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, 1997

                                       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, 1997 and August 31, 1996 (Unaudited)
                                 (In thousands)


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

Real estate investments:
   Investment properties held for sale, net           $12,100        $12,100
   Land                                                 1,115          1,115
   Mortgage loans, receivable                           7,285          7,285
                                                      -------        -------
                                                       20,500         20,500

Cash and cash equivalents                               2,023          2,060
Interest receivable                                        60             60
Accounts receivable                                        17             14
Deferred expenses, net                                     85             99
Other assets                                               50             68
                                                      -------        -------
                                                      $22,735        $22,801
                                                      =======        =======

                        LIABILITIES AND PARTNERS' CAPITAL

Accounts payable - affiliates                         $    32       $     32
Accounts payable and accrued expenses                      78            201
Unearned rental income                                      3             26
Tenant security deposits                                   72             45
Partners' capital                                      22,550         22,497
                                                      -------        -------
                                                      $22,735        $22,801
                                                      =======        =======


              STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
          For the nine months ended May 31, 1997 and 1996 (Unaudited)
                                 (In thousands)

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

Balance at August 31, 1995                               $  (18)   $29,265
Net income                                                   29      2,854
Cash distributions                                          (13)   (10,898)
                                                         ------    -------
Balance at May 31, 1996                                  $   (2)   $21,221
                                                         ======    =======

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
                                                         ======    =======


                             See accompanying notes.


<PAGE>


               PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP

                              STATEMENTS OF INCOME
      For the three and nine months ended May 31, 1997 and 1996 (Unaudited)
                     (In thousands, except per Unit amounts)

                                   Three Months Ended       Nine Months Ended
                                         May 31,                 May 31,
                                   ------------------       ------------------
                                      1997      1996          1997        1996
                                      ----      ----          ----        ----

Revenues:
   Interest from mortgage loans    $  179   $   179         $ 537     $   696
   Land rent                           39        31            93         175
   Other interest income               27        26            75         182
                                   ------   -------         -----     -------
                                      245       236           705       1,053

Expenses:
   Management fees                     35        35           106         123
   General and administrative          96        44           267         288
   Amortization of deferred 
     expenses                           5         4            14          34
                                   ------   -------         -----     -------
                                      136        83           387         445
                                   ------   -------         -----     -------

Operating income                      109       153           318         608

Income from operations of investment
   properties held for sale, net      333       377           705         897

Gain on sale of land                    -         -             -       1,378
                                   ------   -------         -----     -------

Net income                         $  442   $   530        $1,023     $ 2,883
                                   ======   =======        ======     =======

Net income per Limited
  Partnership Unit                  $0.49     $0.58         $1.13      $ 3.18
                                    =====     =====         =====      ======

Cash distributions per Limited
  Partnership Unit                  $0.36     $0.32         $1.07      $12.15
                                    =====     =====         =====      ======

   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 CASH FLOWS
           For the nine months ended May 31, 1997 and 1996 (Unaudited)
                Increase (Decrease) in Cash and Cash Equivalents
                                 (In thousands)

                                                            1997        1996
                                                            ----        ----
Cash flows from operating activities:
  Net income                                              $ 1,023     $ 2,883
  Adjustments to reconcile net income
    to net cash provided by operating activities:
   Gain on sale of land                                         -      (1,378)
   Amortization of deferred expenses                           14          34
   Changes in assets and liabilities:
     Interest receivable                                        -          59
     Accounts receivable                                       (3)         12
     Other assets                                              18          27
     Accounts payable - affiliates                              -         (12)
     Accounts payable and accrued expenses                   (123)        (67)
     Unearned rental income                                   (23)          -
     Other liabilities                                          -         (50)
     Tenant security deposits                                  27           -
                                                          -------     -------
        Total adjustments                                     (90)     (1,375)
                                                          -------     -------
        Net cash provided by operating activities             933       1,508
                                                          -------     -------

Cash flows from investing activities:
   Net proceeds from sale of land                               -       3,440
   Proceeds received from repayment of mortgage loan            -       6,188
                                                          -------     -------
        Net cash provided by investing activities               -       9,628
                                                          -------     -------

Cash flows from financing activities:
   Distributions to partners                                 (970)    (10,911)
                                                          -------     -------

Net (decrease) increase in cash and cash equivalents          (37)        225

Cash and cash equivalents, beginning of period              2,060       1,851
                                                          -------     -------

Cash and cash equivalents, end of period                  $ 2,023     $ 2,076
                                                          =======     =======





                             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, 1996. 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, 1997 and August 31, 1996 and  revenues
   and  expenses  for the three  and nine  months  ended May 31,  1997 and 1996.
   Actual results could differ from the estimates and assumptions used.

2. Mortgage Loan and Land Investments

   The following are the first  mortgage loans  outstanding  and the cost of the
   related  land to the  Partnership  at May 31,  1997 and August  31,  1996 (in
   thousands):

                               Amount of Mortgage Loan         Cost of Land
                               -----------------------         ------------
      Property                  5/31/97     8/31/96         5/31/97    8/31/96
      --------                  -------     -------         -------    -------

   Willow Creek Apartments
     Wichita, Kansas            $ 3,055     $ 3,055        $   345     $   345

   Park South Apartments
     Charlotte, North Carolina    4,230       4,230            770         770
                                -------     -------        -------     -------
                                $ 7,285     $ 7,285        $ 1,115     $ 1,115
                                =======     =======        =======     =======

   The loans are  secured by first  mortgages  on the  properties,  the  owner's
   leasehold  interest  in the  land and an  assignment  of all  tenant  leases.
   Interest is payable monthly and the principal is due at maturity.  The annual
   interest  rates on the Willow Creek and Park South mortgage loans are 11% and
   9%,  respectively.  The  land  leases  have  terms  of 40  years.  Among  the
   provisions of the lease agreements, the Partnership is entitled to additional
   rent based upon gross  revenues of the  underlying  properties in excess of a
   base amount, as defined.  During the nine months ended May 31, 1997 and 1996,
   the  Partnership  received  additional rent under the terms of the Park South
   Apartments  land lease  totalling  $13,000  and  $40,000,  respectively.  The
   lessees have the option to purchase the land for  specified  periods of time,
   beginning in February of 1995 for the Willow Creek lease and December of 1997
   for the Park South lease,  at a price based on fair market value, as defined,
   but not less than the original  cost to the  Partnership.  The  Partnership's
   investments  are structured to share in the  appreciation in the value of the
   underlying real estate. Accordingly, upon either sale, refinancing,  maturity
   of the mortgage  loan or exercise of the option to repurchase  the land,  the
   Partnership  will  receive  a 40% to 50%  share of the  appreciation  above a
   specified base amount.

   During  the  quarter  ended  May 31,  1997,  the  owner of the  Willow  Creek
   Apartments  informed  the  Partnership  of its  intent  to  prepay  its first
   leasehold  mortgage loan which is scheduled to mature on October 31, 2000 and
   purchase  the  underlying  land  from the  Partnership.  The  transaction  is
   expected to close in the fourth quarter of fiscal 1997. Under the agreed upon
   terms of the transaction,  the Partnership  will receive  $3,055,000 from the
   Willow  Creek  borrower,  which  represents  the full  repayment of the first
   leasehold mortgage loan. Simultaneously, the Willow Creek owner will purchase
   the  Partnership's  interest in the  underlying  land at a price equal to the
   Partnership's  cost basis of $345,000.  In  addition,  the  Partnership  will
   receive  a  mortgage  loan  prepayment  penalty  of 4% of the  mortgage  note
   balance,  or  $122,200,  and a  land  lease  termination  fee of  $13,800  in
   accordance  with the terms of the  agreements.  Although the structure of the
   Partnership's original investment in Willow Creek entitles the Partnership to
   participate  in the  appreciated  value  of the  property,  the  value of the
   property has not increased to a level at which the Partnership  could receive
   a participation payment. If this transaction closes as expected, the proceeds
   described above will be distributed to the Limited Partners.

   The mortgage  loan  secured by The Corner at Seven  Corners  Shopping  Center
   became  prepayable  in February  1995.  On December  16,  1994,  the borrower
   notified  the  Partnership  of its intent to prepay the loan and exercise the
   option to purchase the land during 1995.  On November 22, 1995,  the borrower
   of The Corner at Seven Corners loan prepaid the Partnership's first leasehold
   mortgage loan and purchased the Partnership's interest in the underlying land
   for total consideration of $9,628,000.  The principal balance of the mortgage
   loan was  $6,188,000  plus  interest  accrued  through  November  22, 1995 of
   $43,000. The Partnership's cost basis in the land was $2,062,000. Pursuant to
   the ground lease, the Partnership  received  $1,378,000 in excess of its land
   investment  as its  share  of the  appreciation  in  value  of the  operating
   investment  property above a specified base amount.  Such amount was recorded
   as a gain in the  Partnership's  financial  statements  for the quarter ended
   November 30, 1995.  The net proceeds from this  prepayment  transaction  were
   distributed to the Limited Partners as part of a special distribution paid on
   January  31,  1996 in the  amount of  approximately  $9,598,000,  or $214 per
   original $1,000 investment.

   As discussed  further above, the Willow Creek mortgage loan is expected to be
   prepaid  in  the  fourth  quarter  of  fiscal  1997.  As a  result  of  these
   circumstances,  based on an expected short-term maturity,  the estimated fair
   value of the Willow Creek mortgage loan approximated its carrying value as of
   May 31,  1997 and  August  31,  1996  since the  estimated  fair value of the
   collateral  property  exceeded the  principal  balance of the loan.  The fair
   value of the Park South loan, which does not become prepayable until December
   1997,  has been  estimated  using  discounted  cash  flow  analysis  and also
   approximated  the  loan's  carrying  value as of May 31,  1997 and August 31,
   1996.

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 as of May 31,
   1997. 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  recovered somewhat 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 carrying value of the investment, of $3,400,000, is included
   in the balance of  investment  properties  held for sale on the  accompanying
   balance sheets as of May 31, 1997 and August 31, 1996.

   During fiscal 1994, the Partnership was notified by a California  state water
   agency of a potential  environmental problem at Martin Sunnyvale. As a result
   of governmental  required testing,  management  learned that there has been a
   contamination   of  the   underground   soil  and  water  at  the  site.  The
   environmental  testing  was paid for by one of the  parties  identified  as a
   potential contaminator.  Management believes that this contamination occurred
   prior to the Partnership's initial mortgage loan and ground lease investments
   in the property,  which were made in 1985. The California  state water agency
   has issued a site cleanup order  identifying two companies which had occupied
   the  Martin  Sunnyvale  property  prior  to  the  Partnership's   investment.
   Management  has engaged  local counsel to monitor all legal actions to insure
   that the  Partnership's  rights  are  fully  protected.  This  matter  is not
   expected to have any  long-term  impact on the market value of the  operating
   investment property.

   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 90% occupied as of May 31, 1997, 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, 1997 and August 31, 1996.

   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 and Bell Forge Square Shopping Center for the
   three  and nine  months  ended  May 31,  1997 and  1996  are as  follows  (in
   thousands):

                                    Three Months Ended       Nine Months Ended
                                          May 31,                 May 31,
                                    ------------------       -----------------
                                      1997      1996          1997        1996
                                      ----      ----          ----        ----

   Revenues:
     Rental income                 $  393     $   366       $1,136     $1,087
     Other income                      54          63          220        213
                                   ------     -------       ------     ------
                                      447         429        1,356      1,300
   Expenses:
     Property operating expenses       65          47          513        231
     Property taxes and insurance      49           5          138        172
                                   ------     -------       ------     ------
                                      114          52          651        403
                                   ------     -------       ------     ------

   Income from operations, net     $  333    $    377      $   705     $  897
                                   ======    ========      =======     ======

4. Related Party Transactions

   The Adviser  earned  basic  management  fees of $106,000 and $123,000 for the
   nine-month  periods  ended  May 31,  1997 and  1996,  respectively.  Accounts
   payable -  affiliates  at both May 31, 1997 and August 31,  1996  consists of
   management fees of $32,000 payable to the Adviser.

   Included in general and administrative expenses for the nine months ended May
   31,  1997 and  1996 is  $141,000  and  $139,000,  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 the nine months
   ended May 31, 1997 and 1996 is $4,000 and $5,000, respectively,  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
-------------------------------

      During the  quarter  ended May 31,  1997,  the owner of the  Willow  Creek
Apartments  informed the Partnership of its intent to prepay its first leasehold
mortgage  loan which is scheduled to mature on October 31, 2000 and purchase the
underlying  land from the  Partnership.  The transaction is expected to close in
the  fourth  quarter  of  fiscal  1997.  Under  the  agreed  upon  terms  of the
transaction,  the  Partnership  will  receive  $3,055,000  from the Willow Creek
borrower,  which  represents the full repayment of the first leasehold  mortgage
loan.  Simultaneously,  the Willow Creek owner will  purchase the  Partnership's
interest in the underlying land at a price equal to the Partnership's cost basis
of  $345,000.  In  addition,  the  Partnership  will  receive  a  mortgage  loan
prepayment penalty of 4% of the mortgage note balance,  or $122,200,  and a land
lease termination fee of $13,800 in accordance with the terms of the agreements.
Although the structure of the Partnership's  original investment in Willow Creek
entitles  the  Partnership  to  participate  in  the  appreciated  value  of the
property,  the value of the property  has not  increased to a level at which the
Partnership could receive a participation payment. If this transaction closes as
expected,  the  proceeds  described  above will be  distributed  to the  Limited
Partners.

      The  Partnership's  wholly-owned,  39,000  square  foot  Martin  Sunnyvale
Research and Development  Center remained 100% leased as of May 31, 1997. During
the first quarter of fiscal 1997, the largest tenant at Martin Sunnyvale vacated
17,784  square feet when its lease  expired at the  beginning of November  1996.
However,  a replacement  tenant executed a five-year lease through November 2001
for the entire 17,784  square foot space at an average  rental rate which is 40%
higher than the previous tenant had been paying. This transaction  completed the
successful re-leasing of the three tenant spaces at the property.  The other two
spaces were re-leased during fiscal 1996 at rental rates 40% and 60% higher than
the previous leases.  As a result of the significant  increase in rental income,
the market value of the Martin  Sunnyvale  property has increased  substantially
over  the  past  year.  Accordingly,   management  believed  that  it  would  be
appropriate  to pursue a possible sale of the property  and,  during the current
quarter, 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.  Subsequent to the end of the quarter, the Partnership received two offers
to acquire the property.  After a review of the two offers,  the Partnership has
determined that a better price may be attainable and has instructed the national
real  estate  firm to  continue  its sales  efforts.  There  are no  assurances,
however, that a sale transaction will be completed in the near term.

      As previously reported, the Partnership was notified by a California state
water agency in fiscal 1994 of a potential  environmental  problem at the Martin
Sunnyvale  property.  As a result of governmental  required testing,  management
learned that there has been a contamination of the underground soil and water at
the site.  The state  water  agency has issued a final  report  identifying  two
tenants  which had occupied  the property  prior to 1985 and may have caused the
environmental  problem.  Both prior  tenants are Fortune 500  companies and both
have been ordered at their own expense to perform the necessary testing, cleanup
and  documentation  as  required  by the  California  state  water  agency.  The
Partnership  will be required  to monitor  the  efforts of these two firms.  The
environmental  testing  was  paid  for by one of  the  parties  identified  as a
potential  contaminator.  Management  has engaged  local  counsel to monitor all
legal actions to insure that the Partnership's rights are fully protected.  This
matter is not expected to have any  long-term  impact on the market value of the
Partnership's operating property.

      At the Partnership's other wholly-owned  investment  property,  Bell Forge
Square Shopping Center in Nashville,  Tennessee,  occupancy  remained at 90% for
the third  consecutive  quarter.  During the first  quarter of fiscal 1997,  two
tenants,  a  furniture  store and a pet  store,  occupying  10% of the  center's
rentable  area,  vacated their spaces prior to the  termination of their leases.
During  the  current  quarter,   the  Partnership   negotiated  and  received  a
termination fee from the furniture store in exchange for a space reduction under
its lease. The space taken back by the Partnership, totalling 2,400 square feet,
was then leased to a dental operation for a seven-year term. The furniture store
continues  to pay its  rent  obligation  under  the  terms  of the  lease on the
remaining 4,000 square feet,  which expires in October 2000. The dental center's
average  annual rent per square foot is  approximately  50% higher than the rate
under the lease with the furniture  store.  The  termination fee was used to pay
for tenant improvements for the dental center. The former pet store tenant which
ceased  operations  and stopped  paying rent during the first  quarter of fiscal
1997 has been issued a court order to pay its rental  obligation.  Although  the
Partnership is pursuing its rights under this court judgment to recover the rent
due under the lease agreement, management is not optimistic about the likelihood
of collection given the poor financial condition of the former pet store tenant.
During the current quarter, the property's leasing team executed a new five-year
lease with a restaurant tenant for the vacant space formerly occupied by the pet
store at a rental rate 19% higher than the  previous  tenant's.  The  restaurant
will fund all of its own tenant  improvements and working capital  requirements.
Also during the  current  quarter,  a 3,160  square  foot  sporting  goods store
renewed its lease for an additional  five years at a rate which is 17% more than
its original lease rate.  Two additional  leases at Bell Forge Square are due to
expire through the end of calendar 1997.  The property  management  team expects
both of these tenants to renew their leases.  As previously  reported,  although
Discovery  Zone,  which occupies 9% of the center's net rentable area, has filed
for protection under Chapter 11 of the U.S. Bankruptcy Code, it continues to pay
its post-petition  rent and operate its store at Bell Forge Square.  While there
are  likely  to be some  store  closings  as part  of the  company's  bankruptcy
reorganization  plan, it is uncertain at this time whether the Bell Forge Square
location would be affected by such actions.  During the second quarter of fiscal
1997,  management  decided to explore  potential  opportunities to sell the Bell
Forge  Square  property and  contracted  with a regional  real estate  broker to
market the property for sale.  Subsequent to the end of the third  quarter,  the
Partnership  received an offer from a  prospective  buyer to purchase Bell Forge
Square.  The offer is  currently  being  reviewed,  and a decision on whether to
pursue  this offer or to  continue  the  marketing  efforts  will be made in the
fourth  quarter.  Regardless  of the  outcome  of this  decision,  there  are no
assurances that a sale of Bell Forge Square will be completed in the near term.

     Occupancy  at the Park  South  Apartments  in  Charlotte,  North  Carolina,
averaged  91% for  the  quarter  ended  May 31,  1997,  compared  to 90% for the
previous quarter.  Operations of the property continue to fully support the debt
service and ground lease payments owed to the Partnership despite a weakening in
market conditions for existing properties in the greater Charlotte area over the
past year. A significant  number of new  apartment  units have been added to the
overall Charlotte market during this time period,  including several hundred new
units  which  are in  Park  South's  sub-market,  and a  substantial  amount  of
additional  units are either  currently  under  construction  or in the planning
stages.  In order to  remain  competitive  with  these  new  units,  Park  South
currently  offers  reduced  rental  rates  and/or  discounted  move-in  rates to
prospective  tenants.  As an  incentive  to renew  leases,  current  tenants are
offered minimal  increases at the expiration of their leases.  The use of rental
concessions  and renewal  incentives  is expected to continue for the near term.
Notwithstanding  the current  market  conditions,  management  believes that the
long-term  prospects  for the Park South  property  remain  positive  due to the
property's  strong position within the marketplace and the region's  outlook for
job and population growth over the next several years.

      At May 31, 1997, the Partnership  had available cash and cash  equivalents
of  $2,023,000.  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 wholly-owned investment properties. The source of future liquidity
and  distributions to the partners is expected to be through cash generated from
the Partnership's  real estate and mortgage loan  investments,  the repayment of
the  mortgage  loans  receivable  and the future  sales or  refinancings  of the
underlying  land and the  investment  properties.  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, 1997
-------------------------------

      The Partnership reported net income of $442,000 for the three months ended
May 31,  1997,  as compared to net income of $530,000 for the same period in the
prior year.  This $88,000  decrease in net income is  attributable  to a $44,000
reduction in income from the operations of investment  properties  held for sale
(Martin  Sunnyvale  and  Bell  Forge  Square)  and  a  $44,000  decline  in  the
Partnership's  operating income. Income from operations of investment properties
held for sale  declined  primarily  due to an  increase  in  property  taxes and
insurance  expense and an increase in  property  operating  expenses  which were
partially offset by an increase in rental revenues. Rental revenues increased by
$27,000  mainly due to the  increase  in rental  rates at the  Martin  Sunnyvale
Research and Development Center, as discussed further above.  Property operating
expenses  increased  by  $18,000  primarily  due  to  the  capital   improvement
expenditures  and  leasing  commissions  related to the new lease  signed in the
first  quarter of fiscal 1997 at the Martin  Sunnyvale  property,  as  discussed
further above. Under the Partnership's  accounting policy with respect to assets
held for sale, capital and tenant improvement costs and leasing  commissions are
expensed as incurred.  Real estate taxes and insurance  increased by $44,000 due
to an adjustment  recorded during the third quarter of fiscal 1996 at Bell Forge
Shopping Center to correct an over-accrual of real estate tax expense related to
the first two quarters of fiscal 1996.

      The Partnership's  operating income decreased due to a $53,000 increase in
expenses  which was  partially  offset by a $9,000  increase  in  revenues.  The
Partnership's  operating expenses  increased for the current  three-month period
mainly due to the timing of the performance of the annual independent  appraisal
work on the Partnership's  investments while revenues increased primarily due to
the  timing  of the  receipt  of  additional  land  rent  from  the  Park  South
Apartments.
<PAGE>

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

      The  Partnership  reported  net income of  $1,023,000  for the nine months
ended May 31, 1997, as compared to net income of $2,883,000  for the same period
in the prior year. The decrease in net income is primarily  attributable  to the
gain  recognized  in the prior period on the sale of The Corner at Seven Corners
land, of $1,378,000. In addition, the Partnership's net income declined due to a
decrease in operating income of $290,000.  Operating  income declined  primarily
due to a decrease in revenues of $348,000. Revenues decreased due to declines in
interest earned on mortgage loans of $159,000,  land rent revenue of $82,000 and
other interest  income of $107,000.  Interest  earned on mortgage loans and land
rent  revenue  decreased  as a result of The  Corner at Seven  Corners  mortgage
repayment  and related  land sale which  occurred  during the prior year.  Other
income decreased due to the inclusion of The Corner at Seven Corners' prepayment
proceeds in the invested cash  balances in the prior period  pending the special
distribution  to the Limited  Partners  which was made on January 31, 1996.  The
decrease in revenues was partially  offset by a reduction in management  fees of
$17,000  and  a  decline  in  amortization  of  deferred  expenses  of  $20,000.
Management fees decreased due to a reduction in adjusted capital  contributions,
upon which such fees are based,  as a result of the capital  distribution  which
followed the  prepayment  transaction  involving of The Corner at Seven  Corners
investments. Amortization of deferred expenses decreased due to the write-off of
the remaining deferred  acquisition expenses associated with The Corner at Seven
Corners investments at the time of the November 1995 sale.

      Also contributing to the decline in net income for the current  nine-month
period is a  $192,000  decrease  in income  from the  operations  of  investment
properties held for sale.  Income from operations of investment  properties held
for sale  declined  due to a $282,000  increase in property  operating  expenses
which was  partially  offset  by a $49,000  increase  in rental  revenues  and a
$34,000  decrease in property taxes and insurance  expense.  Property  operating
expenses increased primarily due to additional capital improvement  expenditures
and  leasing  commissions  associated  with the three new  tenants at the Martin
Sunnyvale  Research and Development  Center,  as well as the tenant  improvement
costs  related to new  leases at Bell Forge  Square  Shopping  Center.  As noted
above, under the Partnership's accounting policy with respect to assets held for
sale, capital and tenant improvement costs and leasing  commissions are expensed
as incurred.  The increase in rental  revenues is primarily  attributable to the
increase  in the rental  rates on the three new leases at Martin  Sunnyvale,  as
discussed further above.



<PAGE>


                                     PART II
                                Other Information

Item 1. Legal Proceedings

     As previously  reported,  the Partnership's  General Partners were named as
defendants  in  a  class  action  lawsuit   against   PaineWebber   Incorporated
("PaineWebber") and a number of its affiliates relating to PaineWebber's sale of
70 direct  investment  offerings  of interests  in various  limited  partnership
investments  and REIT stocks,  including  those offered by the  Partnership.  In
January  1996,  PaineWebber  signed  a  memorandum  of  understanding  with  the
plaintiffs in the class action  outlining the terms under which the parties have
agreed to  settle  the  case.  Pursuant  to that  memorandum  of  understanding,
PaineWebber  irrevocably  deposited  $125  million into an escrow fund under the
supervision of the United States District Court for the Southern District of New
York to be used to  resolve  the  litigation  in  accordance  with a  definitive
settlement agreement and plan of allocation.  On July 17, 1996,  PaineWebber and
the class plaintiffs submitted a definitive  settlement agreement which provides
for the complete  resolution of the class action litigation,  including releases
in favor of the Partnership and the General Partners,  and the allocation of the
$125 million  settlement  fund among  investors in the various  partnerships  at
issue in the case. As part of the settlement, PaineWebber also agreed to provide
class  members  with  certain  financial  guarantees  relating  to  some  of the
partnerships.  The details of the  settlement  are  described in a notice mailed
directly to class members at the direction of the court.  A final hearing on the
fairness  of the  settlement  was held in December  1996,  and in March 1997 the
court issued a final approval of the settlement. The release of the $125 million
of  settlement  proceeds has not occurred to date pending the  resolution  of an
appeal of the settlement  agreement by two of the plaintiff  class  members.  As
part  of  the  settlement   agreement,   PaineWebber  has  agreed  not  to  seek
indemnification  from the related partnerships and real estate investment trusts
at issue in the litigation  (including the  Partnership) for any amounts that it
is required to pay under the settlement.

      In February 1996,  approximately  150 plaintiffs  filed an action entitled
Abbate v.  PaineWebber  Inc. in  Sacramento,  California  Superior Court against
PaineWebber   Incorporated  and  various  affiliated   entities  concerning  the
plaintiffs' purchases of various limited partnership interests,  including those
offered by the  Partnership.  The complaint  alleged,  among other things,  that
PaineWebber and its related entities committed fraud and  misrepresentation  and
breached  fiduciary  duties  allegedly  owed to the  plaintiffs  by  selling  or
promoting  limited   partnership   investments  that  were  unsuitable  for  the
plaintiffs and by overstating the benefits,  understating  the risks and failing
to state  material  facts  concerning  the  investments.  The  complaint  sought
compensatory  damages of $15 million plus punitive damages against  PaineWebber.
In September 1996, the court dismissed many of the plaintiffs'  claims as barred
by applicable securities arbitration regulations.  Mediation with respect to the
Abbate  action  was held in  December  1996.  As a result of such  mediation,  a
settlement between PaineWebber and the plaintiffs was reached which provided for
the complete  resolution  of such action.  Final  releases and  dismissals  with
regard to this action were received during the quarter ended May 31, 1997.

      Based on the  settlement  agreements  discussed  above covering all of the
outstanding unitholder  litigation,  and notwithstanding the appeal of the class
action  settlement  referred  to  above,  management  does not  expect  that the
resolution  of these  matters will have a material  impact on the  Partnership's
financial statements, taken as a whole.

Items 2 through 5:   NONE

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits:       NONE

(b)  Reports on Form 8-K:

     No reports on Form 8-K have been filed by the registrant during the quarter
for which this report is filed.




<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 14, 1997