SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended September 30, 1998

                                       OR

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

For the transition period from ________ to ___________

Commission file number: 333-22239


                              AeroCentury IV, Inc.
             (Exact name of Registrant as specified in its charter)

California                                                   94-3260392
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)

1440 Chapin Avenue, Suite 310
Burlingame, California 94010
(Address of principal executive offices)  (Zip code)

                                  650-340-1880
              (Registrant's telephone number including area code)

                                 Not applicable
              (Former name, former address, and former fiscal year,
                          if changed since last report)

     Check whether the issuer (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 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 ____

              APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

     Check whether the registrant  has filed all documents and reports  required
to be filed by Section 12, 13 or 15(d) of the  Securities  Exchange  Act of 1934
subsequent to the  distribution of securities under a plan confirmed by a court.
Yes ____ No ____


                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     State the number of shares  outstanding of each of the issuer's  classes of
common stock, as of the latest practicable date.

Title                                                        Outstanding

Common Stock                                                 243,420


Transitional Small Business Disclosure Format (check one);
Yes___ No X
<PAGE>

Part I.  Financial Information

Item 1.  Financial Statements

 
                              AeroCentury IV, Inc.
                                 Balance Sheets
<TABLE>
<CAPTION>

                                                                  September 30,              December 31,
                                                                      1998                       1997
                                                                   (Unaudited)

                                                                ASSETS
<S>                                                             <C>                       <C>
Current assets:
     Cash                                                       $        988,630          $      1,944,120
     Deposits                                                              8,160                         -
     Rent receivable                                                      41,900                    32,220
     Accounts receivable                                                   3,660                     4,620
                                                                ----------------          ----------------
Total current assets                                                   1,042,350                 1,980,960

Aircraft under operating lease, net of
     accumulated depreciation of $182,060
     in 1998 and $37,350 in 1997                                       3,431,460                 2,534,560

Debt issue costs, net of accumulated
     amortization of $85,360 in 1998
     and $27,920 in 1997                                                 504,160                   561,600
                                                                ----------------          ----------------           
Total assets                                                    $      4,977,970          $      5,077,120
                                                                ================          ================      

                      LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
     Accounts payable - trade                                   $          1,050          $          5,000
     Accounts payable - affiliates                                         5,480                         -
     Interest payable                                                     81,150                    81,150
     Prepaid rents                                                        37,060                         -
     Maintenance reserves                                                 11,820                         -
                                                                ----------------          ----------------      
Total current liabilities                                                136,560                    86,150

Medium-term secured notes                                              4,869,000                 4,869,000
                                                                ----------------          ---------------- 
Total liabilities                                                      5,005,560                 4,955,150
                                                                ----------------          ----------------  
Preferred stock, no par value,
     100,000 shares authorized,
     no shares issued and outstanding                                          -                         -
Common stock, no par value,
     500,000 shares authorized, 243,420
     shares issued and outstanding                                       243,420                   243,420
Accumulated deficit                                                     (271,010)                 (121,450)
                                                                ----------------          ---------------- 
Total shareholder's equity                                               (27,590)                  121,970
                                                                ----------------          ---------------- 
Total liabilities and shareholder's equity                      $      4,977,970          $      5,077,120
                                                                ================          ================
See accompanying notes.
</TABLE>


<PAGE>

                                                         AeroCentury IV, Inc.
                                                       Statements of Operations
                                                              (Unaudited)
<TABLE>
<CAPTION>


                                                                 For the Period
                                             For the             From Inception                 For the
                                           Nine Months         (February 7, 1997)            Three Months
                                       Ended September 30,      to September 30,          Ended September 30,
                                              1998                    1997             1998             1997
<S>                                     <C>                     <C>               <C>              <C>    
Revenues:

     Rent income                        $     432,020           $      32,220     $     180,360    $      32,220
     Interest income                           79,860                  21,830            17,860           21,830
                                        -------------           -------------     -------------    -------------
                                              511,880                  54,050           198,220           54,050
                                        -------------           -------------     -------------    ------------- 

Expenses:

     Depreciation expense                     144,700                   7,730            57,420            7,730
     Amortization expense                      57,440                   8,780            19,140            8,780
     Interest expense                         365,180                  74,170           121,730           72,620
     Management fees                           73,030                  26,890            24,340           24,340
     General and
        administrative                         21,090                  10,680            17,150           10,020
                                        -------------           -------------     -------------    -------------
                                              661,440                 128,250           239,780          123,490
                                        -------------           -------------     -------------    ------------- 
Net loss                                $   (149,560)           $     (74,200)    $     (41,560)   $     (69,440)
                                        ============            =============     =============    =============
Weighted average common
   shares outstanding                         243,420                  41,437           243,420           89,617
                                        =============           =============     =============    =============
Net loss per common share               $       (0.61)          $       (1.79)    $       (0.17)   $       (0.78)
                                        =============           =============     =============    =============















See accompanying notes.
</TABLE>



<PAGE>

                                                        AeroCentury IV, Inc.
                                                       Statements of Cash Flows
                                                              (Unaudited)


<TABLE>
<CAPTION>

                                                                                             For the Period
                                                                                             From Inception
                                                             For the Nine Months           (February 7, 1997)
                                                             Ended September 30,            to September 30,
                                                                    1998                          1997


<S>                                                           <C>                            <C>
Net cash provided/(used) by operating activities              $           86,120             $         (660)

Investing activities:
     Investment in secured promissory note                              (866,670)                          -
     Repayment of secured promissory note                                866,670                           -
     Purchase of interest in aircraft                                 (1,041,610)                          -
                                                               -----------------             ---------------  
Net cash used in investing activities                                 (1,041,610)                          -

Financing activities:
     Proceeds from issuance of medium-term
        secured promissory notes                                               -                     509,000
     Debt issue costs                                                          -                     (50,900)
     Proceeds from issuance of common stock                                    -                      10,000
                                                              ------------------             ---------------
Net cash provided by financing activities                                      -                     468,100
                                                              ------------------             ---------------

Net (decrease)/increase in cash                                         (955,490)                    467,440

Cash, beginning of period                                              1,944,120                           -
                                                              ------------------             ---------------

Cash, end of period                                           $          988,630             $       467,440
                                                              ==================             ===============




















See accompanying notes.
</TABLE>



<PAGE>

                              AeroCentury IV, Inc.
                          Notes to Financial Statements
                               September 30, 1998
                                   (Unaudited)


     1. Summary of Significant Accounting Policies

     Basis of presentation

     AeroCentury  IV, Inc.  (the  "Company")  was  incorporated  in the state of
California on February 7, 1997 ("Inception").  All of the Company's  outstanding
common  stock  is  owned  by  JetFleet  Holding  Corp.   ("JHC"),  a  California
corporation  formed in  January  1994.  JetFleet  Management  Corp.  ("JMC"),  a
subsidiary of JHC, is the management  company for the Company,  and also manages
AeroCentury  Corp.,  a  Delaware  corporation,   and  AeroCentury  IV,  Inc.,  a
California  corporation,  which are  affiliates  of the  Company  and which have
objectives  similar to the  Company's.  Neal D.  Crispin,  the  President of the
Company,  holds the same position with JHC and JMC and owns a significant amount
of the common stock of both companies.

     The accompanying balance sheets at September 30, 1998 and December 31, 1997
and statements of operations and cash flows for the nine months ended  September
30, 1998 and the period from Inception  (February 7, 1997) to September 30, 1997
and the three months ended  September 30, 1998 and 1997 reflect all  adjustments
(consisting of only normal recurring  accruals) which are, in the opinion of the
Company, necessary for a fair presentation of the financial results. The results
of  operations  of the nine  months of 1998 are not  necessarily  indicative  of
results  of  operations  for a full  year.  The  statements  should  be  read in
conjunction with the Summary of Significant  Account Policies and other notes to
financial  statements included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1997.

     Use of estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions that affect certain  reported amounts and disclosures.  Accordingly,
actual results could differ from those etimates.

     2. Organization and Capitalization

     The Company was formed solely for the purpose of acquiring Income Producing
Assets, consisting mainly of aircraft, aircraft engines, aircraft parts or other
transportation  industry  equipment  subject to operating or full payout  leases
with third parties.  The Company raised $4,869,000 in $1,000 Secured  Promissory
Notes  maturing on April 30, 2005 (the "Notes")  pursuant to a prospectus  dated
May 21, 1997 (the "Prospectus").

     Debt issue costs

     Pursuant to the terms of the  Prospectus,  the Company paid an Organization
and  Offering  Expense  Reimbursement  to JHC in cash in an amount up to 2.0% of
Aggregate Gross Offering Proceeds for reimbursement of certain costs incurred in
connection with the  organization  of the Company and the Offering.  The Company
also  issued  102,620  shares  of  common  stock  to  JHC  as  reimbursement  of
organization  and  offering  costs  JHC  incurred  in  excess  of the 2.0%  cash
reimbursement (collectively, the "Reimbursement").

     The Company capitalized the Reimbursement paid by the Company and amortizes
such costs over the life of the Notes (approximately eight years).


<PAGE>

                              AeroCentury IV, Inc.
                          Notes to Financial Statements
                               September 30, 1998
                                   (Unaudited)

     3. Aircraft and Aircraft Engines Under Operating Leases

     Aircraft and aircraft engines

     The  Company's  interests in aircraft are recorded at cost,  which  include
acquisition costs.  Depreciation is computed using the straight-line method over
each aircraft's estimated economic life to its estimated residual value.

     The Company owns a Shorts SD3-60-100,  serial number S/N 3606 ("S/N 3606"),
a Pratt & Whitney JT8D-9A aircraft engine, serial number 674452B (the "Engine"),
a Fairchild  Metro III aircraft,  serial number AC-647 ("S/N  AC-647") and a 50%
undivided interest in a Shorts SD-360, serial number S/N 3676 ("S/N 3676")

     Aircraft and aircraft engines leases

     S/N 3606 and S/N 3676 are subject to similar 48-month leases with a British
regional airline.

     S/N AC-647 is subject to a 36-month lease, expiring on April 13, 2001, with
a regional carrier in Uruguay.

     The Engine is used on a  McDonnell  Douglas  DC-9  aircraft  operated  by a
Mexican  regional  passenger  airline serving Mexico and the United States.  The
Engine is subject to a 60 month term  expiring  on  November  4, 2002,  with the
seller,  which in turn subleases the Engine to the operator.  The seller's lease
obligations  are  secured by an  assignment  of its rights  under the  sublease,
including  the  guaranty  of  sublease  obligations  by  the  operator's  parent
corporation.

     4. Medium-term secured Notes

     From May 1997 to October 1997 the Company accepted  subscriptions for 4,869
Notes  aggregating  $4,869,000  in  Gross  Offering  Proceeds.  Pursuant  to the
Prospectus,  the Company  subsequently  issued $4,869,000 in Notes due April 30,
2005.  The Notes  bear  interest  at an annual  rate of 10.00%  which is due and
payable on a quarterly basis, in arrears, on the first business day of February,
May, August and November.  The carrying amount of the notes payable approximates
fair value.

     5. Secured note receivable

     As provided in the prospectus  for the Offering,  the Company may invest in
Financial Assets,  including indebtedness secured by Equipment. On March 4, 1998
the Company loaned $866,667 to ACY in connection with ACY's purchase of a Shorts
SD-360  aircraft.  ACY issued a secured  promissory note (the "ACY Note") to the
Company in the amount of the loan,  which was secured by a perfected  first lien
security  interest  in the  aircraft.  Pursuant  to  the  note's  provision  for
prepayment  at any time  without  penalty,  ACY repaid  the note in full  during
August 1998.

     6. Related Party Transactions

     The Company's  Income Producing Asset portfolio is managed and administered
under the terms of a management agreement with JMC. Under this agreement, on the
last day of each calendar quarter, JMC receives a quarterly management fee equal
to 0.5% of the Company's  Aggregate Gross Proceeds received through the last day
of such  quarter.  During  the first  nine  months of 1998 and the  period  from
Inception  (February 7, 1997) to September 30, 1997, the Company paid a total of
$73,030 and $26,890, respectively in management fees to JMC.


<PAGE>

                              AeroCentury IV, Inc.
                          Notes to Financial Statements
                               September 30, 1998
                                   (Unaudited)


     6. Related Party Transactions (continued)

     JMC may  receive a  brokerage  fee for  locating  assets  for the  Company,
provided that such fee is not more than the  customary  and usual  brokerage fee
that would be paid to an unaffiliated party for such a transaction. The total of
the  Aggregate  Purchase  Price plus the  brokerage  fee cannot  exceed the fair
market value of the asset based on appraisal. JMC may also receive reimbursement
of Chargeable  Acquisition  Expenses  incurred in connection  with a transaction
which are payable to third  parties.  The Company  paid JMC $58,500 in brokerage
fees during the first nine months of 1998. No such  brokerage fees or Chargeable
Acquisition Expenses were paid to JMC during the same period in 1997.

     As  discussed  in Note 1, the  Company  reimbursed  JHC for  certain  costs
incurred in connection  with the  organization  of the Company and the Offering.
Because the Offering was closed to new  subscriptions  during  October 1997, the
Company did not reimburse JHC for any organization and offering  expenses during
the first nine months of 1998.  During the period from  Inception  (February  7,
1997) to September 30, 1997, the Company paid $87,760 to JHC.

     As discussed  in Note 5, the Company  loaned funds to ACY during March 1998
in  connection  with ACY's  purchase  of an  aircraft.  The  Company  received a
promissory note,  secured by the aircraft,  from ACY. The note was repaid by ACY
during August 1998.



<PAGE>

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

     Capital Resources and Liquidity
 
     On September 30, 1998,  the Company had cash balances of $996,790.  Of this
amount,  $8,160 was deposits which represent maintenance reserves collected from
lessees and interest earned on those funds, as applicable.  The remainder of the
Company's cash balance was held  primarily for the interest  payment made to the
Noteholders in November 1998, for normally recurring expenses and for investment
in additional Income Producing Assets.
 
     Since  Inception,  the Company's  funds have come in the form of an initial
contribution  from JHC,  proceeds from the Offering and rental  revenue from the
Income Producing Assets purchased using those proceeds.  The Company's liquidity
will vary in the future,  increasing  to the extent  cash flows from  operations
exceed expenses, and decreasing as interest payments are made to the Noteholders
and to the extent expenses exceed cash flows from leases.
 
     The Company's  primary use of its operating cash flow is interest  payments
to its  Unitholders.  Excess cash flow,  after payment of interest and operating
expenses is held for investment in additional Income Producing Assets. Since the
Company has  acquired  Income  Producing  Assets which are subject to triple net
leases  (the lessee pays  operating  and  maintenance  expenses,  insurance  and
taxes), the Company does not anticipate that it will incur significant operating
expenses in connection with ownership of its Income  Producing Assets as long as
they remain on lease.
 
     The Company currently has available adequate reserves to meet its immediate
cash requirements. The leases for the Company's aircraft expire at varying times
between July 2001 and November 2002.
 
     Cash  flows  from  operations  during  the first  nine  months of 1998 were
primarily  from rent  received  for the  Company's  aircraft  leases,  including
prepaid rent and rent accrued as  receivable  at December 31, 1997.  The Company
had no significant operations until the third quarter of 1997.
 
     Cash flows used in  investing  activities  during the first nine  months of
1998  consisted  of the  purchase  of S/N AC-647.  The  Company  used no cash in
investing activities during the first nine months of 1997.
 
     The decrease in cash flows from financing  activities from year to year was
a result of the termination of the Offering during October 1997.
 
     Results of Operations
 
     The Company  recorded a net loss of  ($149,560) or ($0.61) and ($74,200) or
($1.79) per share for the nine months  ended  September  30, 1998 and the period
from Inception (February 7, 1997) to September 30, 1997, respectively, and a net
loss of  ($41,560)  or ($0.17) per share and  ($69,440) or ($0.78) per share for
the three months ended  September  30, 1998 and 1997,  respectively.  The losses
were a result of management  fees and  depreciation,  amortization  and interest
expense,  which more than offset the rental  income  received for the  Company's
aircraft.  The  increases in revenue and expenses from year to year was a result
of the  additional  proceeds  raised  during  the third  quarter of 1997 and the
aircraft acquired with those proceeds.
 
     Factors that May Affect Future Results
 
     Year 2000  Considerations.  Management  of the  Company  has  directed  its
information  technology  ("IT")  manager to require  any  software  or  hardware
purchased for use by the Company to have a warranty of Year 2000 compliance.  It
has also directed its IT manager to study any systems that may require Year 2000
remediation. The IT manager has determined that, because the Company's IT system
is based on a "MacOS"  system,  the Company's  internal  technology  systems are
ready for Year 2000, and there should not be any material costs  associated with
such  remediation.  Furthermore,  the  phone  and  internet  systems  have  been
warranted by their vendors for Year 2000 compliance.  The Company's internal and
administrative  operations  are  not  highly  dependent  on any  other  advanced
technology system,  and,  consequently,  management  believes that the Company's
exposure  to  loss  as a  result  of  Year  2000  issues  in  its  internal  and
administrative operations is not significant.
 
     Management  believes  that the  electronic  systems  used in the  equipment
leased by the  Company to lessees  will not be  materially  affected by the Year
2000 and that any remediation of the technology systems embedded in the aircraft
that it leases will not be a material expense to the Company;  however, a formal
study has not yet been  undertaken  of the  aircraft  equipment  on  lease.  The
Company will be consulting with all the manufacturers of its leased equipment to
confirm Year 2000  compliance.  Since the Company's  leases  generally place all
maintenance  and repair  obligations  on the  lessees,  to the  extent  that the
aircraft  are on lease  when the  Year  2000  problem  is  identified,  it would
generally be the lessee's and not the Company's  responsibility to remediate any
Year 2000 problem with the leased aircraft
 
     Of  course,  to the  extent  that a lessee  has  Year  2000  problems  that
significantly  adversely  affect its overall  financial  status,  such  material
problems may affect the lessee's  operations and increase the risk of default by
a lessee  under its lease with the  Company.  Furthermore,  Year 2000 issues may
have a material  impact on FAA  operations  and the  operations  of certain  air
carriers,  which in turn  would  negatively  affect  the  aircraft  industry  in
general.
 
     The Company's  essential  functions  are not  dependent  upon any key third
party vendors or service  providers  related to the leasing or finance business,
and  consequently,  the  interruption  of  goods  and  services  from  any  such
industry-specific  third party vendor or service  provider to the Company is not
likely to cause a material loss to the Company. Of course, the Company' ordinary
business  operation is dependent  upon  vendors that provide  basic  services to
businesses  generally,  such as  utility  companies,  phone  and  long  distance
companies,  courier  services,  banking  institutions.  The  state of Year  2000
readiness of these third  parties  cannot be assessed by the  Company;  however,
management believes that a temporary interrruption in services to the Company by
these types of service  providers  caused by Year 2000 problems  would not cause
material  losses to the Company.  An extended loss of these  services,  however,
could adversely  affect the Company's  business and financial  performance.  The
Company has not yet made any  contingency  plans for the extended  loss of these
basic services.


<PAGE>

Part II.  Other Information

Item 1.  Legal Proceedings

         No disclosure required.

Item 2.  Changes in Securities

         No disclosure required.

Item 3.  Defaults Upon Senior Securities

         No disclosure required.

Item 4.  Submission of Matters to a Vote of Security Holders

         No disclosure required.

Item 5.  Other Information

         No disclosure required.

Item 6.  Exhibits and Reports on Form 8-K

1.  Exhibit 27.  Financial Data Schedule


2.  Reports on Form 8-K
 
       None
<PAGE>

                                   SIGNATURES

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

                                            AeroCentury IV, Inc.

November 5, 1998                     By:     /s/ Neal D. Crispin  
Date                                    ----------------------------------------
                                         Neal D. Crispin, President and Chairman
                                         of the Board of Directors of the
                                         Registrant, Chief Financial Officer