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 FEBRUARY 28, 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
                February 28, 1998 and August 31, 1997 (Unaudited)
                                 (In thousands)

                                     ASSETS
                                                February 28    August 31
                                                -----------    ---------

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

Cash and cash equivalents                          1,820        1,711
Interest receivable                                    -           32
Accounts receivable                                   19            9
Deferred expenses, net                                 -           70
Other assets                                           7           19
                                                 -------      -------
                                                 $13,946      $18,941
                                                 =======      =======

                        LIABILITIES AND PARTNERS' CAPITAL

Accounts payable - affiliates                    $    28     $     32
Accounts payable and accrued expenses                 78          190
Unearned rental income                                 3            3
Tenant security deposits                              75           72
Partners' capital                                 13,762       18,644
                                                 -------     --------
                                                 $13,946      $18,941
                                                 =======      =======













                             See accompanying notes.


<PAGE>


               PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP

                              STATEMENTS OF INCOME
          For the three and six months ended February 28, 1998 and 1997
               (Unaudited) (In thousands, except per Unit amounts)

                                 Three Months Ended      Six Months Ended
                                    February 28,           February 28,
                                -------------------   --------------------
                                 1998        1997        1998       1997
                                 ----        ----        ----       ----

Revenues:
   Interest from mortgage
     loans                     $   53     $   179       $  148    $   358
   Land rent                       78          27          114         54
   Interest and other income       68          23           92         48
                               ------     -------       ------    -------
                                  199         229          354        460

Expenses:
   Management fees                 30          36           60         71
   General and administrative      94          76          179        171
   Amortization of deferred 
     expenses                      66           5           70          9
                               ------     -------       ------    -------
                                  190         117          309        251
                               ------     -------       ------    -------

Operating income                    9         112           45        209

Income from operations of
   investment properties 
   held for sale, net             345         150          700        372

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

Net income                     $1,870     $   262       $2,261    $   581
                               ======     =======       ======    =======

Net income per Limited
  Partnership Unit             $ 2.06     $ 0.29        $ 2.49    $  0.64
                               ======     ======        ======    =======

Cash distributions per 
  Limited Partnership Unit     $ 7.60     $ 0.35        $ 7.96    $  0.71
                               ======     ======        ======    =======

      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 six months ended February 28, 1998 and 1997 (Unaudited)
                                 (In thousands)

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

Balance at August 31, 1996                      $  11      $22,486
Net income                                          6          575
Cash distributions                                 (7)        (640)
                                                -----      -------
Balance at February 28, 1997                    $  10      $22,421
                                                =====      =======

Balance at August 31, 1997                      $  12      $18,632
Net income                                         23        2,238
Cash distributions                                 (6)      (7,137)
                                                -----      -------
Balance at February 28, 1998                    $  29      $13,733
                                                =====      =======

























                             See accompanying notes.


<PAGE>


               PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP

                            STATEMENTS OF CASH FLOWS
         For the six months ended February 28, 1998 and 1997 (Unaudited)
                Increase (Decrease) in Cash and Cash Equivalents
                                 (In thousands)

                                                     1998           1997
                                                     ----           ----
Cash flows from operating activities:
  Net income                                     $  2,261       $    581
  Adjustments to reconcile net income
     to net cash provided by operating
       activities:
     Gain on sale of land                          (1,516)             -
     Amortization of deferred expenses                 70             10
     Changes in assets and liabilities:
        Interest receivable                            32              -
        Accounts receivable                           (10)           (33)
        Other assets                                   12              3
        Accounts payable - affiliates                  (4)             -
        Accounts payable and accrued expenses        (112)          (152)
        Unearned rental income                          -            (26)
        Tenant security deposits                        3             27
                                                 --------       --------
            Total adjustments                      (1,525)          (171)
                                                 --------       --------
            Net cash provided by operating
              activities                              736            410
                                                ---------      ---------

Cash flows from investing activities:
  Repayment of mortgage loan                        4,230              -
  Net proceeds from sale of land                    2,286              -
                                                 --------       --------
            Net cash provided by investing 
              activities                            6,516              -
                                                 --------       --------

Cash flows from financing activities:
  Distributions to partners                        (7,143)          (647)
                                                 --------      ---------

Net increase (decrease) in cash and 
   cash equivalents                                   109           (237)

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

Cash and cash equivalents, end of period         $  1,820       $  1,823
                                                 ========       ========


                             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 February  28, 1998 and August 31, 1997 and  revenues and
expenses for the three and six months ended  February 28, 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.
Subsequent to this transaction,  the Partnership has two remaining  wholly-owned
real  estate  investments  (see  Note 3).  Both of these  properties  are  being
actively  marketed  for sale.  The goal of the  Managing  General  Partner is to
complete  the  sales  of the  two  remaining  assets  and a  liquidation  of the
Partnership  by December 31, 1998.  There are no assurances,  however,  that the
sales of the remaining  assets 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 six
months ended February 28, 1998, the Partnership  received  additional rent under
the  terms of the Park  South  Apartments  land  lease  totalling  $87,000.  The
Partnership  received no additional  rent for the six months ended  February 28,
1997.

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 February 28, 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
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 February  28, 1998 and
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
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.  The buyer has thirty days to perform its
due  diligence  and then  would  have  thirty  days  thereafter  to  close  this
transaction.

      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.  The  status of this  environmental  issue is not
expected to impact the completion of the prospective sale transaction  described
above.

      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 February  28,  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
February 28, 1998 and August 31, 1997.
<PAGE>

      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 six  months  ended  February  28,  1998 and 1997 are as  follows  (in
thousands):

                                 Three Months Ended      Six Months Ended
                                    February 28,           February 28,
                                -------------------   --------------------
                                 1998        1997        1998       1997
                                 ----        ----        ----       ----

      Revenues:
        Rental income        $   409     $   358       $   809   $   743
        Other income              89          77           162       166
                             -------     -------       -------   -------
                                 498         435           971       909
      Expenses:
        Property operating 
          expenses                98         236           162       448
        Property taxes and
          insurance               55          49           109        89
                             -------     -------       -------   -------
      
                                 153         285           271       537
                             -------     -------       -------   -------

      Income from 
        operations, net     $    345     $   150       $   700   $   372
                            ========     =======       =======   =======

      Property  operating  expenses for the six months  ended  February 28, 1997
include capital improvement costs of $154,000.

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

      The Adviser  earned basic  management  fees of $60,000 and $71,000 for the
six-month  periods  ended  February  28, 1998 and 1997,  respectively.  Accounts
payable -  affiliates  at  February  28,  1998 and August 31,  1997  consists of
management fees of $28,000 and $32,000, respectively, payable to the Adviser.

      Included in general and  administrative  expenses for the six months ended
February  28, 1998 and 1997 is $89,000 and $94,000,  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 six months
ended   February  28,  1998  and  1997  is  $1,000  and  $3,000,   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
-------------------------------

     As  discussed  further  below,  the  Partnership's  mortgage  loan and land
investments  secured by the Park South  Apartments  were  repaid on January  20,
1998.  Subsequent  to  this  transaction,  the  Partnership  has  two  remaining
wholly-owned  real  estate  investments,   the  Martin  Sunnyvale  Research  and
Development  Center and the Bell Forge Square Shopping  Center.  The Partnership
assumed  direct  ownership  of  these  two  properties   following   foreclosure
proceedings  resulting from defaults under the terms of the Partnership's  first
leasehold  mortgage loans.  Both of these properties are being actively marketed
for  sale,  and  management's  goal  would be to  complete  the sales of the two
remaining  assets and a liquidation of the  Partnership by December 31, 1998. As
discussed  further below, it is expected that the wholly-owned  Martin Sunnyvale
Research and Development  Center will be sold in mid-calendar year 1998, and the
Bell Forge  Square  Shopping  Center  will be sold  during  the  second  half of
calendar 1998. There are no assurances, however, that the sales of the remaining
assets and the liquidation of the Partnership will be completed within this time
frame. The net proceeds from any future sales  transactions  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.

      The  Partnership's  wholly-owned,  39,000  square  foot  Martin  Sunnyvale
Research and Development Center remained 100% leased as of February 28, 1998. No
leases expire at the property until April 30, 1999. As previously reported,  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  and the  continued
improvement  in the local  market  conditions,  the  market  value of the Martin
Sunnyvale  property  has  increased  substantially  over  the  past  two  years.
Accordingly, management believes that this would be the appropriate time to sell
the property. Consequently,  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 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. The
buyer has thirty  days to perform its due  diligence  and then would have thirty
days thereafter to close this transaction.

      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.  The
status of this  environmental  issue is not expected to impact the completion of
the prospective sale transaction described above.

      At the Partnership's  other  wholly-owned  investment  property,  the Bell
Forge Square Shopping Center in Nashville,  Tennessee, the leasing level was 97%
as of February 28, 1998,  up from 92% as of August 31, 1997. A 6,000 square foot
sports  grill opened for business  during the quarter  ended  November 30, 1997.
During the current 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.  This
potential  buyer  continues to assess the possibility of purchasing the property
despite no longer being under contract with the Partnership.  Subsequently,  the
Partnership has met with a new brokerage firm about  re-marketing the Bell Forge
Square  property for sale.  This firm is also based in Nashville and specializes
in the sale of retail properties.  On March 20, 1998, a brokerage  agreement was
executed with this real estate firm for the marketing of the property.

      At  February  28,  1998,  the  Partnership  had  available  cash  and cash
equivalents of $1,820,000.  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  investments and the future sales or refinancings
of 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 February 28, 1998
------------------------------------

      The  Partnership  reported net income of  $1,870,000  for the three months
ended  February  28,  1998,  as compared to net income of $262,000  for the same
period in the prior year.  This  $1,608,000  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,  as discussed  further  above.  This
increase is also partly  attributable to a $195,000  increase in net income from
operations of  investment  properties  held for sale (Martin  Sunnyvale and Bell
Forge  Square)  which was  partially  offset by a decrease in the  Partnership's
operating  income of  $103,000.  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
February  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.

      The Partnership's  operating income decreased partly due to a reduction in
interest  from  mortgage  loans 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 $51,000 for the
current  three-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.
<PAGE>

Six Months Ended February 28, 1998
----------------------------------

      The Partnership reported net income of $2,261,000 for the six months ended
February 28, 1998,  as compared to net income of $581,000 for the same period in
the prior year. This  $1,680,000  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, as discussed further above. This increase in net
income is also partly attributable to a $328,000 increase in net income from the
operations of  investment  properties  held for sale (Martin  Sunnyvale and Bell
Forge  Square)  which was  partially  offset by a decrease in the  Partnership's
operating  income of  $164,000.  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 February 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.

      The  Partnership's  operating income decreased partly due to a decrease in
interest  from  mortgage  loans 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 $60,000 for the
current  six-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.


<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  January  20, 1998 was filed to report
the  repayment  of the first  leasehold  mortgage  loan  secured  by Park  South
Apartments and related sale of the Partnership's interest in the underlying land
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:  April 13, 1998