##### 



SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q

|           |  |                                                                           | 
|---------- |  | ------------------------------------------------------------------------- | 
|(Mark One)
|[X]        |  | Quarterly Report Under Section 13 or 15(d) of the                        
|           |  | Securities Exchange Act of 1934                                          
|           |  | or                                                                       
|[  ]       |  | Transition Report Pursuant to Section 13 or 15(d) of the                 
|           |  | Securities Exchange Act of 1934                                          
|           |  |                                                                          
|           |  | for Quarterly Period Ended March 31, 2003
Commission file number 33-30312

INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP

|                                                                              |  |                                                
|----------------------------------------------------------------------------- |  | -----------------------------------------------
|NORTH CAROLINA
(State or other jurisdiction of
incorporation or organization) |  | 56-1681116
(I.R.S. Employer
Identification No.)

Wachovia Securities, NC0170
301 S. College St.  17th Floor, Charlotte, NC 28288-0170
(Address of principal executive offices)
(Zip Code)(704) 715-7616
(Registrants telephone number, including area code)

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

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

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12B-2 of the Exchange Act).

Yes 
  No x

Indicate the number of shares outstanding of each of the issuers classes of
common stock as of the latest practicable date.

7,650 limited partnership units outstanding at May 15, 2003

Page 1 of 10 Sequentially Numbered Pages





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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
AS OF MARCH 31, 2003, AND DECEMBER 31, 2002

|                                             |                                             |   |             |   |              |   |           |   | 
|-------------------------------------------- | ------------------------------------------- | - | ----------- | - | ------------ | - | --------- | - | 
|                                             |                                             |   | March 31,   |   |              |   |          
|                                             |                                             |   | 2003        |   | December 31,
|                                             |                                             |   | (Unaudited) |   | 2002        
|                                             |                                             |   |             |   |             
|                                             | ASSETS:                                     |   |             |   |              |   |           |   | 
|                                             |                                             |   |             |   |              |   |           |  
|Unimproved Land Held for Investment Purposes |                                             | $ | 1,911,500   |   |              | $ | 1,911,500 |  
|Cash and Cash Equivalents                    |                                             |   | 97,597      |   |              |   | 97,478    |  
|                                             |                                             |   |             |   |              |   |           |  
|                                             |                                             |   |             |   |              |   |           |  
|                                             |                                             | $ | 2,009,097   |   |              | $ | 2,008,978 |  
|                                             |                                             |   |             |   |              |   |           |  
|                                             | LIABILITIES AND PARTNERS EQUITY (DEFICIT): |   |             |   |              |   |           |   | 
|                                             |                                             |   |             |   |              |   |           |  
|Accrued Liabilities                          |                                             |   | 30          |   |              |   | 20        |  
|Due to General Partner                       |                                             |   | 14,744      |   |              |   | 356       |  
|                                             |                                             |   |             |   |              |   |           |  
|                                             |                                             |   |             |   |              |   |           |  
|                                             |                                             |   | 14,774      |   |              |   | 376       |  
|                                             |                                             |   |             |   |              |   |           |  
|                                             |                                             |   |             |   |              |   |           |  
|Class A Limited Partners Interest           |                                             |   | 1,994,469   |   |              |   | 2,008,747 |  
|Subordinated Limited Partners Interest      |                                             |   | 70          |   |              |   | 70        |  
|General Partners Interest                   |                                             |   | (216        | ) |              |   | (215      | )
|                                             |                                             |   |             |   |              |   |           |  
|                                             |                                             |   |             |   |              |   |           |  
|                                             |                                             |   | 1,994,323   |   |              |   | 2,008,602 |  
|                                             |                                             |   |             |   |              |   |           |  
|                                             |                                             |   |             |   |              |   |           |  
|                                             |                                             | $ | 2,009,097   |   |              | $ | 2,008,978 |  
|                                             |                                             |   |             |   |              |   |           |  

See Notes to Condensed Financial
Statements

2



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##### 



INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
Condensed Statements of Operations

|                                              |                                  |   |             |       |             |   |          |       | 
|--------------------------------------------- | -------------------------------- | - | ----------- | ----- | ----------- | - | -------- | ----- | 
|                                              |                                  |   | Three       |       | Three      
|                                              |                                  |   | Months      |       | Months     
|                                              |                                  |   | Ended       |       | Ended      
|                                              |                                  |   | March 31,   |       | March 31,  
|                                              |                                  |   | 2003        |       | 2002       
|                                              |                                  |   | (Unaudited) |       | (Unaudited)
|                                              |                                  |   |             |       |            
|INCOME:                                       |                                  |   |             |       |             |   |          |      
|                                              | Interest Income                  |   | $           | 120   |             |   | $        | 367   | 
|                                              |                                  |   |             |       |             |   |          |      
|                                              |                                  |   | 120         |       |             |   | 367      |      
|                                              |                                  |   |             |       |             |   |          |      
|EXPENSES:                                     |                                  |   |             |       |             |   |          |      
|                                              | Professional and Legal Fees      |   |             | 8,392 |             |   |          | 7,205 | 
|                                              | Property Tax Expense             |   |             | 10    |             |   |          | 10    | 
|                                              | General and Administrative Costs |   |             | 5,997 |             |   |          | 3,667 | 
|                                              |                                  |   |             |       |             |   |          |      
|                                              |                                  | $ | 14,399      |       |             | $ | 10,882   |      
|                                              |                                  |   |             |       |             |   |          |      
|                                              |                                  |   |             |       |             |   |          |      
|NET LOSS                                      |                                  |   | ($14,279    | )     |             |   | ($10,515 | )    
|                                              |                                  |   |             |       |             |   |          |      
|                                              |                                  |   |             |       |             |   |          |      
|NET LOSS ALLOCATION:                          |                                  |   |             |       |             |   |          |      
|                                              |                                  |   |             |       |             |   |          |      
|General Partners                              |                                  |   | (143        | )     |             |   | (105     | )    
|Class A Limited Partners                      |                                  |   | (14,136     | )     |             |   | (10,410  | )    
|                                              |                                  |   |             |       |             |   |          |      
|                                              |                                  |   | ($14,279    | )     |             |   | ($10,515 | )    
|                                              |                                  |   |             |       |             |   |          |      
|                                              |                                  |   |             |       |             |   |          |      
|CLASS A LIMITED PARTNERSHIP
UNITS OUTSTANDING |                                  |   | 7,650       |       |             |   | 7,650    |      
|                                              |                                  |   |             |       |             |   |          |      
|                                              |                                  |   |             |       |             |   |          |      
|NET LOSS PER CLASS A UNIT                     |                                  |   | ($1.85      | )     |             |   | ($1.36   | )    
|                                              |                                  |   |             |       |             |   |          |      

See Notes to Condensed Financial
Statements

3



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##### 



INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF PARTNERS EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002

(Unaudited)

|                                                   |  |          |       |          |  |         |           |       |  |              |    |  |  |   |           |  
|-------------------------------------------------- |  | -------- | ----- | -------- |  | ------- | --------- | ----- |  | ------------ | -- |  |  | - | --------- | -
|                                                   |  |          |       |          |  |         |           |       |  | Subordinated |    |  |  |  
|                                                   |  | General  |       | Limited  |  | Limited |           |       |  |             
|                                                   |  | Partners |       | Partners |  | Partner |           | Total
|                                                   |  |          |       |          |  |         |           |      
|Partners Equity (Deficit)
at December 31, 2001    |  |          | ($212 | )        |  | $       | 2,041,315 |       |  | $            | 71 |  |  | $ | 2,041,174 |  
|                                                   |  |          |       |          |  |         |           |       |  |              |    |  |  |   |           |  
|Net Loss for the Three Months
Ended March 31, 2002 |  |          | (1    | )        |  |         | (10,410   | )     |  |              | 0  |  |  |   | (10,515   | )
|                                                   |  |          |       |          |  |         |           |       |  |              |    |  |  |   |           |  
|                                                   |  |          |       |          |  |         |           |       |  |              |    |  |  |   |           |  
|Partners Equity (Deficit)
at March 31, 2002       |  |          | ($317 | )        |  | $       | 2,030,905 |       |  | $            | 71 |  |  | $ | 2,030,659 |  
|                                                   |  |          |       |          |  |         |           |       |  |              |    |  |  |   |           |  
|                                                   |  |          |       |          |  |         |           |       |  |              |    |  |  |   |           |  
|Partners Equity (Deficit)
at December 31, 2002    |  |          | ($215 | )        |  | $       | 2,008,747 |       |  | $            | 70 |  |  | $ | 2,008,602 |  
|                                                   |  |          |       |          |  |         |           |       |  |              |    |  |  |   |           |  
|Net Loss for the Three Months
Ended March 31, 2003 |  |          | (1    | )        |  |         | (14,278   | )     |  |              | 0  |  |  |   | (14,279   | )
|                                                   |  |          |       |          |  |         |           |       |  |              |    |  |  |   |           |  
|                                                   |  |          |       |          |  |         |           |       |  |              |    |  |  |   |           |  
|Partners Equity (Deficit)
at March 31, 2003       |  |          | ($216 | )        |  | $       | 1,994,469 |       |  | $            | 70 |  |  | $ | 1,994,323 |  
|                                                   |  |          |       |          |  |         |           |       |  |              |    |  |  |   |           |  

See Notes to Condensed Financial
Statements

4



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##### 



INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002

|                                                                   |                                                      |   |                |         |                |   |          |         |  
|------------------------------------------------------------------ | ---------------------------------------------------- | - | -------------- | ------- | -------------- | - | -------- | ------- | -
|                                                                   |                                                      |   | Three Months   |         | Three Months  
|                                                                   |                                                      |   | Ended          |         | Ended         
|                                                                   |                                                      |   | March 31, 2003 |         | March 31, 2002
|                                                                   |                                                      |   | (Unaudited)    |         | (Unaudited)   
|                                                                   |                                                      |   |                |         |               
|CASH FLOW FROM OPERATING
ACTIVITIES:                               |                                                      |   |                |         |                |   |          |        
|                                                                   |                                                      |   |                |         |                |   |          |        
|Net Loss                                                           |                                                      |   | ($14,279       | )       |                |   | ($10,515 | )      
|                                                                   |                                                      |   |                |         |                |   |          |        
|Adjustments to reconcile net loss to net
cash used for operations: |                                                      |   |                |         |                |   |          |        
|                                                                   |                                                      |   |                |         |                |   |          |        
|                                                                   | Increase in Accrued Liabilities                      |   |                | 10      |                |   |          | 10      |  
|                                                                   |                                                      |   |                |         |                |   |          |        
|                                                                   |                                                      |   |                |         |                |   |          |        
|                                                                   | Net Cash Provided by (Used for) Operating Activities |   |                | (14,269 | )              |   |          | (10,505 | )
|                                                                   |                                                      |   |                |         |                |   |          |        
|                                                                   |                                                      |   |                |         |                |   |          |        
|CASH FLOWS FROM FINANCING ACTIVITIES:                              |                                                      |   |                |         |                |   |          |        
|                                                                   | Advance from Related Party                           |   |                | 14,388  |                |   |          | 0       |  
|                                                                   |                                                      |   |                |         |                |   |          |        
|                                                                   | Net Cash Provided by Financing Activities            |   |                | 14,388  |                |   |          | 0       |  
|                                                                   |                                                      |   |                |         |                |   |          |        
|                                                                   | Increase (Decrease) in Cash and Cash Equivalents     |   |                | 119     |                |   |          | (10,505 | )
|                                                                   |                                                      |   |                |         |                |   |          |        
|Cash and Cash Equivalents at Beginning
of Period                   |                                                      |   | 97,478         |         |                |   | 129,674  |        
|                                                                   |                                                      |   |                |         |                |   |          |        
|                                                                   |                                                      |   |                |         |                |   |          |        
|Cash and Cash Equivalents at End of Period                         |                                                      | $ | 97,597         |         |                | $ | 119,169  |        
|                                                                   |                                                      |   |                |         |                |   |          |        

See Notes to Condensed Financial
Statements

5



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##### 



INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP

NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 2003



|1. |  | BASIS OF PRESENTATION
|-- |  | ---------------------

The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31,
2003, are not necessarily indicative of the results that may be expected for
the year to end December 31, 2003.



|2. |  | ORGANIZATION:
|-- |  | -------------

Interstate Land Investors II Limited Partnership (Registrant or
Partnership) is a North Carolina limited partnership. The Partnership filed
registration statements in 1989 and 1990 and offered the sale of the limited
partnership interests to persons who were admitted as limited partners. The
initial offering became effective September 29, 1989, and was terminated
November 3, 1989. The post effective amendment was filed in August 1990,
approved in November 1990, and closed November 30, 1990. Capital contributions
of $100 were received from the general partners and $7,650,000 from the limited
partners. The limited partnership units were sold in $1,000 units. On May 15,
2003, there were 775 unit holders of record. The Partnerships business now
consists of holding for investment, disposing and otherwise dealing in
approximately 48 of the original 145 acres of undeveloped land (the Property)
located in York County, South Carolina. On May 10, 2001, the Partnership sold
97 acres of the Property to Greenfield Development Company and the Partnership
now holds approximately 48 of the remaining acres of the Property for sale.

ITEM 2MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

1. Liquidity and Capital Resources

As of March 31, 2003, the Registrant had $97,597 on hand in the form of
cash and cash equivalents. The Registrant will retain this cash to pay ongoing
partnership expenses. Until the Registrant disposes of the Property, its only
sources of additional capital are additional loans from ISC Realty
Corporation, the general partner of the Partnership (the General Partner) or
other borrowings and proceeds from the sale of resources (i.e., timber) on the
Property, if any.

On May 11, 2001, the Partnership sold 96.9 acres of the Property to
Greenfield Development Company LLC. The gross sale price of the facility was
$4,338,360. A portion of the sale proceeds in the amount of $313,543 was used
to pay debts to the General Partner. Closing costs and pro-rations incurred at
settlement totaled $447,609 leaving net cash proceeds to the Partnership of
$3,577,208. On June 14, 2001, a .33 acre right-of-way was purchased by South
Carolina Dept. of Transportation for $15,000.

On June 29, 2001, a distribution of $3,467,975 (representing $453 per
unit) was distributed to the limited partners of the Partnership.

6



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##### 



2. Results of Operations

The Registrants net loss was $14,279 for the first quarter ended March
31, 2003, compared to a loss of $10,515 for the same period in 2002. This
loss is due to higher accounting fees paid in the first quarter and expenses
incurred for printing partnership-addressed envelopes to mail the K-1 forms.

Interest income decreased to $120 for the quarter ended March 31, 2003,
compared with $367 for the quarter ended March 31, 2002, due to lower dollar
amount of cash on hand calculated at lower interest rate percentages.

Professional and legal fees increased to $8,392 for the three months ended
March 31, 2003, compared to $7,205 for the three months ended March 31, 2002.
This increase reflects higher accounting fees paid in the current quarter for
K-1 and tax return preparation and filing. General and administrative costs
increased to $5,997 compared to $3,667 for the first quarter of 2002. This
increase is due to cost of printing partnership-addressed envelopes to mail
K-1s to the limited partners. All other expenses were comparable with the 2002
first quarter.

3. Quantitative and Qualitative Disclosures About Market Risk.

The Partnership dies not hold any financial instruments with market risk
exposure.

4. Controls and Procedures

Evaluation of disclosure controls and procedures. The General Partners
Senior Vice President (our principal executive officer and principal financial
officer,) has concluded, based on his evaluation as of a date within 90 days
prior to the filing date of this Report, that the Partnerships disclosure
controls and procedures are effective to ensure that information required to be
disclosed by us in the reports filed or submitted by us under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the time periods specified in the SECs rules and forms, and
include controls and procedures designed to ensure that information required to
be disclosed by us in such reports is accumulated and communicated to the
Partnerships management, including the General Partners Senior Vice
President, as appropriate to allow timely decisions regarding required
disclosure.

Changes in internal controls.There were no significant changes in the
Partnerships internal controls or in other factors that could significantly
affect these controls subsequent to the date of such evaluation.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 2. Changes in Securities

None.

7



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Item 3. Defaults Upon Senior Securities

None.

Item 4. Submissions of Matters to a Vote of Securities Holders

None.

Item 5. Other Information.

The remaining approximate 48 acres of the Property is listed for sale with
Bissell Patrick. Should a sale of the Property occur from this contractual
listing agreement, the past president of ISCR,
J. Christopher Boone, may receive a sales commission through a separate
agreement between Mr. Boone and Bissell Patrick. As the purchase price of the
Property is not known, the Partnership is unable to determine the amount of the
sales commission, if any, that Mr. Boone may receive.

Item 6. Exhibits and Reports on Form 8-K.

(a)  Exhibits



| |  | Exhibit 99.1 Certification by Principal Executive and Financial
Officer Pursuant to Section 906 of the Sarbanes-Oxley Act. Of 2002.
| |  | -----------------------------------------------------------------------------------------------------------------------------------

(b)  Reports on Form 8-K



| |  | No reports on Form 8-K were required to be filed during the three months
ended March 31, 2003.
| |  | ----------------------------------------------------------------------------------------------

8



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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP

SIGNATURE

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.

|      |  |              |  |                              |  |                                 
|----- |  | ------------ |  | ---------------------------- |  | --------------------------------
|      |  |              |  | INTERSTATE LAND INVESTORS II
|      |  |              |  | LIMITED PARTNERSHIP         
|      |  |              |  |                              |  |                                 
|      |  |              |  | By:                          |  | ISC REALTY CORPORATION          
|      |  |              |  |                              |  | As Principal Executive Officer, 
|      |  |              |  |                              |  | Principal Financial Officer, and
|      |  |              |  |                              |  | Principal Accounting Officer of 
|      |  |              |  |                              |  | the Registrant                  
|      |  |              |  |                              |  |                                 
|      |  |              |  | By:                          |  | /s/Jeffrey K. Harpel            
|      |  |              |  |                              |  |                                 
|      |  |              |  |                              |  | Jeffrey K. Harpel               
|Date: |  | May 15, 2003 |  |                              |  |                                 
|      |  |              |  |                              |  |                                 



PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER CERTIFICATION PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey K. Harpel, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Interstate Land
Investors II Limited Partnership;

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



| |  | a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

9



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##### 





| |  | b) evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                      

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):



| |  | a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal
controls; and                                                                                                                                        

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

|                   |  |                                
|------------------ |  | -------------------------------
|By:                |  |                                
|                   |  |                                
|Date: May 15, 2003 |  | /s/Jeffrey K. Harpel           
|                   |  |                                
|                   |  | Jeffrey K. Harpel              
|                   |  | Senior Vice President          
|                   |  | ISC Realty Corporation,        
|                   |  | General Partner,               
|                   |  | Principal Executive Officer    
|                   |  | and Principal Financial Officer
|                   |  | of the Registrant              

10