1
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

[ X ]           Annual Report Pursuant to Section 13 or 15(d) of
 ---                   the Securities Exchange Act of 1934
                   For the fiscal year ended December 31, 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: 0-16836
                                                 -------

                                 JETSTREAM, L.P.
                                 ---------------
              Exact name of registrant as specified in its charter


           Delaware                                              84-1053359
           --------                                              ----------
State or other jurisdiction of                                 I.R.S. Employer 
incorporation or organization                                 Identification No.

Attn.:  Andre Anderson,
----------------------
3 World Financial Center, 29th Floor, New York, New York            10285
--------------------------------------------------------            -----
Address of principal executive offices                             Zip code

Registrant's telephone number, including area code:  (212) 526-3183

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

              LIMITED PARTNERSHIP DEPOSITORY UNITS (the "Units")
              LIMITED PARTNERSHIP INTERESTS (underlying the Units)
              ----------------------------------------------------
                                 Title of Class


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for 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
                                      ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
                              ---

State the aggregate market value of the voting stock held by non-affiliates of
the registrant: Not applicable

                      DOCUMENTS INCORPORATED BY REFERENCE:

Prospectus of the registrant dated September 10, 1987, as filed pursuant to rule
424(c) of the Securities Act of 1933, as amended (Portions of Parts I, II, III
and IV).

Annual Report to Unitholders for the year ended December 31, 1998 (Portions of
Parts I, II, III & IV).
<PAGE>
2

                                     PART I

Item 1. Business.

General Development of Business
-------------------------------
JetStream, L.P. (the "Partnership") is a limited partnership organized under the
laws of the State of Delaware on April 16, 1987. The general partners of the
Partnership (the "General Partners") are CIS Aircraft Partners, Inc. ("CAP"),
the Managing General Partner, a Delaware corporation that is an affiliate of
Continental Information Systems Corporation, and Jet Aircraft Leasing Inc., the
Administrative General Partner, a Delaware corporation that is an affiliate of
Lehman Brothers Inc. ("Lehman") (See Item 10).

Although the Partnership was organized on April 16, 1987, the Partnership
conducted no activities and recognized no revenues, profits or losses prior to
October 28, 1987, at which time the Partnership commenced operations. During the
period between October 29, 1987 and November 4, 1987, the Partnership acquired
for cash nine used commercial aircraft (together, the "Aircraft"). As of
December 31, 1998, the Partnership had six of the nine original Aircraft
remaining in its portfolio. For a description of the investments in the
Aircraft, please refer to the Message to Investors and Note 4 to the financial
statements of the Partnership's Annual Report to Unitholders for the year ended
December 31, 1998, which is filed as an exhibit under Item 14 and incorporated
herein by reference.

On September 10, 1987, the Partnership commenced an offering (the "Offering") on
a "best efforts basis" of $97,900,000 of limited partnership depositary units
("Units"). The closing of the offering occurred on October 28, 1987, with a
total of 4,895,005 Units being sold at a price of $20.00 per Unit, for a total
of approximately $97,900,000. The net proceeds of the offering after payment of
offering and organization costs and acquisition fees aggregated $85,747,510.

Narrative Description of Business
---------------------------------
The Partnership is engaged in the business of managing a portfolio of used
commercial aircraft subject to triple net operating leases with commercial air
carriers. The Partnership is required to dissolve and distribute all of its
assets not later than December 31, 2027. The Partnership may reinvest the
proceeds of sales of Aircraft occurring prior to November 4, 1998; thereafter,
the net proceeds of sales of Aircraft will be distributed to the partners, after
deductions of amounts necessary for working capital and certain reserves.

The Partnership's investment objectives are to:

      (1)  generate quarterly cash distributions to holders of Units (the
           "Unitholders"), substantially tax-sheltered during the initial years
           of the Partnership's operations, initially at a rate of approximately
           12%, subject to conditions stated in the prospectus pursuant to which
           the Units were offered and sold (the "Prospectus"), dated September
           10, 1987;

      (2)  preserve and protect the value of the Partnership's assets.

The following table describes the Partnership's portfolio of aircraft as of
December 31, 1998. This table provides certain operational statistics and
estimated market values for the aircraft in the portfolio. The estimated market
values of the Aircraft are affected by, and subject to future changes in a
variety of factors, including, but not limited to, the Aircraft's usage, age and
lease rate, the credit worthiness of the lessee, government noise and
maintenance regulations and the supply and demand of aircraft in the market
place with similar lift capacity. Reference is made to Item 7, Management's
Discussion and Analysis of Financial Condition and Results of Operations of this
Form 10-K and the Message to Investors and Note 4 to the Financial Statements of
the Partnership's Annual Report to Unitholders for the year ended December 31,
1998, for additional information on the lease terms for each aircraft. Reference
is also made to the Message to Investors section of the Partnership's Annual
Report to Unitholders for the year ended December 31, 1998, for an overview of
the aircraft leasing industry.
<PAGE>
3

<TABLE>
<CAPTION>
                                                           Estimated                                 Cumulative   Cumulative
Aircraft Model                 Acquisition    Net Book       Market        Lease          Noise       Flight         Flight
Year Delivered     Lessee        Cost(1)      Value(2)      Value(3)    Expiration(4)   Compliance    Cycles(5)     Hours(5)
----------------------------------------------------------------------------------------------------------------------------
<S>              <C>           <C>           <C>           <C>              <C>          <C>            <C>          <C>   
MD-80 Series     Continental   $27,396,997   $ 4,392,835   $13,750,000       3/15/00     Stage 3        18,250       37,500
  1986

B-737-200 ADV    Delta         $15,222,609   $ 1,148,960   $ 3,573,800       9/30/99     Stage 2        38,900       57,840
  1979

B-737-200        Eastwind      $ 7,601,999   $   171,875   $   500,000      11/30/99     Stage 3        73,340       64,470
  1971

B-737-200        Eastwind      $ 7,601,999   $   171,875   $   500,000      11/30/99     Stage 2        72,600       64,490
  1971

B-727-200        (6)           $ 5,448,499   $         0   $   349,450           (6)     Stage 2        47,870       70,750
  1969

B-727-200        (6)           $ 5,448,499   $         0   $   349,450           (6)     Stage 2        47,060       69,450
  1969                         -----------   -----------   -----------

TOTALS                         $68,720,602   $ 6,085,544   $19,022,700
                               ===========   ===========   ===========

----------------------------------------------------------------------------------------------------------------------------
NOTES:

<FN>
(1)  Includes a 1.5% fee paid to the Managing General Partner at the acquisition
     of the Aircraft. Totals do not include aircraft which have been sold.

(2)  As of December 31, 1998.

(3)  Estimated market values for the Aircraft are based upon annual independent
     appraisals, which are subject to a variety of assumptions. Additionally,
     there can be no assurance that the Partnership would receive an amount
     equal to the market value shown above upon the sale of any of the Aircraft.

(4)  Lease expiration dates do not include renewal options.

(5)  Data as of February 5, 1999.

(6)  The Partnership's two B-727-200 aircraft were leased to TWA on a
     month-to-month basis until the third quarter of 1998. In September 1998,
     the General Partners negotiated new lease agreements with Sun Pacific
     International Inc., which leases are scheduled to commence pending
     completion of required maintenance on the aircraft. See Item 7 below for a
     discussion of the Sun Pacific lease agreements.
</FN>
</TABLE>

Aging Aircraft Maintenance - The Federal Aviation Administration (the "FAA"),
acting on recommendations from industry trade groups, adopted a series of
Airworthiness Directives ("AD's") for certain Boeing and McDonnell Douglas
aircraft models. AD's are mandates requiring the airline to perform a specific
maintenance task within a specified period of time. The FAA imposes strict
requirements governing aircraft inspection and certification, maintenance,
equipment requirements, corrosion control, noise levels and general operating
and flight rules. In addition to mandating more intensive inspections of certain
structural components, including the fuselage, wing and tail sections, certain
of these AD's mandate that structural modifications to certain aircraft be
completed within specified periods, generally not less than 48 months from the
effective date of the relevant AD. Aircraft are generally subject to these
structural modification requirements based on flight cycle, flight hour and
chronological age thresholds.
<PAGE>
4

Two of the Partnership's six Aircraft are subject to AD's mandating structural
modification, specifically the two B-737 aircraft leased to Eastwind. AD's
presently applicable to the Boeing aircraft owned by the Partnership require
extensive repetitive inspections of such aircraft. There can be no assurance
that such inspections will not lead to mandatory structural modifications
similar to those noted above.

The Partnership's existing leases require the lessees to maintain the
Partnership's aircraft in accordance with FAA approved maintenance programs
during the lease term. At the end of the leases, each lessee is required to
return the aircraft in airworthy condition, including compliance with all AD's
for which action is mandated by the FAA during the lease term. Thus, certain of
the modifications required by the new AD's may not be implemented by the
Partnership's lessees prior to the expiration of the current leases since, in
many cases, the relevant AD will not require action before the expiration of the
lease term.

In negotiating future leases or in selling aircraft now owned by the
Partnership, the Partnership may be required to bear some or all of the costs of
compliance with future AD's or AD's that have been issued but which did not
mandate action during the previous lessee's lease term or in respect of which
the previous lessee failed to comply. The aggregate effect on the Partnership of
compliance with these standards is not determinable at this time and will depend
upon a variety of factors, including, but not limited to, the state of the
commercial aircraft market, the extent of the AD, the availability of capable
repair facilities and the effect, if any, that such compliance may have on the
service lives of the affected aircraft. As described above, the cost to the
Partnership of such compliance may be reduced to the extent that current or
future lessees of the Partnership's aircraft effect such modifications under the
terms of the current or future operating leases.

Aircraft Noise - Beginning in 1985, the FAA and various airport industry task
forces released reports suggesting various alternatives for reducing the number
of Stage 2 aircraft operating in the United States, including a proposed
requirement to bring all aircraft operating in the United States into compliance
with Stage 3 requirements in the 1990s or shortly thereafter. The FAA has
categorized aircraft types according to engine noise decibel levels. Stage 1
aircraft, which have the highest noise level, are no longer allowed to operate
from civil airports in the United States. Stage 2 aircraft meet current FAA
requirements. Stage 3 aircraft are the most quiet and will be the future
standard of all aircraft.

Effective November 6, 1990, Congress passed the Airport Noise and Capacity Act
of 1990 (the "Act") which required the development of a National Noise Policy.
On September 25, 1991, final regulations (the "Regulations") were announced and
became effective immediately. The Regulations provide, among other things,
phase-out and non-addition rules under which the number of Stage 2 aircraft
operated by domestic carriers were limited to 75% of 1990 base levels by the end
of 1994, 50% of 1990 base levels by the end of 1996, with further reductions to
25% of 1990 base levels by the end of 1998, and ultimately to 0% by December 31,
1999.

Several modification programs to hushkit or re-engine an aircraft to meet Stage
3 requirements have been announced, including programs for the B-727 and the
B-737 series. Hushkitting is a procedure for retrofitting existing engines to
comply with Stage 3 requirements. Re-engining is the replacement of existing
engines with technologically-advanced engines complying with Stage 3
requirements. The decision whether to hushkit or re-engine an aircraft will
depend upon a variety of factors, including, without limitation, the
differential effects of the two approaches on the operating costs of the
aircraft, the relative costs and feasibility of the two approaches and the
General Partners' assessment of the remaining useful life and fair market value
of the aircraft. Where available, hushkits currently cost up to $3.0 million per
aircraft while the costs of re-engining programs are significantly higher. No
assurances are possible in respect to the actual cost which the Partnership
would be required to pay in order to effect a hushkit or re-engining
modification as now available or as may be developed in the future.

Only two of the aircraft owned by the Partnership are Stage 3, the remainder are
Stage 2 aircraft. The General Partners are currently negotiating an extension of
the lease with Delta, which requires the hushkitting of the aircraft. Sun
Pacific, under terms of the leases, is required to hushkit its two aircraft
prior to December 31, 1999. One of the aircraft leased to Eastwind will not be
hushkitted prior to the expiration of the lease. The General Partners will
attempt to release this aircraft to an operator who will hushkit it, or they
will sell the aircraft.
<PAGE>
5

In addition to FAA activity in noise abatement, other countries have adopted or
are considering adopting noise compliance standards which would have a similar
effect of reducing the ability of an airline to operate Stage 2 aircraft in such
jurisdictions. In 1989, the European Economic Community ("EEC") adopted a
non-addition rule which directed each member country to pass the necessary
legislation to prohibit airlines from adding Stage 2 aircraft to their fleets
after November 1, 1990. The rule has specific exceptions for leased aircraft and
does allow the continued use of Stage 2 aircraft which were in operation in EEC
before November 1, 1990. The Partnership does not currently have any aircraft on
lease to airlines outside the United States. EEC regulations currently proposed
would require aircraft hushkitted to comply with Stage 3 requirements to
register prior to April 1999.

Competition
-----------
The aircraft leasing industry is competitive and the success of any lessor is
largely dependent upon the nature of the aircraft within its portfolio. The
Partnership competes with aircraft manufacturers, distributors, airlines,
leasing companies, financial institutions and other parties engaged in leasing,
managing, and marketing aircraft. Such competitors may lease or sell aircraft at
lower rates or prices than the Partnership and provide benefits, such as direct
maintenance crews, and support services which the Partnership cannot provide.
Competition may include certain affiliates of the General Partners.

Since the Partnership's aircraft are subject to operating leases, the
Partnership will be required to re-lease or sell such aircraft after the
expiration of the current lease terms. The General Partners' ability to renew
leases or to sell the aircraft owned by the Partnership is dependent upon, among
other factors: (a) general economic conditions and economic conditions affecting
the airline industry in particular; (b) the current operating profile of the
aircraft, encompassing the age of the aircraft and the number of hours and
cycles flown and compliance with all issued AD's as well as the general
maintenance conditions of the aircraft; (c) the current fleet plans of the major
end-users of the aircraft type; (d) any costs required to refurbish aircraft and
to reconfigure aircraft to comply with all issued AD's and to conform with
similar aircraft within a potential lessee's fleet; (e) any cost required to
conform the aircraft to future Stage 3 noise restrictions; (f) the availability
to the lessee or potential lessee of other similar aircraft from the
Partnership's competition; and (g) the ability of the Managing General Partner
to effectively market the aircraft. It is possible that any future lease
renewals might be at lower lease rates than the Partnership currently receives,
adversely impacting revenue.

Employees
---------
The Partnership has no employees. The officers, directors and employees of the
General Partners and their affiliates perform services on behalf of the
Partnership. The General Partners are entitled to certain fees and reimbursement
of certain out-of-pocket expenses incurred in connection with the performance of
these management services. Reference is made to Note 7 to the Financial
Statements of the Partnership's Annual Report to Unitholders for the year ended
December 31, 1998, for a discussion of the fees and reimbursable expenses paid
to the General Partners and their affiliates.


Item 2. Properties

Incorporated by reference to the Message to Investors section and Note 4 to the
Financial Statements of the Partnership's Annual Report to Unitholders for the
year ended December 31, 1998.


Item 3. Legal Proceedings

There are no material pending legal proceedings to which the General Partners or
the Partnership is a party or to which its assets are subject.


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

No matter was submitted to a vote of security holders, through the solicitation
of proxies or otherwise, during the fourth quarter of 1998.
<PAGE>
6

                                     PART II

Item 5. Market for the Partnership's Limited Partnership
        Interests and Related Security Holders Matters

The Units represent the economic rights attributable to limited partnership
interests in the Partnership.

There is no established public trading market for the purchase and sale of
Units. As of December 31, 1998, the number of Unitholders was 6,847.

Per Unit cash distributions paid to the Limited Partners for the two years ended
December 31, 1998 are presented in the table below.

<TABLE>
<CAPTION>
                    First     Second       Third     Fourth
                  Quarter    Quarter     Quarter    Quarter       Total
                  -------    -------     -------    -------       -----

         <S>      <C>        <C>         <C>        <C>         <C>    
         1997     $  .244    $  .169     $  .275    $  .290     $  .978
         1998     $  .212    $  .222     $  .144    $  .151     $  .729
</TABLE>

Future cash distributions will be determined on a quarterly basis after an
evaluation of the Partnership's current and expected financial position.


Item 6. Selected Financial Data

<TABLE>
<CAPTION>
For the years ended December 31,          1998          1997          1996          1995          1994
------------------------------------------------------------------------------------------------------
<S>                                <C>           <C>           <C>           <C>           <C>        
Rental Revenues                    $ 4,813,390   $ 5,037,980   $ 5,248,593   $ 4,837,439   $ 5,067,500
Total Expenses                       4,473,009     4,117,718     4,884,852     5,669,154     5,977,244
Net Income (Loss)                      444,902     1,149,074       687,834      (170,290)     (783,993)
Net Income (Loss) per
  Limited Partnership Unit(1)              .09           .23           .14         (0.03)        (0.16)
Total Assets                         7,989,525    11,507,572    15,107,551    18,936,402    23,457,496
Partners' Capital                    6,466,304     9,625,851    13,316,748    17,492,977    21,939,577
Net Cash Provided by
  Operating Activities               4,012,891     5,212,862     4,150,326     4,282,201     6,301,101
Cash Distributions per Unit(1)(2)          .73           .98           .98           .87          1.00
------------------------------------------------------------------------------------------------------
<FN>

(1)  4,895,005 units outstanding
(2)  Distribution amounts are reflected in the year for which they are declared.
     The Partnership's fourth quarter cash distribution is usually paid in late
     January or early February of the following year.
</FN>
</TABLE>


Item 7. Management's Discussion and Analysis of Financial
        Conditions and Results of Operations

Liquidity and Capital Resources
As of December 31, 1998, four of the Partnership's six aircraft were on-lease.
Two aircraft were on-lease to Eastwind Airlines ("Eastwind"), one aircraft was
on-lease to Delta Air Lines, Inc. ("Delta") and one aircraft was on-lease to
Continental Airlines ("Continental"). The remaining two aircraft were leased to
TWA on a month-to-month basis until the third quarter of 1998. The General
Partners have negotiated new lease agreements with Sun Pacific International,
Inc. ("Sun Pacific"), which leases are currently pending completion of required
maintenance on the aircraft, as discussed below.
<PAGE>
7

The Partnership's two 737-200 non-advanced aircraft are currently on-lease to
Eastwind. Under the terms of the lease agreements, which expire on November 30,
1999, Eastwind is required to pay the Partnership a monthly lease rate of
$35,000 per aircraft. In addition, the airline is required to pay the
Partnership an airframe maintenance charge based on usage. Eastwind is
delinquent on rental payments and maintenance reserves totaling $583,453 and has
contacted the General Partners to renegotiate the terms of its lease. In light
of this development, the Partnership established an allowance of $533,453 at
December 31, 1998 against this receivable. The Partnership has security deposits
in the amount of $50,000 from Eastwind. The General Partners will aggressively
pursue all remedies available to the Partnership with respect to the collection
of these receivables.

The lease with Delta for the Partnership's 737-200 advanced aircraft expires in
September 1999. In accordance with the terms of the lease agreement, Delta pays
the Partnership a monthly lease rate of $80,000.

Continental makes monthly lease payments to the Partnership of $180,000. The
lease with Continental was originally scheduled to expire in March 1998.
Continental extended its lease through March 1999, and in October 1998, it
exercised its second option to renew this lease through March 2000, with the
remaining terms of the lease unchanged.

The Partnership's two remaining 727-200 non-advanced aircraft were leased on a
month-to-month basis by TWA at a monthly lease rate of $32,500. TWA terminated
its leases on these aircraft and returned one plane in July 1998 and another in
September 1998. In accordance with the lease agreement, TWA was to have
performed certain required maintenance prior to returning the aircraft. In lieu
of having TWA perform this maintenance, the Partnership agreed to receive
payments of $360,656 and $360,792 for each respective aircraft from TWA, plus a
commitment from TWA for up to an additional $200,000 per aircraft, if supported
by legitimate maintenance costs.

In September 1998, the Partnership entered into two lease agreements with Sun
Pacific for the two 727-200 non-advanced aircraft which were previously leased
to TWA. Pursuant to the terms of the lease agreements, Sun Pacific is required
to pay the Partnership a monthly lease rate of $64,042 per aircraft commencing
upon the completion of certain required maintenance on the aircraft. In
addition, the airline is required to pay the Partnership a maintenance charge
based on usage. The aircraft were delivered to Sun Pacific with an assignment of
the above described maintenance payments of $360,656 and $360,792 received from
TWA. The Partnership agreed to assign these funds in order for Sun Pacific to
perform required maintenance on the aircraft. As of December 31, 1998, the
maintenance on the aircraft had not been completed, and no funds had been
collected pursuant to the terms of the leases.

At December 31, 1998, the Partnership had unrestricted cash and cash equivalents
of $1,853,981, compared to $2,131,335 at December 31, 1997. The decrease is
primarily attributed to Eastwind being delinquent on rental payments and
maintenance reserves.

At December 31, 1998, the Partnership had a rent receivable balance (net of
allowance for doubtful accounts) totaling $50,000, compared to $79,053 at
December 31, 1997. The 1998 balance represents amounts owed by Eastwind in
excess of the $533,453 allowance established by the Partnership, as discussed
above.

Accounts payable and accrued expenses totaled $635,127 at December 31, 1998 as
compared to $307,831 at December 31, 1997. The increase is primarily
attributable to deferred management fees.

During the year ended December 31, 1998, the Partnership paid distributions to
the Unitholders for the period from October 1, 1997 to December 31, 1998 and for
the first three quarters of 1998, in the amounts of $1,419,551 and $2,827,791,
respectively, which represent approximately $.29 and approximately $.58 per
Unit, respectively. At December 31, 1998, the Partnership had a distribution
payable to Unitholders of $740,613 or approximately $.15 per Unit. This amount
reflects the 1998 fourth quarter cash distribution paid on March 4, 1999, which
was primarily funded from cash flow from operations.

Future cash distributions will be determined on a quarterly basis after an
evaluation of the Partnership's current and expected financial position.
<PAGE>
8

Market Risk
Interest rate risk comprises the Partnership's principal market risk exposure.
The Partnership has no long-term debt and its aircraft are unencumbered by debt.
Accordingly, the Partnership's interest risk exposure is primarily limited to
interest earned on the Partnership's cash and cash equivalents, which are
invested at short-term rates. Such risk is not considered material to the
Partnership's operations.

Year 2000 Initiatives
The Year 2000 compliance issue concerns the ability of computerized information
systems to accurately calculate, store or use a date after 1999. This could
result in computer system failures or miscalculations causing disruptions of
operations. The Year 2000 issue affects almost all companies and organizations.

As the owner and lessor of commercial aircraft, the Partnership's most
significant Year 2000 issues relate to systems concerns with respect to the
airworthiness of the aircraft. It is the responsibility of the lessees to comply
with any Airworthiness Directives or other manufacturer recommended maintenance
necessary to meet Year 2000 requirements, and the costs of such maintenance, if
any, are to be borne by the lessee. Non-compliance by the lessee could impact
its ability to operate the aircraft, and could affect its ability to meet the
terms of its lease. The Partnership's lessees also face the potential risk of
non-compliance by the air traffic control systems in the areas in which the
aircraft operate. A disruption in any of the air traffic control systems could
cause disruption to the lessee's operations, which may adversely affect their
ability to generate revenue and meet the terms of their leases. The Partnership
is unable to assess the likelihood or the potential cost to the Partnership of
such disruption.

Other potential Year 2000 issues relate primarily to outside vendors which
provide the Partnership's administrative services including accounting, tax
preparation and transfer agent services. Such services are reliant on computer
systems, software products and equipment which may or may not be Year 2000
compliant. It is anticipated that the cost of vendor compliance with Year 2000
problems will be borne primarily by vendors. Although it is not possible at
present to give an estimate of the cost of this work to the Partnership, the
General Partner does not expect such costs to have a material adverse impact on
the Partnership's long term results of operations.

Results of Operations
Substantially all of the Partnership's revenue was generated from the leasing of
the Partnership's Aircraft to commercial airlines under triple net operating
leases. The balance of the Partnership's revenue during 1998 consisted of
interest and other income.

1998 compared to 1997
---------------------
For the year ended December 31, 1998, the Partnership generated net income in
the amount of $444,902, compared to net income of $1,149,074 in fiscal 1997. The
decrease in net income is primarily attributable to the establishment of an
allowance for doubtful accounts on Eastwind's receivable balance, and a decrease
in rental income as a result of the Partnership's two 727-200 aircraft being off
lease for several months during 1998. Such amounts were partially offset by a
decrease in operating expenses during 1998.

Rental income for the year ended December 31, 1998 was $4,813,390, compared to
$5,037,980 in fiscal 1997. The decrease in rental income is primarily a result
of the Partnership's two 727-200 aircraft being off lease following the
expiration of the leases with TWA in July and September. This decrease was
partially offset by an increase in rental income from the two aircraft leased by
Eastwind which were not operated on a daily basis for the first two months of
1997 because of maintenance-related issues, including the installation of a
hushkit on one aircraft.

Interest income for the year ended December 31, 1998 totaled $104,393, compared
to $129,090 for the corresponding period in 1997. The decrease is primarily due
to a decrease in the Partnership's invested cash balance during the 1998 period.

Other income totaled $128 for the year ended December 31, 1998, compared to
$99,722 for the year ended December 31, 1997. The decrease primarily represents
payment received from USAirways, Inc. ("USAir") during 1997 for the settlement
and release of claims relating to the lease and maintenance of the Boeing
737-200 aircraft, previously on lease with USAir.

Management fees totaled $387,675 for the year ended December 31, 1998 compared
with $447,868 for the year ended December 31, 1997. The decrease primarily
reflects lower management fees related to the aircraft currently on-lease to
Eastwind.
<PAGE>
9

General and Administrative expenses totaled $334,335 for the year ended December
31, 1998 compared with $230,295 in fiscal 1997. The increase is primarily due to
consulting and other professional fees related to the re-leasing of the aircraft
formerly leased to TWA, and to a lesser extent, higher partnership
administrative servicing costs.

Operating expenses for the year ended December 31, 1998 totaled $5,906, compared
to $227,905 for the 1997 period. The 1997 balance is primarily attributable to
non-recurring operating expenses associated with repair and maintenance work
completed on the two aircraft on-lease to Eastwind.

Bad debt expense for the year ended December 31, 1998 totaled $533,453, which
amount was used to establish an allowance for delinquent rental payments and
maintenance reserves due under Eastwind's leases.

1997 compared to 1996
---------------------
For the twelve months ended December 31, 1997, the Partnership generated net
income in the amount of $1,149,074, compared to income of $687,834 for the
corresponding period in 1996. The increase in net income is primarily
attributable to a decrease in depreciation expense, which was partially offset
by a decrease in rental income and increases in all other expenses.
Additionally, net income for the 1996 period includes a $130,000 gain on the
August 1996 sale of the 737-200 aircraft formerly on lease to Eastwind.

Rental income for the twelve months ended December 31, 1997 was $5,037,980,
compared to $5,248,593 for the corresponding period in 1996. The decrease in
rental income is primarily due to the fact that the two aircraft leased by
Eastwind were not being operated on a daily basis for the first two months of
1997 because of maintenance-related issues, including the installation of a
hushkit on one aircraft.

Other income totaled $99,722 for the twelve months ended December 31, 1997,
compared to $43,353 for the corresponding period in 1996. The increase primarily
represents payment received from USAirways, Inc. ("USAir") for the settlement
and release of claims relating to the lease and maintenance of the Boeing
737-200 aircraft, previously on lease with USAir. The balance of $43,353 at
December 31, 1996 reflects a payment received by the Partnership as settlement
of an administrative claim by the Partnership against Pan American World
Airways, Inc. ("Pan Am") which was filed in Bankruptcy Court in 1992. The
Partnership was seeking to recover certain rent and maintenance costs associated
with Pan Am's failure to comply with the return provisions of its lease.

Interest income for the twelve months ended December 31, 1997 totaled $129,090,
compared to $150,740 for the corresponding period in 1996. The decrease is
primarily due to a decrease in the Partnership's invested cash balance during
the 1997 period.

Depreciation expense for the twelve months ended December 31, 1997 totaled
$3,211,650, compared to $4,076,214 for the corresponding period in 1996. The
decrease is primarily attributable to the full depreciation of Eastwind's
aircraft N220US and N221US as of December 31, 1996.

General and Administrative expenses at December 31, 1997 totaled $230,295 as
compared with $192,656 at December 31, 1996. During the 1997 period, certain
expenses incurred by an unaffiliated third party service provider in servicing
the Partnership, which were voluntarily absorbed by affiliates of Jet Aircraft
Leasing Inc. in prior periods, were reimbursable to Jet Aircraft Leasing Inc.
and its affiliates.

Operating expenses for the twelve months ended December 31, 1997 totaled
$227,905, compared to $194,231 for the corresponding period in 1996. The
increase is primarily attributable to maintenance and repairs on the aircraft
leased by Eastwind.


Item 8. Financial Statements and Supplementary Data

Incorporated by reference to the Partnership's Annual Report to Unitholders for
the year ended December 31, 1998.
<PAGE>
10

Item 9. Changes in and Disagreements with Accountants
        on Accounting and Financial Disclosure

None.


                                    PART III

Item 10. Directors and Executive Officers of the Partnership

The Partnership has no officers or directors. The General Partners jointly
manage and control the affairs of the Partnership and have general
responsibility and authority in all matters affecting its business. Information
concerning the directors and executive officers of the General Partners are as
follows:

      Jet Aircraft Leasing Inc.
      -------------------------

      Name                       Office
      ----                       ------
      Rocco F. Andriola          Director
      Michael T. Marron          Director, President and Chief Financial Officer
      William T. McDermott       Vice President

Certain officers and directors of Jet Aircraft Leasing, Inc. are now serving (or
in the past have served) as officers or directors of entities which act as
general partners of a number of limited partnerships which have sought
protection under the provisions of the Federal Bankruptcy Code. Those
partnerships sought the protection of the bankruptcy laws to protect the
partnerships' assets from loss through foreclosure.

Rocco F. Andriola, 40, is a Managing Director of Lehman Brothers in its
Diversified Asset Group and has held such position since October 1996. Since
joining Lehman in 1986, Mr. Andriola has been involved in a wide range of
restructuring and asset management activities involving real estate and other
direct investment transactions. From June 1991 through September 1996, Mr.
Andriola held the position of Senior Vice President in Lehman's Diversified
Asset Group. From June 1989 through May 1991, Mr. Andriola held the position of
First Vice President in Lehman's Capital Preservation and Restructuring Group.
From 1986 to 1989, Mr. Andriola served as a Vice President in the Corporate
Transactions Group of Shearson Lehman Brothers' office of the general counsel.
Prior to joining Lehman, Mr. Andriola practiced corporate and securities law at
Donovan Leisure Newton & Irvine in New York. Mr. Andriola received a B.A. from
Fordham University, a J.D. from New York University School of Law, and an LL.M
in Corporate Law from New York University's Graduate School of Law.

Michael T. Marron, 35, is a Vice President of Lehman Brothers and has been a
member of the Diversified Asset Group since 1990 where he has actively managed
and restructured a diverse portfolio of syndicated limited partnerships. Prior
to joining Lehman Brothers, Mr. Marron was associated with Peat Marwick Mitchell
& Co. serving in both its audit and tax divisions from 1985 to 1989. Mr. Marron
received his B.S. degree from the State University of New York at Albany and an
MBA from Columbia University.

William T. McDermott, 35, is a Vice President of Lehman Brothers and has been a
member of the Diversified Asset Group since 1998. Mr. McDermott joined Lehman
Brothers in 1993 and held various positions within the firm before joining the
Diversified Asset Group. Prior to joining Lehman Brothers, Mr. McDermott was a
financial analyst with Cantor Fitzgerald Inc. from 1991 - 1993 and was
associated with Arthur Andersen & Co. serving in both its audit and bankruptcy
consulting divisions from 1985 to 1991. Mr. McDermott received his B.B.A. degree
from the University of Notre Dame and is a Certified Public Accountant.

      CIS Aircraft Partners, Inc.
      ---------------------------

      Name                       Office
      ----                       ------
      Thomas J. Prinzing         Director and President
      Robin A. Konicek           Vice President
<PAGE>
11

As reported on the Partnership's Report on Form 8-K, dated February 28, 1989, on
Friday, January 13, 1989, Continental Information Systems Corporation, and
certain of its subsidiaries, including CIS Corporation, filed voluntary
petitions for reorganization under Chapter 11 of the Federal Bankruptcy Code. As
described below, various directors and executive officers of CAP hold similar
positions for Continental Information Systems Corporation, CIS Corporation and
such subsidiaries.

On November 29, 1994, the Bankruptcy Court for the Southern District of New York
confirmed the Trustee's Proposed Joint Plan of Reorganization. The approved Plan
became effective on December 21, 1994. As a result of the reorganization, the
Directors and Officers of CAP resigned from and took on various directorships
for Continental Information Systems Corporation, CIS Corporation, and their
subsidiaries.

Thomas J. Prinzing, 53, is President of CIS Aircraft Partners, Inc. since 1991.
Mr. Prinzing, a Certified Public Accountant, received a Bachelor of Commerce
degree from the University of Windsor.

Robin A. Konicek, 42, is a Vice President of CIS Aircraft Partners, Inc. and is
responsible for domestic and international aircraft marketing. She has been
active in the financing, trading and management of aircraft since 1982. Prior to
joining CIS in 1986, Ms. Konicek was a Vice President of Crocker Bank Airlines
and Aerospace Group, with major responsibility for developing the U.S. market.
She holds an A.B. from Stanford University and an M.B.A. from the University of
California, Los Angeles.


Item 11. Executive Compensation

No compensation was paid by the Partnership to the officers and directors of the
General Partners. See Item 13 below for a description of the compensation and
fees paid to the General Partners and their affiliates by the Partnership.


Item 12. Security Ownership of Certain Beneficial Owners and Management

(a)  Security ownership of certain beneficial owners  As of the date hereof, no
     person is known by the Partnership to be the beneficial owner of more than
     five percent of the Units of the Partnership.

(b)  Security ownership of management  The Partnership has no directors or
     officers, and neither of the General Partners of the Partnership owns any
     Units. The Assignor Limited Partners for the Partnership, CIS Assignor
     L.P.A., Inc. (an affiliate of CIS), owns 5 Units.

     None of the directors or officers of the General Partners owned any Units
     as of December 31, 1998.

(c)  Changes in control  Other than as described herein, the Partnership knows
     of no arrangements, the operation of the terms of which may at a subsequent
     date result in a change in control of the Partnership.


Item 13. Certain Relationships and Related Transactions.

The General Partners and their affiliates received or will receive certain types
of compensation, fees, or other distributions in connection with the operation
of the Partnership. The fees and compensation were not determined by, and may
not necessarily reflect, arm's length negotiations. None of the officers and
directors of the General Partners received any compensation from the
Partnership. During 1998 and 1997, certain expenses incurred by an unaffiliated
third party service provider in servicing the Partnership, which were
voluntarily absorbed by affiliates of Jet Aircraft Leasing, Inc. in prior
periods, were reimburseable to Jet Aircraft Leasing Inc. and its affiliates. For
additional information on fees paid to the General Partners and affiliates,
refer to Note 7 of the Notes to the Financial Statements of the Partnership's
Annual Report to Unitholders for the year ended December 31, 1998.
<PAGE>
12

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a)  1.  Financial Statements:

                                                                           Page
                                                                          Number
                                                                          ------

         Balance Sheets - December 31, 1998 and 1997........................(1)

         Statements of Partners' Capital (Deficit) -
         For the years ended December 31, 1998, 1997 and 1996...............(1)

         Statements of Operations -
         For the years ended December 31, 1998, 1997and 1996................(1)

         Statements of Cash Flows -
         For the years ended December 31, 1998, 1997 and 1996...............(1)

         Notes to the Financial Statements..................................(1)

         Report of Independent Public Accountants...........................(1)

         (1)  Incorporated by reference to the Partnership's Annual Report to
              Unitholders for the year ended December 31, 1998.

     2.  Financial Statement Schedules
         Schedule II Valuation and Qualifying Accounts

     3.  Exhibits

         (3)  Articles of Incorporation and bylaws (Incorporated by reference
              to the Partnership's Prospectus filed with the Commission on
              April 17, 1987.)

         (4)  Depositary Agreement (Incorporated by reference to Exhibit 4.5 to
              the Partnership's Registration Statement on Form S-1 filed with
              the Commission on April 17, 1987.)

         (10) Escrow Agreement (Incorporated by reference to Exhibit 10.12 to
              the Partnership's Registration Statement on Form S-1 filed with
              the Commission on April 17, 1987.)

         (13) Annual Report to Unitholders for the year ended December 31, 1998.

         (27) Financial Data Schedule

(b)  The Partnership filed no current reports on Form 8-K during the last
     quarter of the period covered by this Report.
<PAGE>
13

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Partnership has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.



                             JETSTREAM, L.P.

                             BY: Jet Aircraft Leasing Inc.
                                 Administrative General Partner


Date:  March 29, 1999            BY:    /s/Michael T. Marron
                                        --------------------
                                 Name:  Michael T. Marron
                                 Title: Director, President and
                                        Chief Financial Officer



                             BY: CIS Aircraft Partners, Inc.
                                 Managing General Partner


Date:  March 29, 1999            BY:    /s/Thomas J. Prinzing
                                        ---------------------
                                 Name:  Thomas J. Prinzing
                                 Title: Director and President
<PAGE>
14

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.



                         BY: CIS Aircraft Partners, Inc.
                             A General Partner


Date:  March 29, 1999        BY:    /s/Thomas J. Prinzing
                                    ---------------------
                             Name:  Thomas J. Prinzing
                             Title: Director and President


Date:  March 29, 1999        BY:    /s/Robin A. Konicek
                                    -------------------
                             Name:  Robin A. Konicek
                             Title: Vice President
<PAGE>
15

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.



                             JET AIRCRAFT LEASING INC.
                             A General Partner


Date:  March 29, 1999        BY:    /s/Rocco F. Andriola
                                    --------------------
                             Name:  Rocco F. Andriola
                             Title: Director


Date:  March 29, 1999        BY:    /s/Michael T. Marron
                                    --------------------
                             Name:  Michael T. Marron
                             Title: Director, President and
                                    Chief Financial Officer


Date:  March 29, 1999        BY:    /s/William T. McDermott
                                    -----------------------
                             Name:  William T. McDermott
                             Title: Vice President