic  management  fees of $81,000 and $106,000 for the
nine-month periods ended May 31, 1998 and 1997, respectively. Accounts payable -
affiliates  at May 31, 1998 and August 31, 1997  consist of  management  fees of
$20,000 and $32,000, respectively, payable to the Adviser.

      Included in general and administrative  expenses for the nine months ended
May 31,  1998 and 1997 is  $134,000  and  $141,000,  respectively,  representing
reimbursements  to an affiliate of the Managing  General  Partner for  providing
certain  financial,  accounting  and  investor  communication  services  to  the
Partnership.

      Also  included  in general  and  administrative  expenses  for both of the
nine-month  periods  ended May 31,  1998 and 1997 is $4,000,  representing  fees
earned by an affiliate,  Mitchell Hutchins  Institutional  Investors,  Inc., for
managing the Partnership's cash assets.


<PAGE>



            PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP

                   MANAGEMENT'S DISCUSSION AND ANALYSIS
             OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources
-------------------------------

      As discussed  further  below,  the  Partnership's  mortgage  loan and land
investments  secured by the Park South  Apartments  were  repaid on January  20,
1998. In addition,  on May 29, 1998 the Partnership sold one of its wholly-owned
real estate  investments,  the Martin Sunnyvale Research and Development Center.
Subsequent to these transactions,  the Partnership has one remaining real estate
investment,  the wholly-owned Bell Forge Square Shopping Center. The Partnership
assumed direct ownership of this property in October 1991 following  foreclosure
proceedings  resulting from a default under the terms of the Partnership's first
leasehold  mortgage  loan.  This  property is  currently in the process of being
actively  marketed for sale, and management's goal would be to complete the sale
of the remaining  asset and a  liquidation  of the  Partnership  by December 31,
1998. There are no assurances, however, that the sale of the remaining asset and
the liquidation of the Partnership will be completed within this time frame. The
net proceeds from the final sale  transaction will be distributed to the Limited
Partners along with the remaining Partnership cash reserves after the payment of
all liquidation-related expenses.

      The first mortgage loan secured by the Park South Apartments was scheduled
to mature on December 28, 2001; however, it opened to prepayment without penalty
on December 29, 1997. On January 20, 1998, the Partnership  received  $4,230,000
from the borrower of the mortgage loan secured by Park South,  which represented
the full repayment of the first leasehold mortgage loan held by the Partnership.
Simultaneously, the Park South owner purchased the Partnership's interest in the
underlying land at a price of $2,286,000  which included a premium of $1,516,000
over  the  Partnership's  cost  basis  in the  land of  $770,000.  This  premium
represented  a 50%  share in the  appreciation  in the  value  of the  operating
investment  property above a specified base amount as called for under the terms
of the ground lease. The Partnership owned a 77% interest in the land underlying
the Park South  Apartments and had an equivalent  interest in the first mortgage
loan secured by the  improvements.  The  remaining  23% interest in the land and
mortgage loan  receivable  was owned by an affiliated  partnership,  PaineWebber
Mortgage  Partners Five, LP. The net proceeds of the Park South transaction were
distributed  to the  Limited  Partners  on  February  27,  1998 in the form of a
special distribution totalling  approximately  $6,548,000,  or $146 per original
$1,000 investment.

      On  May  29,  1998,  the  Partnership  sold  its  wholly-owned  investment
property,  the Martin  Sunnyvale  Research and  Development  Center,  located in
Sunnyvale, California, to an unrelated third party for $5,125,000. After closing
costs, expense prorations and adjustments, the Partnership realized net proceeds
of  approximately  $4,938,000.  As a result of the sale of the Martin  Sunnyvale
Research and Development  Center, a Special  Distribution was made subsequent to
the quarter-end,  on June 15, 1998, to unitholders of record as of May 29, 1998.
The Special  Distribution  included the net proceeds from the sale of the Martin
Sunnyvale  Research  and  Development  Center in the amount of $109 per original
$1,000 investment.

     As previously  reported,  during fiscal 1997 the Partnership had contracted
with a  national  real  estate  firm with a strong  background  in  selling  R&D
buildings in the Silicon Valley area to market the Martin Sunnyvale property for
sale. As a result of these marketing efforts,  the Partnership  received several
offers  from  qualified  third-party  buyers  to  acquire  the  property.  After
reviewing  the  offers,  the  Partnership  accepted  an offer  from one of these
potential  buyers and  negotiated  and  executed a purchase  and sale  agreement
during  the first  quarter  of fiscal  1998.  The sale  remained  subject to the
satisfactory  completion of the buyer's due diligence  which was scheduled to be
completed  in December  1997.  At the  conclusion  of the buyer's due  diligence
period, the offer to purchase the property was withdrawn. In early calendar year
1998 the Partnership  and its marketing agent decided to refocus  attention on a
select group of potential  investors  that had  expressed  previous  interest in
acquiring the property.  These potential buyers were contacted which resulted in
the  receipt  of two  written  offers.  Subsequently,  one of these  offers  was
selected and  negotiations  on a purchase and sale agreement  were  successfully
completed. A purchase and sale agreement was executed by the Partnership and the
eventual  buyer on March 11, 1998.  The  Partnership  granted the eventual buyer
several   extensions  of  the  due  diligence   period  in  return  for  certain
non-refundable deposits prior to the final closing of the transaction on May 29,
1998.

      The Bell Forge Square Shopping  Center,  located in Nashville,  Tennessee,
was 97% leased as of May 31, 1998, up from 92% as of August 31, 1997. During the
third quarter of fiscal 1998, lease renewal negotiations resulted in the signing
of a 2-year  lease  extension  with a 2,010 square foot beauty  supply  retailer
whose lease was  scheduled to expire in January  1999.  Subsequent to the end of
the third quarter,  a 3-year lease extension was signed with a 1,440 square foot
tanning  spa  whose  lease was set to expire in  February  1999.  As  previously
reported,  a 6,000  square foot sports  grill  opened for business at Bell Forge
Square during the quarter ended  November 30, 1997.  During the second  quarter,
lease renewal  negotiations  resulted in the signing of a 3-year lease extension
with a 3,300 square foot furniture store whose lease was due to expire in August
1998,  as well as a 3-year  lease  extension  with a 3,165  square  foot hot tub
dealership,  whose lease was due to expire in  September  1998.  Also during the
second quarter, a 3,300 square foot jewelry store, whose lease expires on August
31, 1999, filed for bankruptcy and vacated its space at the Center.  In addition
to pursuing the  Partnership's  claims for unpaid rent, the  property's  leasing
team is  pursuing a  replacement  tenant  for this space as well as a  currently
vacant space of 4,002 square feet which was occupied by a furniture  store which
closed its operations  last year.  This former tenant  remains  obligated to pay
rent on this space  through  October 31, 2000,  the end of its lease term.  This
tenant had been meeting its rental obligations  through September 1997, however,
it has not made any rental  payments since then. The property's  management team
is pursuing legal action on this matter.

      As discussed  further in the Annual  Report,  the  Partnership  decided to
explore  potential  opportunities  to sell the Bell Forge Square property during
fiscal 1997 and hired a  Nashville-based  real estate firm  specializing  in the
sale of retail  properties  to market the property for sale. As a result of this
firm's marketing efforts,  the Partnership  received offers from two prospective
third-party  buyers.  After reviewing the offers,  the  Partnership  accepted an
offer from one of these  potential  buyers and  negotiated  a purchase  and sale
agreement  which was signed on  January  5, 1998.  On  February  10,  1998,  the
Partnership  received  notice that the  potential  buyer would not be proceeding
with its efforts to close the sale  transaction  upon the  expiration of its due
diligence period due to its inability to secure a financing commitment. On March
20,  1998,  the  Partnership  executed a new  brokerage  agreement  with another
Nashville-based firm to re-market the property. During the quarter ended May 31,
1998,  the  Partnership  negotiated  a purchase  and sale  agreement  with a new
prospective  buyer  for  the  Bell  Forge  Square  property.  Subsequent  to the
quarter-end,  the prospective buyer completed its initial due diligence work and
made a  non-refundable  deposit on June 11, 1998.  While there are no assurances
that this  transaction  will be completed,  the sale is expected to close by the
end of July 1998.  A sale of this final  asset  would be  followed by an orderly
liquidation of the Partnership.

      At May 31, 1998, the Partnership  had available cash and cash  equivalents
of $6,799,000. Such cash and cash equivalents includes the net proceeds from the
sale of the Martin Sunnyvale property, in the amount of $4.9 million,  which was
distributed  to the Limited  Partners in June 1998, as discussed  further above.
The  remainder  of such cash and cash  equivalents  will be used for the working
capital  needs  of the  Partnership,  distributions  to  the  partners  and,  if
necessary,  for  tenant  improvement  expenses  and other  leasing  costs of the
Partnership's  remaining wholly-owned  investment property. The source of future
liquidity  and  distributions  to the  partners is  expected to be through  cash
generated  from the operations  and future sale of the  Partnership's  remaining
real estate investment and interest income on the  Partnership's  cash reserves.
Such sources of liquidity are expected to be adequate to meet the  Partnership's
needs on both a short-term and long-term basis.

Results of Operations
Three Months Ended May 31, 1998
-------------------------------

      The  Partnership  reported net income of  $1,896,000  for the three months
ended May 31, 1998, as compared to net income of $442,000 for the same period in
the prior year. This  $1,454,000  increase in net income is primarily due to the
gain of $1,601,000  recognized on the sale of the wholly-owned  Martin Sunnyvale
Research and  Development  Center on May 29, 1998, as discussed  further  above.
This increase is also partly  attributable  to a $50,000  increase in net income
from the operations of investment properties held for sale (Martin Sunnyvale and
Bell Forge Square). Net income from the operations of investment properties held
for sale increased primarily due to a decrease in property operating expenses at
Martin Sunnyvale.  Property operating expenses decreased at Martin Sunnyvale due
to capital  expenditures and leasing commissions incurred in May 1997 related to
new tenants.  In accordance with the Partnership's  accounting policy for assets
held for sale,  all  capital  improvements  and  leasing  costs are  expensed as
incurred. In addition, net income increased at Bell Forge Square for the current
three-month period due to an increase in rental income.  Rental income increased
due to an increase in the property's leasing level.

      An  unfavorable  change  in  the  Partnership's  operating  income  (loss)
partially  offset the gain on the sale of Martin  Sunnyvale  and the increase in
the net income from the Martin Sunnyvale and Bell Forge Square  properties.  The
Partnership reported an operating loss of $88,000 for the three months ended May
31, 1998 as compared to operating  income of $109,000 for the same period in the
prior year. This $197,000  unfavorable change was due to a reduction in interest
from mortgage loans and land rents of $179,000 and $39,000,  respectively,  as a
result of the repayment of the Park South first leasehold  mortgage loan and the
termination  of the related  ground  lease on January  20,  1998,  as  discussed
further above.  The decreases in interest from mortgage loans and land rents was
partially  offset by a decline in management fee expense of $14,000.  Management
fees decreased due to a reduction in adjusted capital contributions,  upon which
such fees are based,  due to the sale and  prepayment of the Park South land and
mortgage loan  investments,  as described  above.  Management  fees will decline
further  in  future  quarters  as a result  of the  distribution  of the  Martin
Sunnyvale net sale proceeds in June 1998.
<PAGE>

Nine Months Ended May 31, 1998
------------------------------

     The Partnership reported net income of $4,157,000 for the nine months ended
May 31, 1998, as compared to net income of $1,023,000 for the same period in the
prior year. This $3,134,000  increase in net income is primarily due to the gain
of  $1,516,000  recognized  on the sale of the land  underlying  the Park  South
Apartments on January 20, 1998 and the gain of $1,601,000 recognized on the sale
of the Martin  Sunnyvale  property on May 29, 1998, as discussed  further above.
This increase in net income is also partly  attributable to a $378,000  increase
in net income from the operations of investment properties held for sale (Martin
Sunnyvale  and Bell  Forge  Square)  which was mostly  offset by an  unfavorable
change in the Partnership's operating income (loss) of $361,000. Net income from
the operations of investment properties held for sale increased primarily due to
a decrease in property operating expenses. Property operating expenses decreased
due to the capital expenditures and leasing commissions incurred in 1997 related
to new  tenants  at Martin  Sunnyvale  and  tenant  improvements  related to the
Michael's  store  expansion  at Bell Forge Square in 1997.  As noted  above,  in
accordance with the Partnership's  accounting policy, such costs are expensed as
incurred.  In addition,  rental income  increased due to an increase in revenues
from Bell Forge Square due to an increase in the property's leasing level.

     The  Partnership  reported an operating loss of $43,000 for the nine months
ended May 31,  1998 as  compared to  operating  income of $318,000  for the same
period in the prior  year.  This  unfavorable  change was due to a  decrease  in
interest  from  mortgage  loans of $389,000 as a result of the  repayment of the
Park South first leasehold mortgage loan on January 20, 1998. In addition, total
expenses  increased due to the write-off of the deferred expenses related to the
Park South  Apartments as a result of the  repayment of the first  mortgage loan
and the sale of the underlying land. Land rent actually increased by $21,000 for
the current  nine-month  period despite the termination of the Park South ground
lease  due to the  receipt  of  additional  rent  owed  through  the date of the
termination.  An increase in interest and other income of $47,000 and a decrease
in  management  fee expense of $25,000  also  partially  offset the  decrease in
interest from mortgage loans and the increase in amortization expense.  Interest
and other income  increased as a result of interest  earned on the proceeds from
the Park South  transactions  which were  temporarily  invested in  money-market
instruments  pending the  distribution to the Limited Partners in February 1998.
Management fees decreased due to a reduction in adjusted capital  contributions,
upon which such fees are based, due to the sale and prepayment of the Park South
land and mortgage loan investments, as described above.


<PAGE>


                                     PART II
                                Other Information

Item 1. Legal Proceedings     NONE

Items 2 through 5:            NONE

Item 6. Exhibits and Reports on Form 8-K

(a)   Exhibits:   NONE

(b) Reports on Form 8-K:

      A Current  Report on Form 8-K dated May 29,  1998 was filed to report  the
sale of the  Partnership's  wholly-owned  real  estate  investment,  the  Martin
Sunnyvale Research and Development  Center, and is hereby incorporated herein by
reference.





<PAGE>



            PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP




                                SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                      PAINE WEBBER QUALIFIED PLAN PROPERTY
                                  FUND FOUR, LP


                        By:   FOURTH QUALIFIED PROPERTIES, INC.
                              ---------------------------------
                              Managing General Partner



                        By: /s/ Walter V. Arnold
                            --------------------
                            Walter V. Arnold 
                            Senior Vice President and Chief
                            Financial Officer




Dated:  July 2, 1998