<PAGE>   1


                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-Q
                       Quarterly Report Under Section 13
                          or 15 (d) of the Securities
                              Exchange Act of 1934
                       ----------------------------------


For the Quarter Ended
    March 31, 1997                              Commission File Number  0-18650
---------------------                           -------------------------------


                   DATRONIC EQUIPMENT INCOME FUND XVIII, L.P.
                   ------------------------------------------
             (Exact name of Registrant as specified in its charter)


    Delaware                                                36-3639399
----------------                                    ---------------------------
State or other                                      IRS Employer Identification
jurisdiction of                                     Number                     
incorporation or
organization

1300 E. Woodfield Road, Suite 312                   Schaumburg, Illinois 60173
----------------------------------                  ---------------------------
 Address of principal                                     City, State, Zip Code
 executive offices                         

Registrant's telephone number:                              (847) 240-6200
                                                    ---------------------------




     Indicate by check mark whether the Registrant (1) has filed all reports
     required to be filed by Section 13 or 15(d) of the Securities Exchange Act
     of 1934 during the preceding 12 months (or for such shorter period that
     the Registrant was required to file such reports), and (2) has been
     subject to such filing requirements for the past 90 days.



                          (1)  Yes  x   No
                                   ---     ---  
                          (2)  Yes  x   No
                                   ---     ---


<PAGE>   2

                  DATRONIC EQUIPMENT INCOME FUND XVIII, L.P.

                                   FORM 10-Q

                      FOR THE QUARTER ENDED MARCH 31, 1997

                         PART I - FINANCIAL INFORMATION

<TABLE>
<S>                                                                   <C>
Item 1.


  Index to Financial Statements

    Balance Sheets

      March 31, 1997 (unaudited)                                      3

      December 31, 1996                                               4

    Statements of Revenue and Expenses (unaudited)

      For the three months ended March 31, 1997                       5
                                                             
      For the three months ended March 31, 1996                       6
                                                             
    Statements of Changes in Partners' Equity

      For the three months ended March 31, 1997                       7
         (unaudited)

    Statements of Cash Flows (unaudited)

      For the three months ended March 31, 1997                       8
                                                        
      For the three months ended March 31, 1996                       9

    Notes to Financial Statements (unaudited)                        10

Item 2.


  Management's Discussion and Analysis of
    Financial Condition and Results of Operations               11 - 13


                          PART II - OTHER INFORMATION

Items 1-6.                                                           14


</TABLE>



                                      2

<PAGE>   3
                   DATRONIC EQUIPMENT INCOME FUND XVIII, L.P.


                                 BALANCE SHEETS

                                 March 31, 1997
                                  (Unaudited)



<TABLE>
<CAPTION>
                                       Liquidating  Continuing
                                         Limited     Limited
                                        Partners     Partners      Total
                                       -----------  ----------  -----------
     <S>                               <C>          <C>         <C>
     ASSETS
     ------

     Cash and cash equivalents          $2,323,947  $4,446,107  $ 6,770,054
     Net investment in direct
       financing leases                      2,839   2,401,227    2,404,066
     Diverted and other assets, net        312,149   1,091,397    1,403,546
     Datronic assets, net                        -           -            -
                                       -----------  ----------  -----------

                                        $2,638,935  $7,938,731  $10,577,666
                                       ===========  ==========  ===========


     LIABILITIES AND PARTNERS' EQUITY
     --------------------------------

     Accounts payable and
       accrued expenses                 $   16,088  $   72,672  $    88,760
     Lessee rental deposits                 41,497     184,186      225,683
                                       -----------  ----------  -----------

     Total liabilities                      57,585     256,858      314,443

     Total partners' equity              2,581,350   7,681,873   10,263,223
                                       -----------  ----------  -----------

                                        $2,638,935  $7,938,731  $10,577,666
                                       ===========  ==========  ===========
</TABLE>












                See accompanying notes to financial statements.





                                      3

<PAGE>   4


                   DATRONIC EQUIPMENT INCOME FUND XVIII, L.P.

                                 BALANCE SHEETS

                               December 31, 1996



<TABLE>
<CAPTION>
                                       Liquidating  Continuing
                                         Limited     Limited
                                        Partners     Partners      Total
                                       -----------  ----------  -----------
     <S>                               <C>          <C>         <C>
     ASSETS
     ------

     Cash and cash equivalents          $2,357,430  $3,986,042  $ 6,343,472
     Due from management company            12,674      47,002       59,676
     Net investment in direct
       financing leases                      4,491   3,011,385    3,015,876
     Diverted and other assets, net        312,149   1,091,397    1,403,546
     Datronic assets, net                        -           -            -
                                       -----------  ----------  -----------

                                        $2,686,744  $8,135,826  $10,822,570
                                       ===========  ==========  ===========


     LIABILITIES AND PARTNERS' EQUITY
     --------------------------------

     Accounts payable and
       accrued expenses                 $   57,989  $  233,827  $   291,816
     Lessee rental deposits                 45,101     200,059      245,160
                                       -----------  ----------  -----------

     Total liabilities                     103,090     433,886      536,976

     Total partners' equity              2,583,654   7,701,940   10,285,594
                                       -----------  ----------  -----------

                                        $2,686,744  $8,135,826  $10,822,570
                                       ===========  ==========  ===========
</TABLE>














                See accompanying notes to financial statements.




                                      4

<PAGE>   5


                   DATRONIC EQUIPMENT INCOME FUND XVIII, L.P.

                       STATEMENTS OF REVENUE AND EXPENSES

                   For the three months ended March 31, 1997
                                  (Unaudited)



<TABLE>
<CAPTION>
                                      Liquidating  Continuing
                                        Limited     Limited
                                       Partners     Partners     Total
                                      -----------  ----------  ---------
       <S>                            <C>          <C>         <C>
       Revenue:
         Lease income                      $3,426    $105,741   $109,167
         Interest income                   13,710      61,193     74,903
                                      -----------  ----------  ---------

                                           17,136     166,934    184,070
                                      -----------  ----------  ---------

       Expenses:
         General Partner's       
           expense reimbursement           99,432     357,110    456,542
         Professional fees                 16,284      60,652     76,936
         Other operating expenses           4,366      16,125     20,491
         Credit for lease losses         (100,642)   (246,886)  (347,528)
                                      -----------  ----------  ---------

                                           19,440     187,001    206,441
                                      -----------  ----------  ---------


       Net loss                           $(2,304)   $(20,067)  $(22,371)
                                      ===========  ==========  =========


       Net loss - General Partner            $(23)      $(201)     $(224)
                                      ===========  ==========  =========


       Net loss - Limited Partners        $(2,281)   $(19,866)  $(22,147)
                                      ===========  ==========  =========

       Net loss per limited
         partnership unit                   $(.05)      $(.13)
                                            =====       =====

       Weighted average number
         of limited partnership units
         outstanding                       44,468     155,509
                                           ======     =======
</TABLE>










               See accompanying notes to financial statements.




                                      5

<PAGE>   6


                   DATRONIC EQUIPMENT INCOME FUND XVIII, L.P.

                       STATEMENTS OF REVENUE AND EXPENSES

                   For the three months ended March 31, 1996
                                  (Unaudited)


<TABLE>
<CAPTION>
                                      Liquidating  Continuing
                                        Limited     Limited
                                       Partners     Partners     Total
                                      -----------  ----------  ----------
       <S>                            <C>          <C>         <C>
       Revenue:
         Lease income                   $  15,695   $ 233,377   $ 249,072
         Interest income                   13,535      69,268      82,803
                                      -----------  ----------  ----------

                                           29,230     302,645     331,875
                                      -----------  ----------  ----------

       Expenses:
         Management fees-New Era           71,106     271,228     342,334
         General Partner's       
           expense reimbursement           57,996     202,777     260,773
         Professional fees                 25,424      90,432     115,856
         Other operating expenses           5,892      21,844      27,736
                                      -----------  ----------  ----------

                                          160,418     586,281     746,699
                                      -----------  ----------  ----------


       Net loss                         $(131,188)  $(283,636)  $(414,824)
                                      ===========  ==========  ==========


       Net loss - General Partner         $(1,312)    $(2,836)    $(4,148)
                                      ===========  ==========  ==========


       Net loss - Limited Partners      $(129,876)  $(280,800)  $(410,676)
                                      ===========  ==========  ==========

       Net loss per limited
         partnership unit                  $(2.92)     $(1.81)
                                           ======      ======

       Weighted average number
         of limited partnership units
         outstanding                       44,468     155,509
                                           ======     =======
</TABLE>












               See accompanying notes to financial statements.




                                      6

<PAGE>   7


                  DATRONIC EQUIPMENT INCOME FUND XVIII, L.P.

                   STATEMENT OF CHANGES IN PARTNERS' EQUITY
                                 (Unaudited)




<TABLE>
<CAPTION>
                                          Liquidating  Continuing
                               General      Limited     Limited       Total
                              Partner's    Partners'   Partners'    Partners'
                               Equity       Equity       Equity      Equity
                             -----------  -----------  ----------  -----------
 <S>                         <C>          <C>          <C>         <C>

 Balance, December 31, 1996    $(356,167)*  $2,640,683  $8,001,078  $10,285,594

   Net loss                         (224)       (2,281)    (19,866)     (22,371)
   Allocation of General
     Partner's Equity            356,391       (57,052)   (299,339)        -
                             -----------   -----------  ----------  -----------

 Balance, March 31, 1997       $       -    $2,581,350  $7,681,873  $10,263,223
                             ===========   ===========  ==========  ===========
</TABLE>



* Balance as previously reported was $0 due to allocation of $57,029 and
  $299,138 to Liquidating and Continuing Limited Partners' Equity, respectively.












                See accompanying notes to financial statements.




                                      7

<PAGE>   8

                   DATRONIC EQUIPMENT INCOME FUND XVIII, L.P.

                            STATEMENTS OF CASH FLOWS

                   For the three months ended March 31, 1997
                                  (Unaudited)


<TABLE>
<CAPTION>
                                        Liquidating  Continuing
                                          Limited     Limited
                                         Partners     Partners     Total
                                        -----------  ----------  ----------
    <S>                                 <C>          <C>         <C>

    Cash flows from operating
      activities:                      
      Net loss                           $   (2,304) $  (20,067) $  (22,371)
      Adjustments to reconcile net loss
        to net cash used in operating 
        activities:                   
        Credit for lease losses            (100,642)   (246,886)   (347,528)
        Changes in assets and         
          liabilities:           
          Accounts payable and   
            accrued expenses                (41,901)   (161,155)   (203,056)
          Lessee rental deposits             (3,604)    (15,873)    (19,477)
          Due to management      
            company                          12,674      47,002      59,676
                                        -----------  ----------  ----------

                                           (135,777)   (396,979)   (532,756)
                                        -----------  ----------  ----------

    Cash flows from investing
      activities:
      Principal collections on leases       102,294     857,044     959,338
                                        -----------  ----------  ----------

    Net increase (decrease) in cash
      and cash equivalents                  (33,483)    460,065     426,582

    Cash and cash equivalents:
      Beginning of year                   2,357,430   3,986,042   6,343,472
                                        -----------  ----------  ----------

      End of first quarter               $2,323,947  $4,446,107  $6,770,054
                                        ===========  ==========  ==========
</TABLE>




                See accompanying notes to financial statements.









                                      8

<PAGE>   9

                   DATRONIC EQUIPMENT INCOME FUND XVIII, L.P.

                            STATEMENTS OF CASH FLOWS

                   For the three months ended March 31, 1996
                                  (Unaudited)


<TABLE>
<CAPTION>
                                      Liquidating  Continuing
                                        Limited      Limited
                                       Partners     Partners       Total
                                      -----------  -----------  -----------
     <S>                              <C>          <C>          <C>

     Cash flows from operating
       activities:               
       Net loss                         $(131,188)   $(283,636)   $(414,824)
       Adjustments to reconcile  
         net loss to net cash used 
         in operating activities:  
         Changes in assets and     
           liabilities:             
           Accounts payable and     
             accrued expenses             (18,622)     (75,013)     (93,635)
           Lessee rental deposits          (2,411)      (7,121)      (9,532)
           Due to management        
             company                          105          341          446
                                      -----------  -----------  -----------

                                         (152,116)    (365,429)    (517,545)
                                      -----------  -----------  -----------

     Cash flows from investing
       activities:
       Principal collections
         on leases                        146,344    1,167,816    1,314,160
       Principal collections on
         installment contracts
         receivable                        32,814      114,732      147,546
                                      -----------  -----------  -----------

                                          179,158    1,282,548    1,461,706
                                      -----------  -----------  -----------

     Cash flows from financing
       activities:
       Distributions to Limited
         Partners                          -        (1,321,827)  (1,321,827)
       Distributions to General
         Partner                           -            (8,442)      (8,442)
                                      -----------  -----------  -----------

                                           -        (1,330,269)  (1,330,269)
                                      -----------  -----------  -----------

     Net increase (decrease) in cash
       and cash equivalents                27,042     (413,150)    (386,108)

     Cash and cash equivalents:
       Beginning of year                1,977,211    1,432,420    3,409,631
                                      -----------  -----------  -----------

       End of first quarter            $2,004,253   $1,019,270   $3,023,523
                                      ===========  ===========  ===========
</TABLE>






                See accompanying notes to financial statements.




                                      9

<PAGE>   10

                   DATRONIC EQUIPMENT INCOME FUND XVIII, L.P.

                         NOTES TO FINANCIAL STATEMENTS

                                 March 31, 1997
                                  (Unaudited)



NOTE 1 - ORGANIZATION:

Datronic Equipment Income Fund XVIII, L.P., a Delaware Limited Partnership (the
"Partnership"), was formed on April 12, 1989 for the purpose of acquiring and
leasing both high- and low-technology equipment.  Reference is made to Notes 3,
4, 5, and 6 to the Partnership's financial statements included in the 1996 Form
10-K for a discussion of the alleged diversion of Partnership assets in 1991
and 1992 and the subsequent litigation and settlement, change in general
partner, new classes of limited partners established and amendments to the
Partnership Agreement that occurred.

NOTE 2 - BASIS OF FINANCIAL STATEMENTS:

The accompanying financial statements should be read in conjunction with the
Partnership's financial statements included in the 1996 Form 10-K.  The
financial information furnished herein is unaudited but in the opinion of
Management includes all adjustments necessary (all of which are normal
recurring adjustments) for a fair presentation of financial condition and
results of operations. See Note 2 to the Partnership's financial statements
included in the 1996 Form 10-K.

NOTE 3 - LIMITED PARTNERSHIP DISTRIBUTIONS:

Distributions to Liquidating Limited Partners were suspended after payment of
the July 1, 1995 distribution.  Distributions to the Continuing Limited
Partners were suspended after payment of the April 1, 1996 distribution.












                                      10

<PAGE>   11

PART I

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

The following discussion and analysis of liquidity and capital resources covers
material changes in the Partnership's financial condition from December 31,
1996 through March 31, 1997.  The discussion and analysis of results of
operations is for the three month period ended March 31, 1997 as compared to
the corresponding period in 1996.

Financial Condition, Liquidity and Capital Resources

During the three months ended March 31, 1997, Partnership assets continued to
be converted to cash in order to, generally, pay Partnership operating
expenses.

Net investment in direct financing leases decreased approximately $612,000
during the three months ended March 31, 1997.  This decrease is primarily
attributable to principal collections of approximately $959,000, partially
offset by a credit for lease loss of approximately $348,000.

Accounts payable and accrued expenses decreased approximately $203,000 during
the three months ended March 31, 1997 primarily due to payment of accrued legal
fees and sales and use taxes.

Partners' equity decreased approximately $22,000 during the three months ended
March 31, 1997 due to a net loss of approximately $22,000.

During the three months ended March 31, 1997, the Partnership's operating
activities resulted in a use of approximately $533,000 of cash. This was due
principally to a net loss of approximately $22,000, decreases in accounts
payable and lessee rental deposits of approximately $223,000, and a non-cash
credit provision for lease losses of  approximately $348,000, partially offset
by a decrease in due from management company of approximately $60,000.  During
the period, cash flows from investing activities aggregated approximately
$959,000 relating to principal collections on leases.

The Partnership's sources of liquidity on both a long-term and short-term basis
are expected to come principally from cash-on-hand and cash receipts from
lessees under leases owned by the Partnership.  In addition, the Partnership's
sources of liquidity on a long-term basis are expected to include proceeds from
the sale of other assets of the Partnership including, without limitation,
Diverted and other assets and portions of the Partnership's lease portfolio
which may be sold in bulk.  Management believes that its sources of liquidity
in the short and long-term are sufficient to meet its operating cash
obligations and provide for the ongoing pursuit of litigation and an orderly
liquidation of the Partnership.  Distributions to the Liquidating Limited
Partners were suspended after the July 1, 1995 distribution and distributions
to the Continuing Limited Partners were 

                                      11

<PAGE>   12

suspended after the April 1, 1996 distribution.  It is unlikely that any        
additional distributions will be made until all remaining assets are liquidated
and the pending litigation is resolved.

The continued operation and eventual liquidation of the Partnership involves
numerous complex issues which have to be resolved.  These issues relate to the
timing and realizability of lease-related assets, Diverted and other assets,
Datronic assets, litigation and the liquidation of the other Datronic
Partnerships (see Notes 3, 5 and 9 to the Partnership's financial statements
included in the 1996 Form 10-K).  These issues make it difficult to predict the
time and costs necessary to operate and liquidate the Partnership in an orderly
manner.  As a result of these uncertainties, it is unlikely that any additional
distributions will be made until all remaining assets are liquidated and the
pending litigation is resolved, and the amount of future distributions, if any,
to the Limited Partners is likely to be significantly less than the amount of
partners' equity reflected in the March 31, 1997 Balance Sheets (see financial
statements included in Item 1).

Results of Operations

Lease income decreased approximately $140,000 for the three month period ended
March 31, 1997 as compared to the corresponding period in 1996 due to the
declining lease portfolio.

Interest income decreased approximately $8,000 for the three month period ended
March 31, 1997 as compared to the corresponding period in 1996, primarily due
to an early payoff of an installment contract receivable in December 1996,
partially offset by additional interest earned as a result of increased cash
balances.

Management fees-New Era represent amounts paid New Era for managing the
Partnership on a day-to-day basis pursuant to a Management Agreement which was
terminated effective June 30, 1996.  Accordingly, fees paid to New Era amounted
to zero for the three months ended March 31, 1997 as compared to approximately
$342,000 for the same period in 1996.  Subsequent to June 30, 1996 the General
Partner has assumed responsibility for the day-to-day management of the
Partnership and the corresponding costs and expenses are included in General
Partner's expense reimbursement.  See Note 8 to the Partnership's financial
statements included in the 1996 Form 10-K.

The General Partner's expense reimbursement represents amounts paid to LRC in
its capacity as general partner in excess of general partner distributions.
Total amounts paid to LRC for the three months ended March 31, 1997 were
approximately $457,000 (consisting of general partner's expense reimbursement
of approximately $457,000 and no general partner distribution). Total amounts
paid to LRC for the three months ended March 31, 1996 were approximately
$269,000 (consisting of general partner's expense reimbursement of $261,000 and
general partner distribution of $8,000).  The increase of approximately
$188,000 results from expenses of approximately $209,000 incurred in 1997 to
manage the day-to-day operations of the Partnership  due to the termination of
the Management Agreement with New Era as of June

                                      12

<PAGE>   13

30, 1996, (see Note 8 to the Partnership's financial statements included in     
the 1996 Form 10-K) partially offset by an overall decrease in all other
expenses of approximately $21,000.

Professional fees decreased approximately $39,000 for the three month period
ended March 31, 1997 as compared to the corresponding period in 1996, primarily
due to decreased legal fees relating to Partnership claims against former
accountants and others, audit fees, and consulting services.

The $348,000 credit for lease losses for the three months ended March 31, 1997
reflects recoveries on the Master Lease with CRCA (see Note 12 to the
Partnership's financial statements included in the 1996 Form 10-K), as well as
the impact from Management's ongoing assessment of potential losses inherent in
the lease portfolio.














                                      13

<PAGE>   14

PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

Reference is made to Item 3 - Legal Proceedings in the Partnership's December
31, 1996 Form 10-K, for a discussion of material legal proceedings involving
the Partnership.

ITEM 2.  CHANGES IN SECURITIES


None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5.  OTHER INFORMATION

None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K


(a)  Exhibits


See Exhibit Index.

(b)  Reports on Form 8-K


None.












                                      14

<PAGE>   15


                                   SIGNATURES



Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized, on the 12th day of May 1997.





                    DATRONIC EQUIPMENT INCOME FUND XVIII, L.P.
                    Registrant





               By:  /s/DONALD D. TORISKY
                    -----------------------------
                    Donald D. Torisky                         
                    Chairman and Chief Executive Officer,     
                    Lease Resolution Corporation              
                    General Partner of                        
                    Datronic Equipment Income Fund XVIII, L.P.



               By:  /s/ROBERT P. SCHAEN
                    -----------------------------
                    Robert P. Schaen                          
                    Vice-Chairman and Chief Financial Officer,
                    Lease Resolution Corporation              
                    General Partner of                        
                    Datronic Equipment Income Fund XVIII, L.P.








                                      15

<PAGE>   16



                          EXHIBIT INDEX
                          -------------


EXHIBIT NO.                   DESCRIPTION
-----------                   -----------
    27                        Financial Data Schedule, which is
                              submitted electronically to the    
                              Securities and Exchange Commission 
                              for information only and not filed.




















                                      16