SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ----------------------

                                    FORM 10-Q
                     QUARTERLY REPORT PURSUANT TO SECTION 13
                 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 30, 2001

                     MERRILL LYNCH PREFERRED CAPITAL TRUST II
       (Exact name of Registrant as specified in its certificate of trust)

                         COMMISSION FILE NO.: 1-7182-04

       Delaware                                          13-7108354
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

  4 World Financial Center
     New York, New York                                   10080
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code: (212) 449-1000


           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of each class                    Name of each exchange on which registered
-------------------                    -----------------------------------------
8% Trust Originated                    New York Stock Exchange
Preferred Securities ("TOPrS")
(and the related guarantee)

        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

                     MERRILL LYNCH PREFERRED FUNDING II, L.P.
                  (Exact name of Registrant as specified in its
                      certificate of limited partnership)

                         COMMISSION FILE NO.: 1-7182-03

          Delaware                                     13-3926165
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

   4 World Financial Center
      New York, New York                                     10080
(Address of principal executive offices)                   (Zip Code)

 Registrant's telephone number, including area code: (212) 449-1000


           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of each class                    Name of each exchange on which registered
-------------------                    -----------------------------------------
8% Partnership Preferred               New York Stock Exchange
Securities (and the related
guarantee)

        SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

Indicate by check mark whether the Registrants (1) have 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
Registrants were required to file such reports), and (2) have been subject to
such requirements for the past 90 days. Yes |X| No |_|

As of May 10, 2001 no voting stock was held by non-affiliates of the
Registrants.
================================================================================
<PAGE>

                         PART I - FINANCIAL INFORMATION
                         ------------------------------

ITEM 1.   FINANCIAL STATEMENTS
          --------------------
<TABLE>
<CAPTION>

MERRILL LYNCH PREFERRED CAPITAL TRUST II
BALANCE SHEETS  (unaudited)
(dollars in thousands, except per security amounts)
-----------------------------------------------------------------------------------------------------------------------



                                                                                      MARCH 30, 2001  DECEMBER 29, 2000
                                                                                      --------------  -----------------
<S>                                                                                      <C>                <C>
ASSETS

Investment in partnership preferred securities                                            $  309,278         $  309,278
Income receivable                                                                                  -              6,186
                                                                                          ----------         ----------
Total Assets                                                                              $  309,278         $  315,464
                                                                                          ==========         ==========

LIABILITY AND STOCKHOLDERS' EQUITY

Distributions payable                                                                     $        -         $    6,186
                                                                                          ----------         ----------
Stockholders' equity:

   Preferred  securities (8% Trust Originated Preferred Securities;
      12,000,000 authorized, issued, and outstanding; $25 liquidation
      amount per security)                                                                   300,000            300,000

   Common securities (8% Trust Common Securities;
      371,136 authorized, issued, and outstanding;
      $25 liquidation amount per security)                                                     9,278              9,278
                                                                                          ----------         ----------
   Total Stockholders' equity                                                                309,278            309,278
                                                                                          ----------         ----------

Total Liability and Stockholders' Equity                                                  $  309,278         $  315,464
                                                                                          ==========         ==========
</TABLE>

See Note to Financial Statements

                                       2
<PAGE>

<TABLE>
<CAPTION>

MERRILL LYNCH PREFERRED CAPITAL TRUST II
STATEMENTS OF EARNINGS  (unaudited)
(dollars in thousands)
------------------------------------------------------------------------------------------------------------

                                                                           FOR THE THREE MONTHS ENDED
                                                                     ---------------------------------------

                                                                         MARCH 30, 2001       MARCH 31, 2000
                                                                         --------------       --------------
<S>                                                                           <C>                <C>
EARNINGS

Income on partnership preferred securities                                    $   6,186            $   6,186
                                                                              =========            =========


</TABLE>

See Note to Financial Statements


                                       3
<PAGE>

<TABLE>
<CAPTION>

MERRILL LYNCH PREFERRED CAPITAL TRUST II
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY  (unaudited)
(dollars in thousands)
-------------------------------------------------------------------------------------------------

                                                                 FOR THE THREE MONTHS ENDED
                                                          ---------------------------------------

                                                              MARCH 30, 2001       MARCH 31, 2000
                                                              --------------       --------------
<S>                                                              <C>                 <C>
PREFERRED SECURITIES

Balance, beginning and end of period                              $  300,000           $  300,000
                                                                  ----------           ----------

COMMON SECURITIES

Balance, beginning and end of period                                   9,278                9,278
                                                                  ----------           ----------

UNDISTRIBUTED EARNINGS

Balance, beginning of period                                               -                    -
Earnings                                                               6,186                6,186
Distributions                                                         (6,186)              (6,186)
                                                                  ----------           ----------
Balance, end of period                                                     -                    -
                                                                  ----------           ----------


Total Stockholders' Equity                                        $  309,278           $  309,278
                                                                  ==========           ==========
</TABLE>

See Note to Financial Statements

                                       4
<PAGE>

<TABLE>
<CAPTION>

MERRILL LYNCH PREFERRED CAPITAL TRUST II
STATEMENTS OF CASH FLOWS  (unaudited)
(dollars in thousands)
-------------------------------------------------------------------------------------------------------------------

                                                                                   FOR THE THREE MONTHS ENDED
                                                                            ---------------------------------------

                                                                                MARCH 30, 2001       MARCH 31, 2000
                                                                                --------------       --------------
<S>                                                                                 <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Earnings                                                                          $   6,186            $   6,186
   Decrease in income receivable                                                         6,186                    -
                                                                                     ---------            ---------
      Cash provided by operating activities                                             12,372                6,186
                                                                                     ---------            ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Distributions                                                                       (12,372)              (6,186)
                                                                                     ---------            ---------
      Cash used for financing activities                                               (12,372)              (6,186)
                                                                                     ---------            ---------

NET CHANGE IN CASH                                                                           -                    -

CASH, BEGINNING OF PERIOD                                                                    -                    -
                                                                                     ---------            ---------
CASH, END OF PERIOD                                                                  $       -            $       -
                                                                                     =========            =========



SUPPLEMENTAL DISCLOSURE OF CASH FLOWS:

Preferred and common distributions of $6,000 and $186, respectively, were
accrued at December 29, 2000.

</TABLE>

See Note to Financial Statements

                                       5
<PAGE>



MERRILL LYNCH PREFERRED CAPITAL TRUST II
NOTE TO FINANCIAL STATEMENTS  (unaudited)
MARCH 30, 2001
-------------------------------------------------------------------------------


BASIS OF PRESENTATION

These  unaudited  financial  statements  should be read in conjunction  with the
audited  financial  statements  included  in the  Annual  Report on Form 10-K of
Merrill  Lynch  Preferred  Capital  Trust II (the  "Trust")  for the year  ended
December  29, 2000.  The  December  29, 2000 balance  sheet was derived from the
audited  financial   statements.   The  interim  financial  statements  for  the
three-month  periods  are  unaudited;  however,  in the  opinion of the  Regular
Trustees of the Trust,  all  adjustments,  consisting  only of normal  recurring
accruals necessary for a fair statement of the results of operations,  have been
included.

                                       6
<PAGE>

<TABLE>
<CAPTION>

MERRILL LYNCH PREFERRED FUNDING II, L.P.
BALANCE SHEETS  (unaudited)
(dollars in thousands)
----------------------------------------------------------------------------------------------------------------



                                                                              MARCH 30, 2001   DECEMBER 29, 2000
                                                                              --------------   -----------------
<S>                                                                              <C>                 <C>
ASSETS

Cash                                                                             $         1         $         1
                                                                                 -----------         -----------
Investments:
   Affiliate debentures                                                              360,218             360,218
   U.S. Treasury bills                                                                 3,739               3,683
                                                                                  ----------          ----------
   Total investments                                                                 363,957             363,901

Income receivable                                                                          -               7,204
                                                                                  ----------          ----------
Total Assets                                                                      $  363,958          $  371,106
                                                                                  ==========          ==========

LIABILITY AND PARTNERS' CAPITAL

Distributions payable                                                             $        -          $    7,204
                                                                                  ----------          ----------
Partners' capital:
   Limited partnership interest                                                      309,278             309,278
   General partnership interest                                                       54,680              54,624
                                                                                  ----------          ----------
   Total partners' capital                                                           363,958             363,902
                                                                                  ----------          ----------

Total Liability and Partners' Capital                                             $  363,958          $  371,106
                                                                                  ==========          ==========
</TABLE>

See Note to Financial Statements

                                       7
<PAGE>

<TABLE>
<CAPTION>


MERRILL LYNCH PREFERRED FUNDING II, L.P.
STATEMENTS OF EARNINGS  (unaudited)
(dollars in thousands)
-----------------------------------------------------------------------------------------------


                                                               FOR THE THREE MONTHS ENDED
                                                        ---------------------------------------

                                                            MARCH 30, 2001       MARCH 31, 2000
                                                            --------------       --------------
<S>                                                            <C>                  <C>
EARNINGS

Interest income:
   Affiliate debentures                                         $    7,204           $    7,204
   U.S. Treasury bills                                                  57                   48
                                                                ----------           ----------
Earnings                                                        $    7,261           $    7,252
                                                                ==========           ==========


</TABLE>

See Note to Financial Statements


                                       8
<PAGE>

<TABLE>
<CAPTION>

MERRILL LYNCH PREFERRED FUNDING II, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL  (unaudited)
(dollars in thousands)
------------------------------------------------------------------------------------------------


                                                                FOR THE THREE MONTHS ENDED
                                                         ---------------------------------------

                                                             MARCH 30, 2001       MARCH 31, 2000
                                                             --------------      ---------------
<S>                                                             <C>                  <C>
LIMITED PARTNER'S CAPITAL

Balance, beginning of period                                     $  309,278           $  309,278
Net income allocated to limited partner                               6,186                6,186
Distributions                                                        (6,186)              (6,186)
                                                                 ----------           ----------
Balance, end of period                                              309,278              309,278
                                                                 ----------           ----------


GENERAL PARTNER'S CAPITAL

Balance, beginning of period                                         54,624               54,613
Net income allocated to general partner                               1,075                1,066
Distributions                                                        (1,019)              (1,018)
                                                                 ----------           ----------
Balance, end of period                                               54,680               54,661
                                                                 ----------           ----------

TOTAL PARTNERS' CAPITAL                                          $  363,958           $  363,939
                                                                 ==========           ==========
</TABLE>

See Note to Financial Statements

                                       9
<PAGE>


<TABLE>
<CAPTION>

MERRILL LYNCH PREFERRED FUNDING II, L.P.
STATEMENTS OF CASH FLOWS  (unaudited)
(dollars in thousands)
-------------------------------------------------------------------------------------------------------------------


                                                                                   FOR THE THREE MONTHS ENDED
                                                                            ---------------------------------------

                                                                                MARCH 30, 2001       MARCH 31, 2000
                                                                                --------------       --------------

<S>                                                                                 <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Earnings                                                                          $   7,261            $   7,252
   Accretion of U.S. Treasury bills                                                        (57)                 (48)
   Decrease in income receivable                                                         7,204                    -
                                                                                     ---------            ---------
      Cash provided by operating activities                                             14,408                7,204
                                                                                     ---------            ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Distributions to limited partner                                                    (12,372)              (6,186)
   Distributions to general partner                                                     (2,036)              (1,018)
                                                                                     ---------            ---------
      Cash used for financing activities                                               (14,408)              (7,204)
                                                                                     ---------            ---------

NET CHANGE IN CASH                                                                           -                    -

CASH, BEGINNING OF PERIOD                                                                    1                    -
                                                                                     ---------            ---------
CASH, END OF PERIOD                                                                  $       1            $       -
                                                                                     =========            =========



SUPPLEMENTAL DISCLOSURE OF CASH FLOWS:

Distributions of $7,204 were accrued at December 29, 2000.

</TABLE>

See Note to Financial Statements

                                       10
<PAGE>


MERRILL LYNCH PREFERRED FUNDING II, L.P.
NOTE TO FINANCIAL STATEMENTS  (unaudited)
MARCH 30, 2001
--------------------------------------------------------------------------------



BASIS OF PRESENTATION

These  unaudited  financial  statements  should be read in conjunction  with the
audited  financial  statements  included  in the  Annual  Report on Form 10-K of
Merrill Lynch Preferred Funding II, L.P. (the  "Partnership") for the year ended
December  29, 2000.  The  December  29, 2000 balance  sheet was derived from the
audited  financial   statements.   The  interim  financial  statements  for  the
three-month  periods  are  unaudited;  however,  in the  opinion of the  General
Partner of the Partnership, all adjustments, consisting only of normal recurring
accruals necessary for a fair statement of the results of operations,  have been
included.

                                       11
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Merrill Lynch Preferred  Capital Trust II (the "Trust") is a statutory  business
trust formed under the Delaware  Business  Trust Act, as amended,  pursuant to a
declaration of trust and the filing of a certificate of trust with the Secretary
of State on January 16, 1997, which was  subsequently  amended by an amended and
restated declaration of trust dated as of February 4, 1997. The Trust exists for
the exclusive  purposes of (i) issuing trust securities,  consisting of 8% Trust
Originated  Preferred  Securities (the "TOPrS") and trust common securities (the
"Trust  Common   Securities"),   representing   undivided  beneficial  ownership
interests in the assets of the Trust,  (ii)  investing the gross proceeds of the
trust  securities  in 8%  Partnership  Preferred  Securities  (the  "Partnership
Preferred  Securities")  issued by Merrill Lynch Preferred Funding II, L.P. (the
"Partnership"),  and (iii) engaging in only those other activities  necessary or
incidental thereto.

The  Partnership  is a limited  partnership  formed under the  Delaware  Revised
Uniform Limited Partnership Act, as amended, pursuant to an agreement of limited
partnership  and the filing of a  certificate  of limited  partnership  with the
Secretary of State on January 16,  1997,  which was  subsequently  amended by an
amended and restated  agreement of limited  partnership  dated February 6, 1997.
Merrill  Lynch & Co., Inc.  (the  "Company") is the sole general  partner of the
Partnership.  The  Partnership is managed by the general  partner and exists for
the exclusive purposes of (i) issuing its partnership  interests,  consisting of
the Company's general partner interest and the Partnership Preferred Securities,
(ii)  investing  the  proceeds  thereof in certain  eligible  securities  of the
Company and wholly owned subsidiaries of the Company (the "Affiliate  Investment
Instruments")  and certain eligible debt securities,  and (iii) engaging in only
those other activities necessary or incidental thereto.

The Registrants'  activities are limited to issuing securities and investing the
proceeds as described above.  Since the Trust was organized on January 16, 1997,
its activities,  as specified in its declaration of trust,  have been limited to
the issuance of the TOPrS and the Trust Common Securities,  the investing of the
proceeds  in  the  Partnership   Preferred   Securities,   and  the  payment  of
distributions  on the TOPrS and the Trust Common  Securities in accordance  with
their terms.  Since the  Partnership  was  organized  on January 16,  1997,  its
activities,  as specified in its  agreement  of limited  partnership,  have been
limited to the issuance of the Partnership Preferred Securities,  the receipt of
a capital  contribution from the Company, as general partner,  the investment of
the proceeds in  Affiliate  Investment  Instruments  and certain  eligible  debt
securities,  and the  payment  of  distributions  on the  Partnership  Preferred
Securities.


ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

On February 6, 1997, the Trust invested the gross proceeds from the sale of the
Trust Common  Securities and the TOPrS in the Partnership  Preferred  Securities
(the "Trust Assets").  The Partnership,  in turn, invested the proceeds from the
sale of the Partnership Preferred Securities and a capital contribution from the
Company in certain Affiliate Investment Instruments and eligible securities (the
"Partnership  Assets").  To the extent the  Partnership has funds available from
the  Partnership  Assets,  the general  partner of the  Partnership  may declare
distributions to the Trust, as holder of the Partnership  Preferred  Securities.
The  Trust's  ability  to pay  distributions  to the  holders  of the  TOPrS  is
dependent  on  its  receipt  of  distributions  on the  Trust  Assets  from  the
Partnership. Therefore, upon the receipt by the Partnership of payments from the
Partnership  Assets and the  distribution  thereof to the Trust,  the Trust will
pass through such payments to the holders of the TOPrS.


                                       12
<PAGE>


                           PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         12   Computation  of Ratios of Earnings to Combined  Fixed Charges and
              Preferred Securities Distributions


(b)      Reports on Form 8-K

         None



                                       13
<PAGE>



                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934, the Registrants  have duly caused this report to be signed on their
behalf by the  undersigned,  thereunto  duly  authorized on the 10th day of May,
2001.


                               MERRILL LYNCH PREFERRED CAPITAL TRUST II*

                               By: /s/ JOHN C. STOMBER
                                   ---------------------------------------------
                               Name:   John C. Stomber
                               Title:  Regular Trustee


                               By: /s/ STANLEY SCHAEFER
                                   ---------------------------------------------
                               Name:   Stanley Schaefer
                               Title:  Regular Trustee


                               MERRILL LYNCH PREFERRED FUNDING II, L.P.*


                               By: MERRILL LYNCH & CO., INC., as General Partner

                               By: /s/ JOHN C. STOMBER
                                   ---------------------------------------------
                               Name:   John C. Stomber
                               Title:  Senior Vice President and Treasurer



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

* There is no  principal  executive  officer(s),  principal  financial  officer,
controller,   principal   accounting  officer  or  board  of  directors  of  the
Registrants.  The Trustees of the Trust (which include the Regular Trustees, the
Property  Trustee and the  Delaware  Trustee)  together  exercise all powers and
perform all functions with respect to the Trust.


                                       14
<PAGE>



                                INDEX TO EXHIBITS

EXHIBITS

12       Computation  of  Ratios of  Earnings  to  Combined  Fixed  Charges  and
         Preferred Securities Distributions



                                       15
<PAGE>