--------------------------------------------------------------------------------

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               ------------------



                                   FORM 10-QSB


                               ------------------



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


                For the quarterly period ended September 30, 2004


                               ------------------



                         Commission file number 0-11973


                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP
             Organized pursuant to the Laws of the State of Maryland


                               ------------------



        Internal Revenue Service - Employer Identification No. 52-1321492

                 11200 Rockville Pike, Rockville, Maryland 20852

                                 (301) 468-9200


                               ------------------


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




--------------------------------------------------------------------------------
<PAGE>



                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                              INDEX TO FORM 10-QSB

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2004



                                                                         Page

Part I - FINANCIAL INFORMATION

Item 1.  Financial Statements

         Balance Sheets
           - September 30, 2004 and December 31, 2003...................   1

         Statements of Operations and Accumulated Losses
           - for the three and nine months ended September 30, 2004
             and 2003...................................................   2

         Statements of Cash Flows
           - for the nine months ended September 30, 2004 and 2003......   3

         Notes to Financial Statements
          - September 30, 2004 and 2003.................................   4

Item 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations....................................  10

Item 3.  Controls and Procedures........................................  14


Part II - OTHER INFORMATION

Item 3.  Defaults Upon Senior Securities................................  14

Item 5.  Other Information..............................................  14

Item 6.  xhibits........................................................  16

Signature...............................................................  17

<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements


                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                                 BALANCE SHEETS


                                     ASSETS

<TABLE>
<CAPTION>
                                                                                      September 30,   December 31,
                                                                                          2004            2003
                                                                                      ------------    ------------
                                                                                        (Unaudited)
<S>                                                                                   <C>             <C>
Investments in partnerships .......................................................   $    954,086    $    854,495
Investment in partnerships held for sale or transfer ..............................        551,106         508,229
Cash and cash equivalents .........................................................      3,623,721       2,979,778
Acquisition fees, principally paid to related parties,
  net of accumulated amortization of $53,358 and $121,219, respectively ...........         23,091          57,667
Property purchase costs,
  net of accumulated amortization of $56,520 and $161,573, respectively ...........         26,229          82,098
Other assets ......................................................................            133              40
                                                                                      ------------    ------------

   Total assets ...................................................................   $  5,178,366    $  4,482,307
                                                                                      ============    ============




                        LIABILITIES AND PARTNERS' CAPITAL



Due on investments in partnerships ................................................   $  1,400,000    $  1,400,000
Accrued interest payable ..........................................................      2,720,762       2,626,262
Accounts payable and accrued expenses .............................................        144,315         145,687
                                                                                      ------------    ------------

   Total liabilities ..............................................................      4,265,077       4,171,949
                                                                                      ------------    ------------

Commitments and contingencies

Partners' capital:

  Capital paid in:
    General Partners ..............................................................          2,000           2,000
    Limited Partners ..............................................................     50,015,000      50,015,000
                                                                                      ------------    ------------

                                                                                        50,017,000      50,017,000

  Less:
    Accumulated distributions to partners .........................................    (15,293,973)    (15,293,973)
    Offering costs ................................................................     (5,278,980)     (5,278,980)
    Accumulated losses ............................................................    (28,530,758)    (29,133,689)
                                                                                      ------------    ------------

      Total partners' capital .....................................................        913,289         310,358
                                                                                      ------------    ------------

      Total liabilities and partners' capital .....................................   $  5,178,366    $  4,482,307
                                                                                      ============    ============
</TABLE>

                   The accompanying notes are an integral part
                         of these financial statements.

                                       -1-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements


                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                            STATEMENTS OF OPERATIONS

                             AND ACCUMULATED LOSSES

                                   (Unaudited)

<TABLE>
<CAPTION>

                                                     For the three months ended       For the nine months ended
                                                           September 30,                     September 30,
                                                    ----------------------------    ----------------------------
                                                        2004            2003            2004            2003
                                                    ------------    ------------    ------------    ------------
<S>                                                 <C>             <C>             <C>             <C>
Share of income from partnerships ...............   $    159,852    $    221,192    $  1,228,378    $  1,226,805
                                                    ------------    ------------    ------------    ------------

Other revenue and expenses:

  Revenue:
    Interest ....................................          9,080           6,336          17,816          22,493
    Gain from extinguishment of debt ............             --              --              --         670,099
                                                    ------------    ------------    ------------    ------------

                                                           9,080           6,336          17,816         692,592
                                                    ------------    ------------    ------------    ------------

  Expenses:
    Interest ....................................         31,500          31,500          94,500          94,500
    General and administrative ..................         74,170          66,520         243,827         207,190
    Management fee ..............................         62,499          62,499         187,497         187,497
    Professional fees ...........................         35,625          23,250         106,875          79,750
    Amortization of deferred costs ..............          3,521           6,138          10,564          18,733
                                                    ------------    ------------    ------------    ------------

                                                         207,315         189,907         643,263         587,670
                                                    ------------    ------------    ------------    ------------

      Total other revenue and expenses ..........       (198,235)       (183,571)       (625,447)        104,922
                                                    ------------    ------------    ------------    ------------

Net (loss) income ...............................        (38,383)         37,621         602,931       1,331,727

Accumulated losses, beginning of period .........    (28,492,375)    (28,827,195)    (29,133,689)    (30,121,301)
                                                    ------------    ------------    ------------    ------------

Accumulated losses, end of period ...............   $(28,530,758)   $(28,789,574)   $(28,530,758)   $(28,789,574)
                                                    ============    ============    ============    ============


Net (loss) income allocated
  to General Partners (1.51%) ...................   $       (580)   $        568    $      9,104    $     20,109
                                                    ============    ============    ============    ============

Net (loss) income allocated
  to Initial and Special Limited Partners (1.49%)   $       (572)   $        561    $      8,984    $     19,843
                                                    ============    ============    ============    ============

Net (loss) income allocated
  to Additional Limited Partners (97%) ..........   $    (37,231)   $     36,492    $    584,843    $  1,291,775
                                                    ============    ============    ============    ============

Net (loss) income per unit of Additional Limited
  Partner Interest, based on 49,910 units
  outstanding ...................................   $      (0.75)   $       0.73    $      11.72    $      25.88
                                                    ============    ============    ============    ============

</TABLE>


                   The accompanying notes are an integral part
                         of these financial statements.

                                       -2-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements


                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                            STATEMENTS OF CASH FLOWS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                  For the nine months ended
                                                                                        September 30,
                                                                                  --------------------------
                                                                                     2004           2003
                                                                                  -----------    -----------
<S>                                                                               <C>            <C>
Cash flows from operating activities:
  Net income ..................................................................   $   602,931    $ 1,331,727

  Adjustments to reconcile net income to net cash used in operating activities:
    Share of income from partnerships .........................................    (1,228,378)    (1,226,805)
    Gain from extinguishment of debt ..........................................            --       (670,099)
    Amortization of deferred costs ............................................        10,564         18,733

    Changes in assets and liabilities:
      (Increase) decrease in other assets .....................................           (93)       335,778
      Increase in accrued interest payable ....................................        94,500         94,500
      (Decrease) increase in accounts payable and accrued expenses ............        (1,372)         2,724
                                                                                  -----------    -----------

        Net cash used in operating activities .................................      (521,848)      (113,442)
                                                                                  -----------    -----------

Cash flows from investing activities:
  Receipt of distributions from partnerships ..................................     1,165,200      1,200,394
  Additional proceeds from disposition of investment in partnership ...........           591          1,043
                                                                                  -----------    -----------

        Net cash provided by investing activities .............................     1,165,791      1,201,437
                                                                                  -----------    -----------

Net increase in cash and cash equivalents .....................................       643,943      1,087,995

Cash and cash equivalents, beginning of period ................................     2,979,778      3,420,489
                                                                                  -----------    -----------

Cash and cash equivalents, end of period ......................................   $ 3,623,721    $ 4,508,484
                                                                                  ===========    ===========

</TABLE>

                   The accompanying notes are an integral part
                         of these financial statements.

                                       -3-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2004 and 2003

                                   (Unaudited)


1.   BASIS OF PRESENTATION

     In the opinion of C.R.I.,  Inc. (CRI), the Managing  General  Partner,  the
accompanying unaudited financial statements reflect all adjustments,  consisting
of normal recurring accruals, necessary for a fair presentation of the financial
position of Capital Realty Investors-II Limited Partnership (the Partnership) as
of September 30, 2004,  and the results of its operations for the three and nine
month periods ended September 30, 2004 and 2003, and its cash flows for the nine
month periods ended  September 30, 2004 and 2003.  The results of operations for
the interim periods ended September 30, 2004, are not necessarily  indicative of
the results to be expected for the full year.

     The  accompanying  unaudited  financial  statements  have been  prepared in
conformity with accounting principles generally accepted in the United States of
America  and with the  instructions  to Form  10-QSB.  Certain  information  and
accounting  policies and  footnote  disclosures  normally  included in financial
statements prepared in conformity with accounting  principles generally accepted
in the United States of America have been condensed or omitted  pursuant to such
instructions. These condensed financial statements should be read in conjunction
with the financial  statements and notes thereto  included in the  Partnership's
annual report on Form 10-KSB at December 31, 2003.

     In December  2003,  the Financial  Accounting  Standards  Board issued FASB
Interpretation  No. 46  (revised  December  2003) (FIN 46-R),  Consolidation  of
Variable  Interest  Entities.  FIN 46-R clarifies the  application of Accounting
Research Bulletin 51, Consolidated  Financial  Statements,  for certain entities
that do not  have  sufficient  equity  at risk for the  entity  to  finance  its
activities without additional  subordinated financial support from other parties
or in which equity  investors do not have the  characteristics  of a controlling
financial interest  ("variable interest  entities").  Variable interest entities
within  the  scope of FIN 46-R  will be  required  to be  consolidated  by their
primary  beneficiary.  The primary  beneficiary of a variable interest entity is
determined  to be the party that  absorbs a majority  of the  entity's  expected
losses,  receives a majority of its  expected  returns,  or both.  The  Managing
General Partner has evaluated the Partnership's  investments in partnerships and
has  determined  that  they  are  not  variable  interest  entities  subject  to
consolidation by the Partnership under the provisions of FIN 46-R.


2. PLAN OF LIQUIDATION AND DISSOLUTION

     On February 4, 2004, the Partnership  filed a Definitive  Proxy  Statement,
pursuant to Section  14(a) of the  Securities  Exchange Act of 1934,  to solicit
consent for, among other things, the sale of all of the Partnership's assets and
the  dissolution  of the  Partnership  pursuant  to a Plan  of  Liquidation  and
Dissolution.  As of the voting  deadline,  March 22, 2004, the holders of 28,699
units of limited partner interest (57.5%) voted "for" such sale and dissolution,
and the Managing General Partner began to proceed accordingly.

                                       -4-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2004 and 2003

                                   (Unaudited)


2. PLAN OF LIQUIDATION AND DISSOLUTION - Continued

     The  Partnership  received an offer from Equity Resource  Investments,  LLC
(ERI) to purchase the  Partnership's  limited partner  interests in all 12 Local
Partnerships,  and to  purchase  the  general  partner  interests  in the  Local
Partnerships  held by affiliates of the Managing  General Partner (CRI). On July
1, 2004, ERI, the Partnership and CRI signed a non-binding  Letter of Intent, in
which ERI  agreed  in  principle  that it  and/or  its  affiliated  entities  or
assignees  would purchase all of the ownership  interests of the  Partnership in
the Local  Partnerships for  approximately  $21,000,000,  and all of the general
partner interests held by affiliates of CRI for approximately $800,000,  subject
to the terms and conditions of one or more definitive  acquisition agreements to
be  negotiated  and  entered  into  among the  parties.  Closing  would  then be
scheduled after successful  completion of an inspection  period,  receipt of all
necessary  third  party  and  governmental  and  regulatory  approvals,  and the
satisfaction of all other respective conditions to closing. On July 2, 2004, ERI
filed a Schedule 13D with the Securities and Exchange Commission (SEC) regarding
the offer. On September 15, 2004, four  definitive  acquisition  agreements were
signed in which  ERI  agreed  to  purchase  the  Partnership's  limited  partner
interests in Arrowhead  Apartments  Associates  (Arrowhead),  Blackburn  Limited
Partnership  (Country Place I), Second Blackburn  Limited  Partnership  (Country
Place II) and Moorings Apartment  Associates  (Moorings) on or about December 1,
2004, for a total of approximately  $13,750,000,  and all of the general partner
interests  held by affiliates of CRI for  approximately  $797,000.  Each sale is
conditioned on the closing of the other three sales of the Partnership's limited
partner  interests.  There can be no assurance that a sale of the  Partnership's
limited  partner  interests  will  occur.  Due  to  the  impending  sale  of the
Partnership's  limited partner interests in Arrowhead,  Country Place I, Country
Place II,  and  Moorings,  the  Partnership's  basis in each of these four Local
Partnerships,  along with the net  unamortized  amount of  acquisition  fees and
property purchase costs,  which totaled $25,461,  $21,994,  $11,885 and $25,220,
respectively,  at September 30, 2004,  has been  reclassified  to investments in
partnerships held for sale or transfer in the accompanying balance sheet at that
date.

     On October 29,  2004,  the  Partnership  and ERI agreed that they could not
come to terms for the sale of the Partnership's interests in the remaining eight
Local Partnerships, so they formally terminated the Letter of Intent as to those
interests.


3.   INVESTMENTS IN PARTNERSHIPS

a.   Due on investments in partnerships and accrued interest payable
     ---------------------------------------------------------------

                                    Westgate
                                    --------

     The Partnership defaulted on its one remaining purchase money note, related
to Westgate  Limited Dividend Housing  Association  (Westgate),  on September 1,
2003,  when the note (as extended)  matured and was not paid. The default amount
included   principal  and  accrued   interest  of  $1,400,000  and   $2,584,492,
respectively.  As of  November  11,  2004,  principal  and  accrued  interest of
$1,400,000  and  $2,732,585,  respectively,  were due. In  September  2003,  the
Managing  General  Partner  offered  to tender  the  Partnership's  interest  in
Westgate  to  the  purchase  money  noteholders,  in  full  satisfaction  of the
principal and accrued  interest  balances due on the purchase money note. In the
fall of 2003,  the  trustee  for the  noteholders  acknowledged  receipt  of the
Managing  General  Partner's  offer,  but  indicated  that it might take several
months to obtain a response from the numerous noteholders.  No response has been
received as of November 11, 2004.  There is no  assurance  that the  noteholders
will  accept the offer,  or what other  course of action the  noteholders  might
choose to pursue.

                                       -5-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2004 and 2003

                                   (Unaudited)


3.   INVESTMENTS IN PARTNERSHIPS - Continued

     The  Partnership's  inability  to pay  the  Westgate  purchase  money  note
principal and accrued interest  balance when due, and the resulting  uncertainty
regarding the Partnership's  continued ownership interest in Westgate,  does not
adversely  impact the  Partnership's  financial  condition  because the purchase
money note is nonrecourse  and secured solely by the  Partnership's  interest in
Westgate.  Therefore,  even though the Partnership's  investment in Westgate has
not produced  sufficient  value to satisfy the related  purchase money note, the
Partnership's  exposure to loss is limited because the amount of the nonrecourse
indebtedness  of the matured  purchase money note exceeds the carrying amount of
the  investment in Westgate.  Thus,  even a complete  loss of the  Partnership's
interest in Westgate  would not have a material  adverse impact on the financial
condition of the Partnership. In the event of a foreclosure or other transfer of
the Partnership's interest, the excess of the nonrecourse  indebtedness over the
carrying  amount of the  Partnership's  investment  in Westgate will result in a
taxable  gain.  This gain will be taxable to Limited  Partners  at a federal tax
rate of up to 25.0%,  as it will reflect  recapture of  depreciation  deductions
claimed in prior years. Additionally,  the Partnership would lose its investment
in Westgate and, likewise,  its share of any future cash distributed by Westgate
from rental  operations,  mortgage  debt  refinancings,  or the sale of the real
estate.

     Interest  expense on the  Partnership's  Westgate  purchase  money note was
$31,500 for each of the three month periods  ended  September 30, 2004 and 2003,
and  $94,500 for each of the nine month  periods  ended  September  30, 2004 and
2003. The accrued  interest payable on the purchase money note of $2,720,762 and
$2,626,262 as of September 30, 2004 and December 31, 2003,  respectively,  is in
default.

     Due to the possible transfer of the Partnership's interest in Westgate
to the noteholders, the Partnership's basis in the Local Partnership, along with
the net unamortized amount of acquisition fees and property purchase costs,
which totaled $466,546 and $508,229 as of September 30, 2004 and December 31,
2003, respectively, has been reclassified to investment in partnerships held for
sale or transfer in the accompanying balance sheets.

b.   Summarized financial information
     --------------------------------

     Combined  statements of operations for the 12 Local  Partnerships  in which
the  Partnership  was invested as of September  30, 2004 and 2003,  follow.  The
combined  statements  have  been  compiled  from  information  supplied  by  the
management agents of the properties and are unaudited.  The information for each
of the periods is presented  separately for those Local  Partnerships which have
positive  investment  basis (equity  method),  and for those Local  Partnerships
which  have  cumulative  losses  in excess  of the  amount of the  Partnership's
investments  in those Local  Partnerships  (equity  method  suspended).  Certain
reclassifications have been made to the 2003 amounts to conform them to the 2004
presentation.  Appended after the combined statements is information  concerning
the   Partnership's   share  of  income  from   partnerships   related  to  cash
distributions  recorded  as income,  and related to the  Partnership's  share of
income from Local Partnerships.

                                       -6-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2004 and 2003

                                   (Unaudited)


3.   INVESTMENTS IN PARTNERSHIPS - Continued


                                         COMBINED STATEMENTS OF OPERATIONS
                                                    (Unaudited)

<TABLE>
<CAPTION>
                                                                For the three months ended
                                                                       September 30,
                                                  -----------------------------------------------------------
                                                             2004                            2003
                                                  -----------------------------------------------------------
                                                    Equity                           Equity
                                                    Method        Suspended          Method        Suspended
                                                  ----------      ----------       ----------      ----------
         <S>                                      <C>             <C>              <C>             <C>
         Number of Local Partnerships                 4               8                4               8
                                                      =               =                =               =

         Revenue:
           Rental                                 $1,525,216      $2,512,053       $1,451,382      $2,482,867
           Other                                      58,648          72,673           78,796         102,719
                                                  ----------      ----------       ----------      ----------

             Total revenue                         1,583,864       2,584,726        1,530,178       2,585,586
                                                  ----------      ----------       ----------      ----------

         Expenses:
           Operating                                 675,334       1,532,367          732,006       1,534,178
           Interest                                  213,732         943,914          216,195         942,108
           Depreciation and amortization             205,573         447,683          200,136         439,376
                                                  ----------      ----------       ----------      ----------

             Total expenses                        1,094,639       2,923,964        1,148,337       2,915,662
                                                  ----------      ----------       ----------      ----------

         Net income (loss)                        $  489,225      $ (339,238)      $  381,841      $ (330,076)
                                                  ==========      ==========       ==========      ==========

         Cash distributions                       $       --      $       --       $  199,980      $   57,980
                                                  ==========      ==========       ==========      ==========

         Cash distributions recorded
           as reduction of investments
           in partnerships                        $       --      $       --       $  199,980      $       --
                                                  ==========      ==========       ==========      ==========

         Cash distributions recorded
           as income                              $       --      $       --       $       --      $   57,980

         Partnership's share of
           Local Partnership net income              159,440              --          163,212              --

         Miscellaneous                                    --             412               --              --
                                                  -----------------------------------------------------------

         Share of income from partnerships                $159,852                          $221,192
                                                          ========                          ========
</TABLE>


                                       -7-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2004 and 2003

                                   (Unaudited)


3.   INVESTMENTS IN PARTNERSHIPS - Continued


                                         COMBINED STATEMENTS OF OPERATIONS
                                                    (Unaudited)

<TABLE>
<CAPTION>
                                                                   For the nine months ended
                                                                         September 30,
                                                  ---------------------------------------------------------
                                                            2004                              2003
                                                  ------------------------         ------------------------
                                                    Equity                           Equity
                                                    Method      Suspended            Method       Suspended
                                                  ----------    ----------         ----------     ----------
         <S>                                      <C>           <C>                <C>            <C>
         Number of Local Partnerships                 4             8                  4              8
                                                      =             =                  =              =

         Revenue:
           Rental                                 $4,481,492    $ 7,536,164        $4,355,191     $7,438,406
           Other                                     124,031        218,019           146,335        308,027
                                                  ----------    -----------        ----------     ----------

             Total revenue                         4,605,523      7,754,183         4,501,526      7,746,433
                                                  ----------    -----------        ----------     ----------

         Expenses:
           Operating                               2,321,255      4,597,103         2,348,065      4,555,718
           Interest                                  641,192      2,831,746           648,586      2,826,323
           Depreciation and amortization             616,722      1,343,056           600,414      1,318,134
                                                  ----------    -----------        ----------     ----------
             Total expenses                        3,579,169      8,771,905         3,597,065      8,700,175
                                                  ----------    -----------        ----------     ----------


         Net income (loss)                        $1,026,354    $(1,017,722)       $  904,461     $ (953,742)
                                                  ==========    ===========        ==========     ==========

         Cash distributions                       $  986,287    $   178,913        $  880,481     $  319,913
                                                  ==========    ===========        ==========     ==========

         Cash distributions recorded
           as reduction of investments
           in partnerships                        $  957,414    $        --        $  874,039     $       --
                                                  ==========    ===========        ==========     ==========

         Cash distributions recorded
           as income                              $   28,873    $   178,913        $    6,442     $  319,913

         Partnership's share of Local
           Partnership net income                  1,020,001             --           899,407             --

         Miscellaneous                                    --            591                --          1,043
                                                  -------------------------        -------------------------

         Share of income from partnerships                $1,228,378                       $1,226,805
                                                          ==========                       ==========
</TABLE>

     Cash  distributions  received from Local Partnerships which have investment
basis (equity method) are recorded as a reduction of investments in partnerships
and as cash  receipts  on the  respective  balance  sheets.  Cash  distributions
received from Local  Partnerships  which have cumulative losses in excess of the
amount of the  Partnership's  investments  in those Local  Partnerships  (equity
method  suspended)  are  recorded  as share of income from  partnerships  on the
respective  statements  of  operations  and as cash  receipts on the  respective
balance sheets.  As of September 30, 2004 and 2003, the  Partnership's  share of
cumulative  losses to date for eight of the 12 Local  Partnerships  exceeded the
amount  of  the  Partnership's   investments  in  those  Local  Partnerships  by
$21,236,242  and  $19,844,126,  respectively.  As the Partnership has no further
obligation  to advance funds or provide  financing to these Local  Partnerships,
the  excess  losses  have  not  been  reflected  in the  accompanying  financial
statements.


                                       -8-

<PAGE>
                 CAPITAL REALTY INVESTORS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                           September 30, 2004 and 2003

                                   (Unaudited)


4.   RELATED PARTY TRANSACTIONS

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to reimburse the Managing  General  Partner for its direct expenses
in connection with managing the  Partnership.  The Partnership  paid $55,584 and
$176,440  for the  three  and nine  month  periods  ended  September  30,  2004,
respectively,  and $54,397  and  $173,550  for the three and nine month  periods
ended  September  30, 2003,  respectively,  to the Managing  General  Partner as
direct  reimbursement of expenses  incurred on behalf of the  Partnership.  Such
expenses are included in general and administrative expenses in the accompanying
statements of operations.

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to pay the Managing General Partner an annual incentive  management
fee  (Management  Fee) after all other expenses of the Partnership are paid. The
Partnership  paid the Managing  General  Partner a Management Fee of $62,499 for
each of the three month periods ended  September 30, 2004 and 2003, and $187,497
for each of the nine month periods ended September 30, 2004 and 2003.

     In  accordance  with the  terms of a  Definitive  Proxy  Statement  for the
Liquidation and Dissolution of the Partnership,  which was approved on March 22,
2004,  by holders of a majority of the Units of Limited  Partner  Interest,  the
Managing  General  Partner  may  receive  property  disposition  fees  from  the
Partnership  on the same  basis  as such  fees  may  currently  be paid to Local
General  Partners,  real  estate  brokers or other  third  party  intermediaries
employed  to sell  Partnership  properties,  to the extent  that CRI markets and
sells the Partnership's  properties  instead of such persons.  In addition,  the
Managing General Partner may receive a partnership liquidation fee in the amount
of $500,000,  payable  only if the Managing  General  Partner is  successful  in
liquidating all of the Partnership's  investments within 36 months from the date
the liquidation is approved,  in recognition  that one or more of the properties
in which the Partnership  holds an interest might not be saleable to parties not
affiliated with the respective Local  Partnership due to the amount and/or terms
of their  current  indebtedness.  See Note 2 above  for  additional  information
concerning an unsolicited offer to purchase the Partnership's  interests in four
Local Partnerships.

                                      # # #

                                       -9-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion Analysis of Financial Condition
          and Results of Operations


     Capital  Realty  Investors-II   Limited   Partnership's  (the  Partnership)
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations  section  is  based  on  the  financial   statements,   and  contains
information  that  may  be  considered  forward  looking,  including  statements
regarding  the effect of  governmental  regulations.  Actual  results may differ
materially from those  described in the forward  looking  statements and will be
affected  by  a  variety  of  factors  including  national  and  local  economic
conditions,  the  general  level of  interest  rates,  governmental  regulations
affecting  the  Partnership  and  interpretations  of  those  regulations,   the
competitive  environment in which the Partnership operates, and the availability
of working capital.

                          Critical Accounting Policies
                          ----------------------------

     The  Partnership has disclosed its selection and application of significant
accounting  policies in Note 1 of the notes to financial  statements included in
the  Partnership's  annual  report on Form  10-KSB at  December  31,  2003.  The
Partnership accounts for its investments in partnerships (Local Partnerships) by
the equity  method  because the  Partnership  is a limited  partner in the Local
Partnerships.  As such the  Partnership  has no control over the  selection  and
application  of  accounting  policies,  or the use of  estimates,  by the  Local
Partnerships.  Environmental  and operational  trends,  events and uncertainties
that  might  affect the  properties  owned by the Local  Partnerships  would not
necessarily have a significant  impact on the  Partnership's  application of the
equity  method of  accounting,  since the equity  method has been  suspended for
eight Local Partnerships which have cumulative losses in excess of the amount of
the Partnership's investments in those Local Partnerships.

                          New Accounting Pronouncement
                          ----------------------------

     In December  2003,  the Financial  Accounting  Standards  Board issued FASB
Interpretation  No. 46  (revised  December  2003) (FIN 46-R),  Consolidation  of
Variable  Interest  Entities.  FIN 46-R clarifies the  application of Accounting
Research Bulletin 51, Consolidated  Financial  Statements,  for certain entities
that do not  have  sufficient  equity  at risk for the  entity  to  finance  its
activities without additional  subordinated financial support from other parties
or in which equity  investors do not have the  characteristics  of a controlling
financial interest  ("variable interest  entities").  Variable interest entities
within  the  scope of FIN 46-R  will be  required  to be  consolidated  by their
primary  beneficiary.  The primary  beneficiary of a variable interest entity is
determined  to be the party that  absorbs a majority  of the  entity's  expected
losses,  receives a majority of its  expected  returns,  or both.  The  Managing
General Partner has evaluated the Partnership's  investments in partnerships and
has  determined  that  they  are  not  variable  interest  entities  subject  to
consolidation by the Partnership under the provisions of FIN 46-R.

                       Plan of Liquidation and Dissolution
                       -----------------------------------

     On February 4, 2004, the Partnership  filed a Definitive  Proxy  Statement,
pursuant to Section  14(a) of the  Securities  Exchange Act of 1934,  to solicit
consent for, among other things, the sale of all of the Partnership's assets and
the  dissolution  of the  Partnership  pursuant  to a Plan  of  Liquidation  and
Dissolution.  As of the voting  deadline,  March 22, 2004, the holders of 28,699
units of limited partner interest (57.5%) voted "for" such sale and dissolution.
See Notes 2 and 4 of the notes to financial statements contained in Part I, Item
1,  hereof,  for  additional  information  concerning  an offer to purchase  the
Partnership's limited partner interests in four Local Partnerships. There can be
no assurance that the sale of the  Partnership's  limited  partner  interests in
four Local Partnerships will occur.

                                      -10-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion Analysis of Financial Condition
          and Results of Operations - Continued


                                     General
                                     -------

     Some of the rental properties owned by the Local  Partnerships are financed
by state housing agencies.  The Managing General Partner has sold or refinanced,
and will continue to sell or refinance,  certain properties pursuant to programs
developed by these agencies.  These programs may include opportunities to sell a
property to a qualifying  purchaser  who would agree to maintain the property as
low to  moderate  income  housing,  or to  refinance  a  property,  or to obtain
supplemental  financing.  The  Managing  General  Partner  continues  to monitor
certain state  housing  agency  programs,  and/or  programs  provided by certain
lenders, to ascertain whether the properties would qualify within the parameters
of a given  program and whether  these  programs  would  provide an  appropriate
economic benefit to the Limited Partners of the Partnership.

     Some of the rental properties owned by the Local Partnerships are dependent
on the receipt of  project-based  Section 8 Rental Housing  Assistance  Payments
(HAP)  provided by the U.S.  Department of Housing and Urban  Development  (HUD)
pursuant  to Section 8 HAP  contracts.  Current  legislation  allows all expired
Section 8 HAP contracts  with rents at less than 100% of fair market rents to be
renewed for up to one year.  Expiring  Section 8 HAP  contracts  with rents that
exceed  100% of fair market  rents  could be renewed for up to one year,  but at
rents  reduced  to 100% of fair  market  rents  (Mark-to-Market).  All  expiring
Section 8 HAP  contracts  with rents  exceeding  comparable  market  rents,  and
properties  with mortgage  loans insured by the Federal  Housing  Administration
(FHA), became subject to the Mark-to-Market legislation.

     Mark-to-Market (M2M) implementation will reduce rental income at properties
that are currently  subsidized  at  higher-than-market  rental  rates,  and will
therefore  lower cash flow  available to meet  mortgage  payments and  operating
expenses.  In some instances,  a property will be able to meet its existing debt
service  payments  after the  reduction  in rental  income.  In this  case,  the
property  may enter  the M2M  "Lite"  program,  which  would not  require a debt
restructuring.  In the remaining  instances,  the affected  property may undergo
debt restructuring  according to terms determined by an individual  property and
operations  evaluation.  This would  involve  reducing the first  mortgage  loan
balance to an amount  supportable  by the  property's  operations,  taking  into
account the property's operating expenses and reduced income. The balance of the
amount  written  down from the  first  mortgage  loan  would be  converted  to a
non-performing but accruing (soft) second mortgage loan. When the existing first
mortgage loan is bifurcated  into a first and second  mortgage  loan,  the newly
created second  mortgage loan will accrue  interest at a below-market  rate. The
Internal  Revenue  Service issued a ruling in July 1998, that concluded that the
below-market  rate of interest would not generate  additional  ordinary  income.
Each property subject to M2M will be affected in a different  manner,  and it is
difficult  to  predict  the  exact  form  of  restructuring,  or  potential  tax
liabilities  to the Limited  Partners.  All  properties,  upon  entering the M2M
program   (excluding  M2M  Lite),  are  required  to  enter  into  an  agreement
restricting the property's use to affordable housing for 30 years.

     Finally, under HUD's "Mark-up-to-Market" program, properties with
expiring Section 8 HAP contracts that are located in high-rent areas as defined
by HUD are eligible for rent increases which would be necessary to bring Section
8 HAP contract rents in line with market rate rents. For properties that enter
the program and have interest rate subsidized FHA loans, the rents are adjusted
to take into account the benefits the property is already receiving from the
below-market interest rate by means of a HUD-determined adjustment factor. The
purpose of this program is to provide incentives to owners of properties with
expiring Section 8 HAP contracts not to convert these properties to market rate
housing.

                                      -11-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion Analysis of Financial Condition
          and Results of Operations - Continued


     In return for  receiving  market  rate rents under  Mark-up-to-Market,  the
property  owner must enter into a five year  conditional  Section 8 HAP contract
with HUD,  subject  to the  annual  availability  of  funding  by  Congress.  In
addition,  property  owners who enter into the  Mark-up-to-  Market  program may
receive  increased  cash flow as the limited  dividend  will be  increased in an
amount equal to the increase in gross rental revenues.

     Mercy  Terrace  Associates  (Mercy  Terrace)  had a Section 8 HAP  contract
covering 100% of its apartment  units which expired in November  2003. The Local
Managing  General  Partner  entered  Mercy  Terrace  into the  Mark-up-to-Market
program at that time. The Section 8 HAP contract will be renewed annually.  Four
Winds West Company Ltd. (Four Winds) has a Section 8 HAP contract  covering 100%
of its apartment units which expires in October 2005.  Four Winds  anticipates a
one- year renewal of its Section 8 HAP contract at expiration. Posada Associates
Limited  Partnership (Posada Vallarta) has a Section 8 HAP contract covering 21%
of  its  apartment  units  which  expires  in  February  2005.  Posada  Vallarta
anticipates  a one-year  renewal of its Section 8 HAP  contract  at  expiration.
Chevy Chase Park, Ltd. (Chevy Chase) has a Section 8 HAP contract  covering 100%
of its apartment units which expires in September 2005. Chevy Chase  anticipates
a one-year renewal of its Section 8 HAP contract at expiration.  As of September
30, 2004,  the carrying  amount of the  Partnership's  investments  in two Local
Partnerships  with  Section 8 HAP  contracts  expiring in the next 12 months was
$953,855.

     The Managing  General  Partner  continues to seek  strategies  to deal with
affordable housing policy. While the Managing General Partner cannot predict the
outcome for any particular  property at this time, the Managing  General Partner
will continue to work with the Local  Partnerships  to develop  strategies  that
maximize the benefits to investors.

                          Financial Condition/Liquidity
                          -----------------------------

     The Partnership's liquidity, with unrestricted cash resources of $3,623,721
as of September 30, 2004, along with anticipated  future cash distributions from
the Local  Partnerships,  is  expected  to be  adequate  to meet its current and
anticipated  operating  cash  needs.  As of  November  11,  2004,  there were no
material  commitments  for capital  expenditures.  The Managing  General Partner
currently  intends to retain all of the  Partnership's  remaining  undistributed
cash pending  resolution of the Partnership's  remaining purchase money note and
related accrued interest,  for its Plan of Liquidation and Dissolution,  and for
operating cash reserves.

     The  Partnership's  remaining  obligation with respect to its investment in
Local  Partnerships,  in the form of a nonrecourse  purchase money note having a
principal  balance of  $1,400,000  plus  accrued  interest of  $2,720,762  as of
September 30, 2004, matured on September 1, 2003, and was not paid. The purchase
money note,  which is nonrecourse to the  Partnership,  is secured solely by the
Partnership's interest in the related Local Partnership,  Westgate Tower Limited
Dividend Housing Association (Westgate).  Since the Partnership's  investment in
Westgate has not produced  sufficient  value to satisfy the purchase money note,
the Managing  General  Partner offered to tender the  Partnership's  interest in
Westgate  to  the  purchase  money  noteholders.  See  the  notes  to  financial
statements for additional information concerning this purchase money note.

     The  Partnership's  inability  to pay  the  Westgate  purchase  money  note
principal and accrued interest  balance when due, and the resulting  uncertainty
regarding the Partnership's  continued ownership interest in Westgate,  does not
adversely  impact the  Partnership's  financial  condition  because the purchase
money note is nonrecourse  and secured solely by the  Partnership's  interest in
Westgate.  Therefore,  even though the Partnership's  investment in Westgate has
not produced  sufficient  value to satisfy the related  purchase money note, the
Partnership's  exposure to loss is limited because the amount of the nonrecourse
indebtedness  of the matured  purchase money note exceeds the carrying amount of
the investment in Westgate. Thus, even a complete loss of the

                                      -12-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion Analysis of Financial Condition
          and Results of Operations - Continued


Partnership's  interest in Westgate would not have a material  adverse impact on
the financial  condition of the  Partnership.  In the event of a foreclosure  or
other  transfer of the  Partnership's  interest,  the excess of the  nonrecourse
indebtedness  over  the  carrying  amount  of the  Partnership's  investment  in
Westgate  will  result in a taxable  gain.  This gain will be taxable to Limited
Partners at a federal tax rate of up to 25.0%,  as it will reflect  recapture of
depreciation  deductions claimed in prior years.  Additionally,  the Partnership
would lose its  investment  in Westgate and,  likewise,  its share of any future
cash distributed by Westgate from rental operations, mortgage debt refinancings,
or the sale of the real estate.  The Partnership  received no cash distributions
from Westgate during 2003 and through  November 11, 2004; thus in the event of a
foreclosure or other transfer of the Partnership's  interest,  there would be no
material adverse impact on the cash liquidity of the Partnership.

     The  Managing  General  Partner  has  received  consent  from a majority in
interest of the Limited Partners for the liquidation of the  Partnership.  It is
anticipated that the Partnership's obligation, discussed above, would be retired
in  conjunction  with  such  liquidation.  There  can be no  assurance  that the
liquidation  will  be  completed   pursuant  to  the  Plan  of  Liquidation  and
Dissolution.

     The Partnership closely monitors its cash flow and liquidity position in an
effort to ensure that sufficient  cash is available for operating  requirements.
For the nine month period ended September 30, 2004, the receipt of distributions
from Local  Partnerships  was adequate to support  operating cash  requirements.
Cash and cash equivalents  increased $643,943 during the nine month period ended
September 30, 2004,  primarily as a result of the receipt of distributions  from
partnerships  exceeding  cash used in operating  activities.  The primary use of
cash in operating  activities was to pay management and  professional  fees, and
general and administrative expenses.

                              Results of Operations
                              ---------------------

     The  Partnership  recognized net loss of $38,383 for the three month period
ended   September  30,  2004,   compared  to  net  income  of  $37,621  for  the
corresponding  period in 2003,  primarily  due to a decrease  in share of income
from  partnerships,  and also due to  increases in  professional  legal fees and
general and administrative  expenses,  partially offset by a nominal increase in
interest revenue and a nominal decrease in amortization of deferred costs.

     The  Partnership's net income for the nine month period ended September 30,
2004, decreased $728,796 from the corresponding period in 2003, primarily due to
gain  from  extinguishment  of  debt  related  to  the  transfer  of  one  Local
Partnership in 2003,  and also due to an increase in general and  administrative
expenses  related to the  Partnership's  Definitive  Proxy  Statement and higher
reimbursed  payroll costs, an increase in professional  legal fees and a nominal
decrease in interest  revenue.  Partially  offsetting the decrease in net income
was a nominal  increase in share of income from  partnerships  and a decrease in
amortization of deferred costs.

     For financial reporting purposes, the Partnership,  as a limited partner in
the Local  Partnerships,  does not record losses from the Local  Partnerships in
excess of its  investment  to the  extent  that the  Partnership  has no further
obligation to advance funds or provide financing to the Local Partnerships. As a
result,  the  Partnership's  share of income from partnerships for the three and
nine month periods ended  September 30, 2004 did not include  losses of $332,129
and $996,393, respectively, compared to excluded losses of $332,684 and $962,344
for the three and nine month  periods ended  September  30, 2003,  respectively.
Distributions of $0 and $178,913, received from zero and five Local Partnerships
during the three and nine month periods ended September 30, 2004,  respectively,
and which have cumulative losses in excess of the  Partnership's  investments in
the Local Partnerships (equity method suspended),  were recorded as increases in
the Partnership's  share of income from partnerships when received,  compared to
distributions  of $57,980 and  $319,913,  received  from six Local  Partnerships
during the three and nine month periods ended September 30, 2003, respectively.

                                      -13-

<PAGE>
Part I. FINANCIAL INFORMATION
Item 2. Management's Discussion Analysis of Financial Condition
          and Results of Operations - Continued


     No other  significant  changes in the  Partnership's  operations have taken
place during the nine month period ended September 30, 2004.


Item 3. Controls and Procedures

     In October 2004,  representatives  of the Managing  General  Partner of the
Partnership  carried out an  evaluation of the  effectiveness  of the design and
operation of the Partnership's  disclosure controls and procedures,  pursuant to
Exchange Act Rules  13a-15 and 15d-15.  The  Managing  General  Partner does not
expect that the  Partnership's  disclosure  controls and procedures will prevent
all error and all fraud.  A control  system,  no matter how well  conceived  and
operated,  can provide only  reasonable  assurance  that the  objectives  of the
control system are met. Further, the design of a control system must reflect the
fact that there are resource  constraints,  and the benefits of controls must be
considered relative to their costs.  Because of the inherent  limitations in all
control systems,  no evaluation of controls can provide absolute  assurance that
all control issues have been detected.  These inherent  limitations  include the
realities that judgments in  decision-making  can be faulty, and that breakdowns
can occur  because  of simple  error or  mistake.  The  design of any  system of
controls also is based in part upon certain  assumptions about the likelihood of
future  events,  and there can be no  assurance  that any design will succeed in
achieving its stated goals under all  potential  future  conditions.  Over time,
controls may become inadequate  because of changes in conditions,  or the degree
of compliance  with the policies or procedures may  deteriorate.  Because of the
inherent  limitations in a cost-effective  control system,  misstatements due to
error or  fraud  may  occur  and not be  detected.  Based  on the  October  2004
evaluation,  and subject to the foregoing,  the Principal  Executive Officer and
Principal Financial Officer concluded that the Partnership's disclosure controls
and  procedures are effective as of the end of the period covered by this report
to alert them in a timely  manner to any  material  information  relating to the
Partnership that must be included in the Partnership's periodic SEC filings, and
particularly  during  the  period in which  this  report is being  prepared.  In
addition,  there have been no significant changes in the Partnership's  internal
control over financial  reporting that occurred  during the  Partnership's  most
recent fiscal quarter that have materially affected, or are reasonably likely to
materially affect, the Partnership's internal control over financial reporting.


Part II. OTHER INFORMATION
Item 3. Defaults Upon Senior Securities

     See Note 3.a. of the notes to  financial  statements  contained  in Part I,
Item 1, hereof,  for  information  concerning the  Partnership's  default on one
purchase money note.


Item 5. Other Information

     a.   There is no  established  market for the purchase and sale of units of
          additional  limited  partner  interest  (Units)  in  the  Partnership,
          although various informal  secondary market services exist. Due to the
          limited markets, however, investors may be unable to sell or otherwise
          dispose of their Units.

                                      -14-

<PAGE>
Part II. OTHER INFORMATION
Item 5. Other Information - Continued


                             Registered Tender Offer
                             -----------------------

          On January 23, 2004,  Equity  Resource Fund XXII (Equity)  initiated a
          registered  tender  offer to purchase  up to 5,000 of the  outstanding
          Units in the  Partnership at a price of $175 per Unit;  the offer,  as
          extended,  expired  March 23, 2004.  Equity is  unaffiliated  with the
          Partnership  or the Managing  General  Partner.  The price offered was
          determined solely at the discretion of Equity and does not necessarily
          represent the fair market value of each Unit.

          In response to the registered  tender offer,  on February 4, 2004, the
          Managing  General Partner filed Schedule  14D-9.  In that filing,  the
          Managing General Partner  recommended that Limited Partners reject the
          offer because it viewed the offer price as inadequate.

                           Unregistered Tender Offers
                           --------------------------

          On January 26,  2004,  Peachtree  Partners  (Peachtree)  initiated  an
          unregistered  tender  offer to  purchase up to 4.9%  (including  1,525
          Units or 3.1%,  already owned by affiliates) of the outstanding  Units
          in the  Partnership at a price of $175 per Unit less a transfer fee of
          $100 per  investor;  the offer  expired  March 23, 2004.  On March 14,
          2003,  Peachtree initiated an unregistered tender offer to purchase an
          unspecified  number of the  outstanding  Units in the Partnership at a
          price of $100 per Unit; the offer expired April 18, 2003. Peachtree is
          unaffiliated with the Partnership or the Managing General Partner. The
          prices offered were  determined  solely at the discretion of Peachtree
          and do not necessarily represent the fair market value of each Unit.

          The Managing  General Partner did not express any opinion and remained
          neutral toward the 2003 unregistered  tender offer for the purchase of
          Units described above,  and in its Definitive  Proxy Statement,  dated
          February 4, 2004,  recommended  that Limited  Partners reject the 2004
          unregistered  tender  offer  because  it  viewed  the  offer  price as
          inadequate.

     b.   On September 17, 2004, the Partnership  filed a Current Report on Form
          8-K, dated  September 15, 2004, to report that, on September 15, 2004,
          the  Partnership  and two of its  affiliates had entered into material
          definitive agreements not made in the ordinary course of business. The
          definitive  agreements  consisted of four Purchase and Sale Agreements
          with  affiliates of Equity  Resource  Investments,  LLC, to sell their
          partnership  interests in four of the twelve partnerships in which the
          Partnership currently holds interests. The sales are in furtherance of
          the liquidation of the Partnership  pursuant to a consent solicitation
          approved  by a  majority  in  interest  of the  Partnership's  limited
          partners in March 2004.

                                      -15-

<PAGE>
Part II. OTHER INFORMATION
Item 6. Exhibits


     Exhibit No.    Description
     ----------     -----------

     10.1


                    Purchase and Sale  Agreement,  dated September 15, 2004, for
                    the sale of 100% of the  partnership  interests in Arrowhead
                    Apartments Associates.

     10.2           Purchase and Sale  Agreement,  dated September 15, 2004, for
                    the sale of 100% of the  partnership  interests in Blackburn
                    Limited Partnership.

     10.3           Purchase and Sale  Agreement,  dated September 15, 2004, for
                    the  sale of 100% of the  partnership  interests  in  Second
                    Blackburn Limited Partnership.

     10.4           Purchase and Sale  Agreement,  dated September 15, 2004, for
                    the sale of 100% of the  partnership  interests  in Moorings
                    Apartments Associates.

     31.1           Certification of Principal Executive Officer, pursuant to 18
                    U.S.C.  Section 1350, as adopted  pursuant to Section 302 of
                    the Sarbanes-Oxley Act of 2002.

     31.2           Certification of Principal Financial Officer, pursuant to 18
                    U.S.C.  Section 1350, as adopted  pursuant to Section 302 of
                    the Sarbanes-Oxley Act of 2002.

     32             Certification of Principal  Executive  Officer and Principal
                    Financial  Officer,  pursuant to 18 U.S.C.  Section 1350, as
                    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                    2002.

     99             Schedule 13D, dated July 2, 2004. (Incorporated by reference
                    thereto.)

All other Items are not applicable.

                                      -16-

<PAGE>
                                    SIGNATURE


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


                                  CAPITAL REALTY INVESTORS-II LIMITED
                                    PARTNERSHIP
                                  ----------------------------------------------
                                  (Registrant)

                                  by:  C.R.I., Inc.
                                       -----------------------------------------
                                       Managing General Partner




November 11, 2004                      by:  /s/ Michael J. Tuszka
-----------------                           ------------------------------------
DATE                                        Michael J. Tuszka
                                              Vice President
                                              and Chief Accounting Officer
                                              (Principal Financial Officer
                                              and Principal Accounting Officer)

                                      -17-