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

                                   FORM 10-Q/A


                                   (Mark One)

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

                For the quarterly period ended      JUNE 30, 2001
                                               ------------------

                                       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 No. 0-19137

                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP
                  --------------------------------------------
             (Exact name of registrant as specified in its charter)


    Massachusetts                                                 04-3057290
    (State or other jurisdiction of                             (IRS Employer
   incorporation or organization)                         Identification No.)

    88 Broad Street, Boston, MA                                        02110
   (Address of principal executive offices)                        (Zip Code)


Registrant's  telephone  number,  including  area  code     (617)  854-5800
                                                        -------------------


(Former  name,  former  address  and  former  fiscal year, if changed since last
report.)

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.
Yes    X  No
   -----



<PAGE>




                                EXPLANATORY NOTE


After AIRFUND II International Limited Partnership ("the Partnership") filed its
Annual  Report on Form 10-K/A Amendment No. 1 to Form 10-K (the "2000 10-K") for
the  year  ended  December 31, 2000 and its Form 10-Q for the quarter ended June
30,  2001  (the "June 30, 2001 Form 10-Q") with the United States Securities and
Exchange  Commission  ("SEC"),  the  Partnership  determined that the accounting
treatment  for  the  loan  receivable  from  Echelon  Residential  Holdings  LLC
("Echelon  Residential  Holdings")  required  revision,  as  explained  below.

As  reported in the 2000 10-K and the June 30, 2001 Form 10-Q, on March 8, 2000,
the  Partnership  and 10 affiliated partnerships (the ''Exchange Partnerships'')
collectively  loaned $32 million to Echelon Residential Holdings, a newly formed
real  estate company.  The Partnership's loan to Echelon Residential Holdings is
$3,640,000.  Echelon  Residential  Holdings,  through  a wholly owned subsidiary
(Echelon Residential LLC), used the loan proceeds to acquire various real estate
assets  from  Echelon International Corporation, an unrelated Florida-based real
estate  company. The loan has a term of 30 months, maturing on September 8, 2002
and an annual interest rate of 14% for the first 24 months and 18% for the final
six  months.  Interest accrues and compounds monthly and is payable at maturity.
In  connection  with the transaction, Echelon Residential Holdings has pledged a
security  interest  in  all  of  its  right,  title  and  interest in and to its
membership  interests in Echelon Residential LLC to the Exchange Partnerships as
collateral.
The loan receivable was previously accounted for and reported in accordance with
the  guidance  for  Acquisition, Development and Construction Arrangements ("ADC
arrangements")  in  the Partnership's financial statements as of and for each of
the  three  and six months ended June 30, 2001 and 2000, respectively.  The loan
was presented as an investment in a real estate venture and was presented net of
the  Partnership's  share  of  losses  in  Echelon  Residential  Holdings.  The
Partnership  was  allocated  its  proportionate share of the unconsolidated real
estate  venture's net loss, excluding the interest expense on the loan, based on
the  balance  of  its  loan  receivable in relation to the real estate venture's
total  equity  and notes payable, including the ADC arrangements.  For the three
and  six  month periods ended June 30, 2001 and June 30, 2000, the Partnership's
share  of  losses  in Echelon Residential Holdings was $83,806 and $158,509, and
$19,775  and  $23,337,  respectively,  and  was  reflected  on  the Statement of
Operations  as  ''Partnership's  share  of  unconsolidated real estate venture's
loss''.
Subsequent  to  the  issuance  of  the 2000 Form 10-K and the June 30, 2001 Form
10-Q,  the  Partnership  determined that the loan receivable should be accounted
for  consistent  with  its  legal  form and the Partnership should recognize the
interest  income,  as calculated per the contractual terms of the loan agreement
to the extent such interest income was evaluated as likely to be collected.  The
loan  receivable  and  related interest should be evaluated for impairment under
Statement of Financial Accounting Standards No. 114 "Accounting by Creditors for
Impairment  of  a  Loan".
Accordingly,  the  Partnership  reversed  the  proportionate  share of losses in
Echelon  Residential Holdings of  $83,806 and $158,509, respectively, previously
recorded  during  the  three  and six months ended June 30, 2001 and $19,775 and
$23,337,  respectively,  for  the three and six months ended June 30, 2000.  The
Partnership  also  recognized  interest income of $144,686 during the six months
ended  June  30, 2001 and $131,557 and $165,531, during the three and six months
ended  June  30,  2000,  respectively.

In  addition,  during the second quarter of 2001, the General Partner determined
that  recoverability  of  the  loan receivable had been impaired and at June 30,
2001  recorded  an  impairment  of  $318,500,  reflecting  the General Partner's
current  assessment  of  the amount of loss that is likely to be incurred by the
Partnership.  In  addition  to  the  write-down  recorded  at June 30, 2001, the
Partnership  reserved  all  accrued  interest  of  $590,772 recorded on the loan
receivable  through  March 31, 2001 and has ceased accruing interest on its loan
receivable  from  Echelon  Residential  Holdings,  effective  April  1,  2001.

These  adjustments  resulted in a net decrease in earnings for the three and six
months  ended June 30, 2001 of $825,466 and $606,077, respectively, or $0.29 and
$0.22, per limited partnership unit.  The adjustments resulted in a net increase
to  earnings  for  the  three and six months ended June 30, 2000 of $151,332 and
$188,868,  respectively,  or $0.05 and $0.07, per limited partnership unit. As a
result,  the  accompanying  financial  statements  for each of the three and six
months  ended June 30, 2001 and June 30, 2000 and the Partnership's Statement of
Financial  Position  as of December 31, 2000 have been restated from the amounts
previously  reported.


A  summary  of  the  significant  effects  of  the  restatement  is  as follows:


                         As of and for the Three Months Ended
                                       June 30, 2001

<TABLE>
<CAPTION>

                                                           As
                                                       Previously        As
Statement of Operations                                 Reported      Restated
                                                      ------------  ------------
<S>                                                   <C>           <C>
Income

Operating lease revenue                               $   155,113   $   155,113
Sales-type lease revenue                                    3,351         3,351
Interest income                                            38,022        38,022
Other Income                                               29,000        29,000
                                                      ------------  ------------
  Total income                                            225,486       225,486
                                                      ------------  ------------

Expenses

Depreciation                                               65,345        65,345
Write-down of equipment                                   125,000       125,000
Interest expense                                           31,637        31,637
Equipment management fees - affiliate                      10,705        10,705
Operating expenses - affiliate                            174,370       174,370
Write-down of impaired loan and interest receivable             -       909,272
Partnership's share of unconsolidated
  real estate venture's loss                               83,806             -
                                                      ------------  ------------
  Total expenses                                          490,863     1,316,329
                                                      ------------  ------------

Net loss                                              $  (265,377)  $(1,090,843)
                                                      ============  ============
Net loss per limited partnership unit                 $     (0.09)  $     (0.38)
                                                      ============  ============



Balance Sheet Data:

Total assets                                          $ 9,107,990   $ 9,224,288
                                                      ============  ============
Total liabilities                                     $ 1,793,247   $ 1,793,247
Partners' capital (deficit)
   General Partner                                     (2,629,720)   (2,623,905)
   Limited Partnership Interests                        9,944,463    10,054,946
                                                      ------------  ------------
Total partners' capital                               $ 7,314,743   $ 7,431,041
                                                      ============  ============
</TABLE>



<PAGE>



                          As of and for the Six Months Ended
                                       June 30, 2001
<TABLE>
<CAPTION>

                                                           As
                                                       Previously        As
Statement of Operations                                 Reported      Restated
                                                      ------------  ------------
<S>                                                   <C>           <C>
Income

Operating lease revenue                               $   311,108   $   311,108
Sales-type lease revenue                                    6,702         6,702
Interest income                                            68,143        68,143
Interest income - loan receivable                               -       144,686
Other income                                               29,000        29,000
                                                      ------------  ------------
  Total income                                            414,953       559,639
                                                      ------------  ------------

Expenses

Depreciation                                              130,691       130,691
Write-down of equipment                                   125,000       125,000
Interest expense                                           49,030        49,030
Equipment management fees - affiliate                      21,455        21,455
Operating expenses - affiliate                            315,802       315,802
Write-down of impaired loan and interest receivable             -       909,272
Partnership's share of unconsolidated
  real estate venture's loss                              158,509             -
                                                      ------------  ------------
  Total expenses                                          800,487     1,551,250
                                                      ------------  ------------

Net loss                                              $  (385,534)  $  (991,611)
                                                      ============  ============
Net loss per limited partnership unit                 $     (0.13)  $     (0.35)
                                                      ============  ============



Balance Sheet Data:

Total assets                                          $ 9,107,990   $ 9,224,288
                                                      ============  ============
Total liabilities                                     $ 1,793,247   $ 1,793,247
Partners' capital (deficit)
   General Partner                                     (2,629,720)   (2,623,905)
   Limited Partnership Interests                        9,944,463    10,054,946
                                                      ------------  ------------
Total partners' capital                               $ 7,314,743   $ 7,431,041
                                                      ============  ============
</TABLE>





<PAGE>





                         As of and for the Three Months Ended
                                       June 30, 2000

<TABLE>
<CAPTION>

                                               As
                                           Previously        As
Statement of Operations                     Reported      Restated
                                          ------------  ------------
<S>                                       <C>           <C>
Income

Operating lease revenue                   $   148,602   $   148,602
Interest income                                37,238        37,238
Interest Income- loan receivable                    -       131,557
Gain on sale of equipment                     750,000       750,000
Other Income                                  245,977       245,977
                                          ------------  ------------
  Total income                              1,181,817     1,313,374
                                          ------------  ------------

Expenses

Depreciation                                   79,837        79,837
Interest expense                               23,388        23,388
Equipment management fees - affiliate           7,430         7,430
Operating expenses - affiliate                130,718       130,718
Partnership's share of unconsolidated
  real estate venture's loss                   19,775             -
                                          ------------  ------------
  Total expenses                              261,148       241,373
                                          ------------  ------------

Net income                                $   920,669   $ 1,072,001
                                          ============  ============
Net income per limited partnership unit   $      0.32   $      0.37
                                          ============  ============



Balance Sheet Data:

Total assets                              $ 9,763,730   $ 9,952,598
                                          ============  ============
Total liabilities                         $ 1,323,486   $ 1,323,486
Partners' capital (deficit)
   General Partner                         (2,573,444)   (2,564,000)
   Limited Partnership Interests           11,013,688    11,193,112
                                          ------------  ------------
Total partners' capital                   $ 8,440,244   $ 8,629,112
                                          ============  ============
</TABLE>



<PAGE>


                          As of and for the Six Months Ended
                                       June 30, 2000
<TABLE>
<CAPTION>

                                               As
                                           Previously        As
Statement of Operations                     Reported      Restated
                                          ------------  ------------
<S>                                       <C>           <C>
Income

Operating lease revenue                   $   258,022   $   258,022
Interest income                               104,174       104,174
Interest income - loan receivable                   -       165,531
Gain on sale of equipment                     750,000       750,000
Other income                                  300,977       300,977
                                          ------------  ------------
  Total income                              1,413,173     1,578,704
                                          ------------  ------------

Expenses

Depreciation                                  159,674       159,674
Interest expense                               54,073        54,073
Equipment management fees - affiliate          12,901        12,901
Operating expenses - affiliate               246,.995      246,.995
Partnership's share of unconsolidated
  real estate venture's loss                   23,337             -
                                          ------------  ------------
  Total expenses                              496,980       473,643
                                          ------------  ------------

Net income                                $   916,193   $ 1,105,061
                                          ============  ============
Net income per limited partnership unit   $      0.32   $      0.39
                                          ============  ============



Balance Sheet Data:

Total assets                              $ 9,763,730   $ 9,952,598
                                          ============  ============
Total liabilities                         $ 1,323,486   $ 1,323,486
Partners' capital (deficit)
   General Partner                         (2,573,444)   (2,564,000)
   Limited Partnership Interests           11,013,688    11,193,112
                                          ------------  ------------
Total partners' capital                   $ 8,440,244   $ 8,629,112
                                          ============  ============
</TABLE>








<PAGE>

                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                                   FORM 10-Q/A

                                      INDEX

<TABLE>
<CAPTION>


PART I. FINANCIAL INFORMATION:                                             Page
                                                                           ----
<S>                                                                        <C>
     Item 1. Financial Statements (Restated):

                Statement of Financial Position
                at June 30, 2001 and December 31, 2000                        3

                Statement of Operations
                for the three and six months ended June 30, 2001 and 2000     4

                Statement of Cash Flows
                for the six months ended June 30, 2001 and 2000               5

                Notes to the Financial Statements                             6


     Item 2. Management's Discussion and Analysis of Financial
                 Condition and Results of Operations                         13

     Item 3. Quantitative and Qualitative Disclosures about Market Risk      19


PART II. OTHER INFORMATION:

     Item 1 - 6                                                              20
</TABLE>







<PAGE>



                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                         STATEMENT OF FINANCIAL POSITION

                       JUNE 30, 2001 AND DECEMBER 31, 2000

                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                             June 30,      December 31,
 .                                                              2001            2000
 .                                                            Restated        Restated
ASSETS                                                     (See Note 1)    (See Note 1)
                                                           -------------  --------------
<S>                                                        <C>            <C>

Cash and cash equivalents                                  $  3,208,739   $   2,827,385
Rents receivable                                                  4,857         116,820
Accounts receivable - affiliate                                 137,655          33,452
Other assets                                                     34,016          24,508
Interest receivable - loan, net of allowance of $590,772
  at June 30, 2001                                                    -         446,086
Loan receivable, net of allowance of $318,500
  at June 30, 2001                                            3,321,500       3,640,000
Net investment in sales-type lease                              129,043         240,330
Equipment at cost, net of accumulated depreciation
  of $8,408,636 and $8,152,945 at June 30, 2001
  and December 31, 2000, respectively                         2,388,478       2,644,169
                                                           -------------  --------------

      Total assets                                         $  9,224,288   $   9,972,750
                                                           =============  ==============


LIABILITIES AND PARTNERS' CAPITAL

Notes payable                                              $  1,142,265   $     906,869
Accrued interest                                                  7,525           7,161
Accrued liabilities                                             613,396         591,617
Accrued liabilities - affiliate                                  30,061          17,207
Deferred rental income                                                -          27,244
                                                           -------------  --------------
     Total liabilities                                        1,793,247       1,550,098
                                                           -------------  --------------

Partners' capital (deficit):
   General Partner                                           (2,623,905)     (2,574,324)
   Limited Partnership Interests
   (2,714,647 Units; initial purchase price of $25 each)     10,054,946      10,996,976
                                                           -------------  --------------
     Total partners' capital                                  7,431,041       8,422,652
                                                           -------------  --------------

     Total liabilities and partners' capital               $  9,224,288   $   9,972,750
                                                           =============  ==============
</TABLE>






   The accompanying notes are an integral part of these financial statements.
<PAGE>

                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                             STATEMENT OF OPERATIONS

            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000

                                   (UNAUDITED)

<TABLE>
<CAPTION>

<S>                                                  <C>                        <C>
 .                                                    For the three months ended  For the nine months ended
 .                                                          September 30,              September 30,
</TABLE>

<TABLE>
<CAPTION>

<S>                                                   <C>            <C>            <C>            <C>
 .                                                          2001           2000           2001           2000
 .                                                       Restated       Restated       Restated       Restated
INCOME                                                 (See Note 1)   (See Note 1)   (See Note 1)   (See Note 1)

Operating lease revenue                               $    155,113   $    148,602   $    311,108   $    258,022
Sales-type lease revenue                                     3,351              -          6,702              -
Interest income                                             38,022         37,238         68,143        104,174
Interest income - loan receivable                                -        131,557        144,686        165,531
Gain on sale of equipment                                        -        750,000              -        750,000
Other income                                                29,000        245,977         29,000        300,977
                                                      -------------  -------------  -------------  -------------
  Total income                                             225,486      1,313,374        559,639      1,578,704
                                                      -------------  -------------  -------------  -------------

EXPENSES

Depreciation                                                65,345         79,837        130,691        159,674
Write-down of equipment                                    125,000              -        125,000              -
Interest expense                                            31,637         23,388         49,030         54,073
Equipment management fees - affiliate                       10,705          7,430         21,455         12,901
Operating expenses - affiliate                             174,370        130,718        315,802        246,995
Write-down of impaired loan and interest receivable        909,272              -        909,272              -
                                                      -------------  -------------  -------------  -------------
  Total expenses                                         1,316,329        241,373      1,551,250        473,643
                                                      -------------  -------------  -------------  -------------

Net income (loss)                                     $ (1,090,843)  $  1,072,001   $   (991,611)  $  1,105,061
                                                      =============  =============  =============  =============



Net income (loss) per limited partnership unit        $      (0.38)  $       0.37   $      (0.35)  $       0.39
                                                      =============  =============  =============  =============
Cash distributions declared
   per limited partnership unit                       $         --   $         --   $         --   $         --
                                                      =============  =============  =============  =============
</TABLE>












   The accompanying notes are an integral part of these financial statements.

<PAGE>
                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                             STATEMENT OF CASH FLOWS

                 FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000

                                   (UNAUDITED)
<TABLE>
<CAPTION>

<S>                                                       <C>            <C>
 .                                                               2001           2000
 .                                                             Restated       Restated
 .                                                          (See Note 1)   (See Note 1)
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES
Net income (loss)                                         $   (991,611)  $  1,105,061
Adjustments to reconcile net income (loss) to net
 cash provided by operating activities:
  Depreciation                                                 130,691        159,674
  Write-down of equipment                                      125,000              -
  Gain on sale of equipment                                          -       (750,000)
  Write-down of impaired loan and interest receivable          909,272              -
  Sales-type lease revenue                                      (6,702)             -
Changes in assets and liabilities:
  Rents receivable                                             111,963              -
  Accounts receivable - affiliate                             (104,203)        (1,684)
  Other assets                                                  (9,508)        31,742
  Interest receivable - loan                                  (144,686)      (165,531)
  Collections on net investment in sales-type lease            117,989              -
  Accrued interest                                                 364         (4,493)
  Accrued liabilities                                           21,779       (237,144)
  Accrued liabilities - affiliate                               12,854        (68,572)
  Deferred rental income                                       (27,244)       (25,775)
                                                          -------------  -------------
    Net cash provided by operating activities                  145,958         43,278
                                                          -------------  -------------

CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES
Proceeds from equipment sales                                        -        750,000
Issuance of loan receivable                                          -     (3,640,000)
                                                          -------------  -------------
    Net cash provided by (used in) investing activities              -     (2,890,000)
                                                          -------------  -------------

CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES
Proceeds from notes payable                                    505,028        201,247
Principal payments - notes payable                            (269,632)      (130,205)
                                                          -------------  -------------
    Net cash provided by financing activities                  235,396         71,042
                                                          -------------  -------------

Net increase (decrease) in cash and cash equivalents           381,354     (2,775,680)
Cash and cash equivalents at beginning of period             2,827,385      5,719,642
                                                          -------------  -------------
Cash and cash equivalents at end of period                $  3,208,739   $  2,943,962
                                                          =============  =============

SUPPLEMENTAL INFORMATION
Cash paid during the period for interest                  $     48,666   $     58,566
                                                          =============  =============
</TABLE>


See  Note  9  to  the  financial  statements  regarding  the  refinancing of the
Partnership's  notes  payable  in  February  2001.


   The accompanying notes are an integral part of these financial statements.

<PAGE>
                                     ------

                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                        NOTES TO THE FINANCIAL STATEMENTS


                                  JUNE 30, 2001

                                   (UNAUDITED)

NOTE  1  -  RESTATEMENT  OF  FINANCIAL  STATEMENTS
--------------------------------------------------

After AIRFUND II International Limited Partnership ("the Partnership") filed its
Annual  Report on Form 10-K/A Amendment No. 1 to Form 10-K (the "2000 10-K") for
the  year  ended  December 31, 2000 and its Form 10-Q for the quarter ended June
30,  2001  (the "June 30, 2001 Form 10-Q") with the United States Securities and
Exchange  Commission  ("SEC"),  the  Partnership  determined that the accounting
treatment  for  the  loan  receivable  from  Echelon  Residential  Holdings  LLC
("Echelon  Residential  Holdings")  required  revision,  as  explained  below.

As  reported in the 2000 10-K and the June 30, 2001 Form 10-Q, on March 8, 2000,
the  Partnership  and 10 affiliated partnerships (the ''Exchange Partnerships'')
collectively  loaned $32 million to Echelon Residential Holdings, a newly formed
real  estate company.  The Partnership's loan to Echelon Residential Holdings is
$3,640,000.  Echelon  Residential  Holdings,  through  a wholly owned subsidiary
(Echelon Residential LLC), used the loan proceeds to acquire various real estate
assets  from  Echelon International Corporation, an unrelated Florida-based real
estate  company. The loan has a term of 30 months, maturing on September 8, 2002
and an annual interest rate of 14% for the first 24 months and 18% for the final
six  months.  Interest accrues and compounds monthly and is payable at maturity.
In  connection  with the transaction, Echelon Residential Holdings has pledged a
security  interest  in  all  of  its  right,  title  and  interest in and to its
membership  interests in Echelon Residential LLC to the Exchange Partnerships as
collateral.
The loan receivable was previously accounted for and reported in accordance with
the  guidance  for  Acquisition, Development and Construction Arrangements ("ADC
arrangements")  in  the Partnership's financial statements as of and for each of
the  three  and six months ended June 30, 2001 and 2000, respectively.  The loan
was presented as an investment in a real estate venture and was presented net of
the  Partnership's  share  of  losses  in  Echelon  Residential  Holdings.  The
Partnership  was  allocated  its  proportionate share of the unconsolidated real
estate  venture's net loss, excluding the interest expense on the loan, based on
the  balance  of  its  loan  receivable in relation to the real estate venture's
total  equity  and notes payable, including the ADC arrangements.  For the three
and  six  month periods ended June 30, 2001 and June 30, 2000, the Partnership's
share  of  losses  in Echelon Residential Holdings was $83,806 and $158,509, and
$19,775  and  $23,337,  respectively,  and  was  reflected  on  the Statement of
Operations  as  ''Partnership's  share  of  unconsolidated real estate venture's
loss''.
Subsequent  to  the  issuance  of  the 2000 Form 10-K and the June 30, 2001 Form
10-Q,  the  Partnership  determined that the loan receivable should be accounted
for  consistent  with  its  legal  form and the Partnership should recognize the
interest  income,  as calculated per the contractual terms of the loan agreement
to the extent such interest income was evaluated as likely to be collected.  The
loan  receivable  and  related interest should be evaluated for impairment under
Statement of Financial Accounting Standards No. 114 "Accounting by Creditors for
Impairment  of  a  Loan".
Accordingly,  the  Partnership  reversed  the  proportionate  share of losses in
Echelon  Residential Holdings of  $83,806 and $158,509, respectively, previously
recorded  during  the  three  and six months ended June 30, 2001 and $19,775 and
$23,337,  respectively,  for  the three and six months ended June 30, 2000.  The
Partnership  also  recognized  interest income of $144,686 during the six months
ended  June  30, 2001 and $131,557 and $165,531, during the three and six months
ended  June  30,  2000,  respectively.

In  addition,  during the second quarter of 2001, the General Partner determined
that  recoverability  of  the  loan receivable had been impaired and at June 30,
2001  recorded  an  impairment  of  $318,500,  reflecting  the General Partner's
current  assessment  of  the amount of loss that is likely to be incurred by the
Partnership.  In  addition  to  the  write-down  recorded  at June 30, 2001, the
Partnership  reserved  all  accrued  interest  of  $590,772 recorded on the loan
receivable  through  March 31, 2001 and has ceased accruing interest on its loan
receivable  from  Echelon  Residential  Holdings,  effective  April  1,  2001.

These  adjustments  resulted in a net decrease in earnings for the three and six
months  ended June 30, 2001 of $825,466 and $606,077, respectively, or $0.29 and
$0.22, per limited partnership unit.  The adjustments resulted in a net increase
to  earnings  for  the  three and six months ended June 30, 2000 of $151,332 and
$188,868,  respectively,  or $0.05 and $0.07, per limited partnership unit. As a
result,  the  accompanying  financial  statements  for each of the three and six
months  ended June 30, 2001 and June 30, 2000 and the Partnership's Statement of
Financial  Position  as of December 31, 2000 have been restated from the amounts
previously  reported.


NOTE  2  -  BASIS  OF  PRESENTATION
-----------------------------------

The  financial  statements,  as  restated,  presented  herein  are  prepared  in
conformity  with  accounting  principles generally accepted in the United States
for  interim  financial  reporting  and the instructions for preparing Form 10-Q
under Rule 10-01 of Regulation S-X of the Securities and Exchange Commission and
are  unaudited.  As  such,  these  financial  statements  do  not  include  all
information  and  footnote  disclosures  required  under  accounting  principles
generally  accepted  in the United States for complete financial statements and,
accordingly, the accompanying financial statements should be read in conjunction
with the footnotes presented in the Partnership's 2000 Annual Report.  Except as
disclosed herein, there has been no material change to the information presented
in  the  footnotes  to  the  2000  Annual Report on Amendment No. 2 Form 10-K/A.

In  the  opinion  of  management,  all  adjustments  (consisting  of  normal and
recurring  adjustments)  considered  necessary  to  present fairly the financial
position  at  June  30, 2001 and December 31, 2000 and results of operations for
the  three and six month periods ended June 30, 2001 and 2000 have been made and
are reflected.  Operating results for the six months ended June 30, 2001 are not
necessarily  indicative of the results that may be expected for the entire year.


NOTE  3  -  CASH
----------------

At  June  30,  2001,  the Partnership had  $3,109,515 invested in federal agency
discount  notes,  repurchase  agreements  secured  by  U.S.  Treasury  Bills  or
interests  in  U.S.  Government  securities,  or  other  highly liquid overnight
investments.


NOTE  4  -  REVENUE  RECOGNITION
--------------------------------

Rents  are  payable  to  the Partnership monthly or quarterly and no significant
amounts  are calculated on factors other than the passage of time.  The majority
of  the  leases  are  accounted  for as operating leases and are noncancellable.
Rents received prior to their due dates are deferred.  In certain instances, the
Partnership  may  enter  renewal  or re-lease agreements which expire beyond the
Partnership's  anticipated  dissolution date.  This circumstance is not expected
to  prevent  the orderly wind-up of the Partnership's business activities as the
General  Partner  and EFG would seek to sell the then-remaining equipment assets
either  to  the lessee or to a third party, taking into consideration the amount
of  future  noncancellable  rental  payments associated with the attendant lease
agreements.  See  also  Note  10  regarding  the  Class  Action Lawsuit.  Future
minimum  rents  for  operating  leases  of  $1,186,927  are  due  as  follows:
<TABLE>
<CAPTION>

<S>                           <C>    <C>
For the year ending June 30,   2002  $  412,079
                               2003     412,079
                               2004     313,754
                               2005      49,015
                                     ----------

 .                             Total  $1,186,927
                                     ==========
</TABLE>


Lease  payments for the sales-type lease are due monthly and the related revenue
is  recognized by a method, which produces a constant periodic rate of return on
the  outstanding investment in the lease.  Future minimum lease payments for the
sales-type lease of $137,418 are due through the date of the lease expiration in
January  2002.

NOTE  5  -  EQUIPMENT
---------------------

The  following  is  a  summary of equipment owned by the Partnership at June 30,
2001.  Remaining  Lease  Term  (Months), as used below, represents the number of
months  remaining  from June 30, 2001 under contracted lease terms.  A Remaining
Lease  Term  equal to zero reflects equipment held for sale or re-lease.  In the
opinion  of  EFG,  the acquisition cost of the equipment did not exceed its fair
market  value.
<TABLE>
<CAPTION>


                                                  Remaining
                                                    Lease
                                                     Term      Equipment
      Equipment Type                               (Months)     at Cost
------------------------------------------------  ----------  ------------
<S>                                               <C>         <C>
Two Rolls Royce aircraft engines (Off Lease)               0  $ 6,000,000
One McDonnell-Douglas MD-82
(Aerovias de Mexico S.A. de C.V.)                         38    2,078,640
One McDonnell-Douglas MD-82 (Off Lease)                    0    2,078,640
One Boeing 737-2H4 (Air Slovakia)                         26      639,834
                                                              ------------
     Total equipment cost                                  .   10,797,114
     Accumulated depreciation                              .   (8,408,636)
                                                              ------------
     Equipment, net of accumulated depreciation            .  $ 2,388,478
                                                              ============
</TABLE>



The  costs  of  each  of  the  Partnership's  aircraft  represent  proportionate
ownership  interests.  The  remaining  interests  are  owned by other affiliated
partnerships  sponsored  by  EFG.  All  partnerships  individually  report,  in
proportion  to  their respective ownership interests, their respective shares of
assets,  liabilities,  revenues,  and  expenses  associated  with  the aircraft.

One  of the Partnership's aircraft and the related lease payment streams secures
the  Partnership's  loan  with a third-party lender (see Note 9).  The preceding
summary  includes  leveraged  equipment having an original cost of approximately
$2,079,000  and  a  net book value of approximately $1,165,000 at June 30, 2001.
The  Rolls  Royce  aircraft engines were fully depreciated prior to December 31,
2000.

At  June  30,  2001,  a  McDonnell  Douglas  MD-82 aircraft previously leased to
Finnair  OY  and  the Partnership's Rolls Royce aircraft engines were off lease.
The  Partnership's  interest  in  this  aircraft  had  an  original  cost  of
approximately  $2,079,000  and  a  net book value of approximately $1,040,000 at
June  30,  2001.  The  aircraft  engines  had a cost of $6,000,000 and have been
fully  depreciated.  The General Partner is attempting to remarket this aircraft
and  the  Rolls  Royce  aircraft  engines.

The  Partnership accounts for impairment of long-lived assets in accordance with
Statement  of  Financial  Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of"
which was issued in March 1995.  SFAS No. 121 requires that long-lived assets be
reviewed  for  impairment  whenever  events or changes in circumstances indicate
that  the  net book value of the assets may not be recoverable from undiscounted
future cash flows.  During the three months ended June 30, 2001, the Partnership
recorded  a  write-down of equipment, representing an impairment to the carrying
value  of  the  Partnership's  interest  in the McDonnell Douglas MD-82 aircraft
discussed  above.  The resulting charge of $125,000 was based on a comparison of
estimated  fair  value  and  carrying value of the Partnership's interest in the
aircraft.

NOTE  6  -  LOAN  RECEIVABLE
----------------------------

On March 8, 2000, the Partnership and 10 affiliated partnerships (the ''Exchange
Partnerships'') collectively loaned $32 million to Echelon Residential Holdings,
a  newly  formed  real  estate company. Echelon Residential Holdings is owned by
several  investors,  including  James A. Coyne, Executive Vice President of EFG.
In  addition,  certain  affiliates  of the General Partner made loans to Echelon
Residential  Holdings  in  their  individual  capacities.
The  Partnership's  original  loan was $3,640,000. Echelon Residential Holdings,
through  a  wholly-owned  subsidiary  (Echelon  Residential  LLC), used the loan
proceeds  to  acquire  various  real  estate  assets  from Echelon International
Corporation, an unrelated Florida-based real estate company. The loan has a term
of  30 months, maturing on September 8, 2002, and an annual interest rate of 14%
for  the  first 24 months and 18% for the final six months. Interest accrues and
compounds  monthly  and  is  payable  at  maturity.  In  connection  with  the
transaction, Echelon Residential Holdings has pledged a security interest in all
of  its  right, title and interest in and to its membership interests in Echelon
Residential  LLC  to  the  Exchange  Partnerships  as  collateral.
The  summarized financial information for Echelon Residential Holdings as of and
for  the  periods  ended  June  30,  2001 and 2000, respectively, is as follows:
                                              (Unaudited)
                                  As  of  and  for  the  periods  ended
                                                 June 30,
<TABLE>
<CAPTION>

                                             2001          2000
                                         ------------  ------------
<S>                                      <C>           <C>
Total assets                             $79,159,776   $54,704,360
Total liabilities                        $85,455,528   $48,386,270
Minority interest                        $ 1,782,982   $ 2,527,750
Total equity (deficit)                   $(8,078,734)  $ 3,790,340

Total revenues                           $ 1,705,679   $   905,751
Total expenses, minority interest
  and equity in loss of unconsolidated
  joint venture                          $ 5,924,774   $ 2,593,700
Net loss                                 $(4,219,095)  $(1,687,949)
</TABLE>



During  the  second  quarter  of  2001,  the  General  Partner  determined  that
recoverability  of  the  loan  receivable had been impaired and at June 30, 2001
recorded  an  impairment  of  $318,500, reflecting the General Partner's current
assessment  of  the  amount  of  loss  that  is  likely  to  be  incurred by the
Partnership.  In  addition  to  the  write-down  recorded  at June 30, 2001, the
Partnership  reserved  all  accrued  interest  of  $590,772 recorded on the loan
receivable  through  March 31, 2001 and has ceased accruing interest on its loan
receivable  from  Echelon  Residential  Holdings,  effective  April  1,  2001.

The  write-down  was  precipitated principally by a slowing U.S. economy and its
effects  on  the real estate development industry.  The economic outlook for the
properties  that existed when the loan was funded has deteriorated and inhibited
the  ability  of  Echelon  Residential  Holdings'  management to secure low-cost
sources  of  development  capital, including but not limited to joint-venture or
equity partners.  In response to these developments and lower risk tolerances in
the  credit  markets,  the management of Echelon Residential Holdings decided in
the second quarter of 2001 to concentrate its prospective development activities
within  the southeastern United States and, therefore, to dispose of development
sites  located  elsewhere.  In May 2001, Echelon Residential Holdings closed its
Texas-based development office; and since the beginning of 2001, the company has
sold three of nine properties (two in July 2001 and one in October 2001).  As of
November  2001, one additional property is under contract to be sold, subject to
due  diligence  that  remains  pending.  As  a result of these developments, the
General  Partner does not believe that Echelon Residential Holdings will realize
the profit levels originally believed to be achievable from either selling these
properties  as  a  group  or  developing all of them as multi-family residential
communities.
NOTE  7  -  NET  INVESTMENT  IN  SALES-TYPE  LEASE
--------------------------------------------------

The  Partnership's  net  investment  in  a sales-type lease is the result of the
conditional  sale  of  the  Partnership's proportionate interest in a Boeing 737
aircraft  executed in October 2000. The title to the aircraft transfers to Royal
Aviation  Inc.,  at  the expiration of the lease term.  The sale of the aircraft
has  been  recorded  by the Partnership as a sales-type lease, with a lease term
expiring  in  January  2002.  For the three and six month periods ended June 30,
2001,  the Partnership recognized sales-type lease revenue of $3,351 and $6,702,
respectively,  from  this  lease.  At  June  30, 2001, the components of the net
investment  in  the  sales-type  lease  are  as  follows:
<TABLE>
<CAPTION>

<S>                                          <C>
Total minimum lease payments to be received  $137,418
Less: Unearned income                           8,375
                                             --------

  Total                                      $129,043
                                             ========
</TABLE>


Unearned  income  is being amortized to revenue over the lease term, expiring in
January  2002.

NOTE  8  -  RELATED  PARTY  TRANSACTIONS
----------------------------------------

All  operating expenses incurred by the Partnership are paid by EFG on behalf of
the  Partnership and EFG is reimbursed at its actual cost for such expenditures.
Fees  and  other costs incurred during the six month periods ended June 30, 2001
and  2000,  which  were  paid  or  accrued  by  the  Partnership  to  EFG or its
Affiliates,  are  as  follows:
<TABLE>
<CAPTION>


                                   2001      2000
                                 --------  --------
<S>                              <C>       <C>
Equipment management fees        $ 21,455  $ 12,901
Administrative charges             27,930    25,213
Reimbursable operating expenses
   due to third parties           287,872   221,782
                                 --------  --------

          Total                  $337,257  $259,896
                                 ========  ========
</TABLE>



All  rents  and  the  proceeds  from  the sale of equipment are paid directly to
either  EFG  or  to  a  lender.  EFG  temporarily  deposits collected funds in a
separate interest-bearing escrow account prior to remittance to the Partnership.
At June 30, 2001, the Partnership was owed $137,655 by EFG for such funds. These
funds  were  remitted  to  the  Partnership  in  July  2001.

The  discussion  of  the loan to Echelon Residential Holdings in Note 6 above is
incorporated  herein  by  reference.


NOTE  9  -  NOTE  PAYABLE
-------------------------

The  Partnership has one note payable outstanding at June 30, 2001 in the amount
of  $1,142,265.  This  installment note is non-recourse and is collateralized by
Partnership's  interest  in  an  aircraft leased to Aerovias de Mexico, S. A. de
C.V.  and  assignment  of the related lease payments.  This indebtedness bears a
fixed interest rate of 7.65%, principal is amortized monthly and the Partnership
has a balloon payment obligation at the expiration of the lease term of $404,138
in  September  2004.

In  February  2001,  the  Partnership and certain affiliated investment programs
(collectively  "the  Programs")  refinanced  the  outstanding  indebtedness  and
accrued interest related to the aircraft on lease to Aerovias de Mexico, S.A. de
C.V.  In  addition  to refinancing the Programs' total existing indebtedness and
accrued  interest  of $4,758,845, the Programs received additional debt proceeds
of  $3,400,177.  The  Partnership's  aggregate  share  of the refinanced and new
indebtedness  was  $1,211,860  including  $706,832  used  to  repay the existing
indebtedness  on the refinanced aircraft.  The Partnership used a portion of its
share of the additional proceeds of $505,028 to repay the outstanding balance of
the  indebtedness  and accrued interest related to the aircraft then on lease to
Finnair  OY  of  $130,852  and  certain  aircraft reconfiguration costs that the
Partnership  had  accrued  at  December  31,  2000.

Management  believes  that  the carrying amount of the note payable approximates
fair  value  at  June  30, 2001 based on its experience and understanding of the
market  for  instruments  with  similar  terms.

The  annual  maturities  of  the  note  payable  are  as  follows:
<TABLE>
<CAPTION>

<S>                           <C>    <C>
For the year ending June 30,   2002  $  214,125
                               2003     231,100
                               2004     249,412
                               2005     447,628
                                     ----------

  .                           Total  $1,142,265
                                     ==========
</TABLE>



NOTE  10  -  LEGAL  PROCEEDINGS
-------------------------------

As  described  more  fully  in  the  Partnership's  Annual Report on Form 10-K/A
Amendment  No.  2  for  the  year  ended December 31, 2000, the Partnership is a
Nominal  Defendant  in  a  Class  Action  Lawsuit,  the  outcome  of which could
significantly  alter the nature of the Partnership's organization and its future
business  operations.

On  March  12,  2001, after a status conference and hearing, the Court issued an
order that required the parties, no later than May 15, 2001, to advise the Court
on  (a) whether the Securities and Exchange Commission ("SEC") had completed its
review  of the solicitation statement and related materials submitted to the SEC
in  connection  with  the  proposed  settlement,  and  (b)  whether  the parties
requested  the  Court  to  schedule a hearing for final approval of the proposed
settlement  or  were  withdrawing  the  proposed  settlement  from  judicial
consideration  and  resuming  the  litigation  of  the  Plaintiffs'  claims.

On  May  11,  2001,  the  general  partners of the partnerships that are nominal
defendants in the Class Action Lawsuit received a letter dated May 10, 2001 from
the  Associate  Director  and  Chief  Counsel  of  the  Division  of  Investment
Management  of  the  SEC  informing  the  general partners that the staff of the
Division  believes  that  American  Income  Partners  V-A  Limited  Partnership,
American  Income  Partners V-B Limited Partnership, American Income Partners V-C
Limited  Partnership, American Income Partners V-D Limited Partnership, American
Income  Fund I-A, American Income Fund I-B, American Income Fund I-E and AIRFUND
II  International  Limited  Partnership  (the  "Designated  Partnerships")  are
investment  companies as defined in Section 3(a)(1)(c) of the Investment Company
Act of 1940, as amended (the "1940 Act").  The SEC staff noted that Section 7 of
the  1940  Act makes it unlawful for an unregistered investment company to offer
or  sell  or  purchase  any  security  or  engage  in any business in interstate
commerce.  Accordingly,  Section  7  would  prohibit  any partnership that is an
unregistered  investment  company  from  engaging  in any business in interstate
commerce,  except  transactions  that  are merely incidental to its dissolution.
The  letter also stated that the Division is considering enforcement action with
respect  to  this  matter.  Noting  that the parties to the Class Action Lawsuit
were  scheduled  to  appear  before  the  court in the near future to consider a
proposed settlement, and that the SEC staff's views, as expressed in the letter,
are relevant to the specific matters that will be considered by the court at the
hearing,  the SEC staff submitted the letter to the court for its consideration.

On  May  15,  2001,  Defendants' Counsel filed with the court Defendants' Status
Report  pursuant to the court's March 12, 2001 Order.  Defendants reported that,
notwithstanding  the  parties'  best  efforts,  the  staff  of  the  SEC has not
completed  its  review  of  the  solicitation  statement  in connection with the
proposed  settlement  of  the Class Action Lawsuit.  Nonetheless, the Defendants
stated their belief that the parties should continue to pursue the court's final
approval  of  the proposed settlement.  In this regard, the Defendants also have
maintained, on the advice of special 1940 Act counsel that, even if the 1940 Act
applies  to  the  Designated  Partnerships, the 1940 Act does not prohibit going
forward  with  the proposed settlement, as that transaction is merely incidental
to  a  dissolution  of  the  Partnerships  and  therefore  is not subject to the
prohibitions  of  Section  7  of  the  1940  Act.

The Defendants also referred to the SEC staff's letter of May 10, 2001 asserting
that  certain  of the partnerships are investment companies and special 1940 Act
counsel's  submissions  to  the SEC staff setting forth the reasons why the 1940
Act  does  not  apply  to  the  Designated Partnerships, noting that counsel had
informed  the  staff  of  the Division of Investment Management that, based upon
counsel's  understanding  of the surrounding circumstances and after an in-depth
analysis  of  the  applicable law, counsel is willing to issue an opinion of the
firm  that none of the partnerships is an investment company under the 1940 Act.
The  Defendants stated their belief that the proposed settlement is still viable
and  in  the  best  interests  of  the parties and that final approval should be
pursued.  The  Defendants  advised the court that they believe that if the court
were  to  address  the  issue  of  whether  or  not  the 1940 Act applies to the
partnerships  and the proposed consolidation, it could remove the major obstacle
to the settlement being finally consummated.  The Defendants also requested that
the  court schedule a hearing to address on a preliminary basis the objection to
the  proposed  settlement  raised  in  the  staff's  May  10,  2001  letter.

Plaintiffs'  Counsel  also submitted a Plaintiffs' Status Report to the court on
May  15,  2001 in which they reported that the SEC review has not been concluded
and  that  they notified the Defendants that they would not agree to continue to
stay  the  further  prosecution of the litigation in favor of the settlement and
that they intend to seek court approval to immediately resume active prosecution
of  the claims of the Plaintiffs.  Plaintiffs' Counsel stated in the Report that
the  "[p]laintiffs  continue  to  believe  that  the  settlement  is in the best
interests  of  the  Operating Partnership Sub-class.  However, since the SEC has
yet  to complete its review of the proxy, the Plaintiffs do not believe that the
litigation  should  continue  to  be  stayed  so  that  the SEC may continue its
regulatory  review  for  an  indefinite period of time."  Plaintiffs requested a
pre-trial  conference  to  schedule  filing  of  Plaintiffs'  motion  for  class
certification  on  or before May 29, 2001 and resumption of merits discovery and
discovery  related  to  the  class  certification  motion.

Subsequently,  after  a  status  conference  on May 31 2001, the court issued an
order  on  June 4, 2001 setting a trial date of March 4, 2002, referred the case
to mediation and referred discovery to a magistrate judge.   The Defendant's and
Plaintiff's  Counsel  have  continued  to negotiate toward a settlement and have
reached  agreement  as  to  its  principal  business  terms.  As  part  of  the
settlement, EFG has agreed to buy the loans made by the Exchange Partnerships to
Echelon  Residential  Holdings  for an aggregate of $32 million plus interest at
7.5%  per  annum, if they are not repaid prior to or at their scheduled maturity
date.  Upon  completion  of a stipulation of settlement, the parties will submit
the  settlement  to  the  court  for  approval.

There  can  be  no  assurance  that  a settlement of the sub-class involving the
Exchange  Partnerships  will  receive  final  Court  approval  and  be effected.
However,  in  the  absence  of  a  final  settlement  approved by the Court, the
Defendants  intend to defend vigorously against the claims asserted in the Class
Action Lawsuit.  Neither the General Partner nor its affiliates can predict with
any  degree of certainty the cost of continuing litigation to the Partnership or
the  ultimate  outcome.

<PAGE>




                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                                   FORM 10-Q/A

                          PART I. FINANCIAL INFORMATION



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

Certain  statements in this quarterly report of AIRFUND II International Limited
Partnership  (the  "Partnership")  that  are  not  historical  fact  constitute
"forward-looking  statements"  within  the  meaning  of  the  Private Securities
Litigation  Reform  Act  of  1995  and  are  subject  to  a variety of risks and
uncertainties.  There are a number of factors that could cause actual results to
differ  materially  from  those expressed in any forward-looking statements made
herein.  These factors include, but are not limited to, the outcome of the Class
Action  Lawsuit  described  in Note 10 to the accompanying financial statements,
the  remarketing  of  the  Partnership's  aircraft  and  the  performance of the
Partnership's  non-aircraft  assets.

The  Investment  Company Act of 1940 (the "1940 Act") places restrictions on the
capital  structure  and  business activities of companies registered thereunder.
The  Partnership  has  active  business  operations  in  the  financial services
industry,  including  equipment  leasing  and  the  loan  to Echelon Residential
Holdings  LLC ("Echelon Residential Holdings").  The Partnership does not intend
to  engage  in  investment  activities  in  a  manner or to an extent that would
require the Partnership to register as an investment company under the 1940 Act.
However,  it  is  possible that the Partnership may unintentionally engage in an
activity  or  activities  that  may be construed to fall within the scope of the
1940  Act.  The  General Partner is engaged in discussions with the staff of the
Securities  and  Exchange  Commission  ("SEC")  regarding  whether  or  not  the
Partnership  may  be  an  inadvertent investment company as a consequence of the
above-referenced  loan. If the Partnership were determined to be an unregistered
investment  company,  its  business  would  be adversely affected. The 1940 Act,
among  other  things, prohibits an unregistered investment company from offering
securities  for  sale  or  engaging  in any business in interstate commerce and,
consequently,  leases  and  contracts  entered  into  by  partnerships  that are
unregistered  investment  companies  may  be  voidable.  The General Partner has
consulted  counsel  and  believes  that  the  Partnership  is  not an investment
company.  The  General  Partner  has  determined  to  take  action  to avoid the
Partnership being deemed an investment company by disposing or acquiring certain
assets  that  it  might  not  otherwise  dispose  or  acquire.

On  May  11,  2001,  the  general  partners of the partnerships that are nominal
defendants in the Class Action Lawsuit received a letter dated May 10, 2001 from
the  Associate  Director  and  Chief  Counsel  of  the  Division  of  Investment
Management  of  the  SEC  informing  the  general partners that the staff of the
Division  believes  that  American  Income  Partners  V-A  Limited  Partnership,
American  Income  Partners V-B Limited Partnership, American Income Partners V-C
Limited  Partnership, American Income Partners V-D Limited Partnership, American
Income  Fund I-A, American Income Fund I-B, American Income Fund I-E and AIRFUND
II  International  Limited  Partnership  (the  "Designated  Partnerships")  are
investment  companies  as  defined  in  Section  3(a)(1)(c) of the 1940 Act. The
letter  also  stated  that  the  Division is considering enforcement action with
respect  to  this  matter.  Noting  that the parties to the Class Action Lawsuit
were  scheduled  to  appear  before  the  court in the near future to consider a
proposed settlement, and that the SEC staff's views, as expressed in the letter,
are relevant to the specific matters that will be considered by the court at the
hearing,  the SEC staff submitted the letter to the court for its consideration.

On  May  15,  2001,  Defendants' Counsel filed with the court Defendants' Status
Report  pursuant to the court's March 12, 2001 Order.  Defendants reported that,
notwithstanding  the  parties'  best  efforts,  the  staff  of  the  SEC has not
completed  its  review  of  the  solicitation  statement  in connection with the
proposed  settlement  of  the Class Action Lawsuit.  Nonetheless, the Defendants
stated their belief that the parties should continue to pursue the court's final
approval  of  the proposed settlement.  In this regard, the Defendants also have
maintained, on the advice of special 1940 Act counsel that, even if the 1940 Act
applies  to  the  Designated  Partnerships, the 1940 Act does not prohibit going
forward  with  the proposed settlement, as that transaction is merely incidental
to  a  dissolution  of  the  Partnerships  and  therefore  is not subject to the
prohibitions  of  Section  7  of  the  1940  Act.

The Defendants also referred to the SEC staff's letter of May 10, 2001 asserting
that  certain  of the partnerships are investment companies and special 1940 Act
counsel's  submissions  to  the SEC staff setting forth the reasons why the 1940
Act  does  not  apply  to  the  Designated Partnerships, noting that counsel had
informed  the  staff  of  the Division of Investment Management that, based upon
counsel's  understanding  of the surrounding circumstances and after an in-depth
analysis  of  the  applicable law, counsel is willing to issue an opinion of the
firm  that none of the partnerships is an investment company under the 1940 Act.
The  Defendants stated their belief that the proposed settlement is still viable
and  in  the  best  interests  of  the parties and that final approval should be
pursued.  The  Defendants  advised the court that they believe that if the court
were  to  address  the  issue  of  whether  or  not  the 1940 Act applies to the
partnerships  and the proposed consolidation, it could remove the major obstacle
to the settlement being finally consummated.  The Defendants also requested that
the  court schedule a hearing to address on a preliminary basis the objection to
the  proposed  settlement  raised  in  the  staff's  May  10,  2001  letter.

Plaintiffs'  Counsel  also submitted a Plaintiffs' Status Report to the court on
May  15,  2001 in which they reported that the SEC review has not been concluded
and  that  they notified the Defendants that they would not agree to continue to
stay  the  further  prosecution of the litigation in favor of the settlement and
that they intend to seek court approval to immediately resume active prosecution
of  the claims of the Plaintiffs.  Plaintiffs' Counsel stated in the Report that
the  "[p]laintiffs  continue  to  believe  that  the  settlement  is in the best
interests  of  the  Operating Partnership Sub-class.  However, since the SEC has
yet  to complete its review of the proxy, the Plaintiffs do not believe that the
litigation  should  continue  to  be  stayed  so  that  the SEC may continue its
regulatory  review  for  an  indefinite period of time."  Plaintiffs requested a
pre-trial  conference  to  schedule  filing  of  Plaintiffs'  motion  for  class
certification  on  or before May 29, 2001 and resumption of merits discovery and
discovery  related  to  the  class  certification  motion.

Subsequently,  after  a  status  conference  on May 31 2001, the court issued an
order  on  June 4, 2001 setting a trial date of March 4, 2002, referred the case
to mediation and referred discovery to a magistrate judge.   The Defendant's and
Plaintiff's  Counsel  have  continued  to negotiate toward a settlement and have
reached  agreement  as  to  its  principal  business  terms.  As  part  of  the
settlement, EFG has agreed to buy the loans made by the Exchange Partnerships to
Echelon  Residential  Holdings  for an aggregate of $32 million plus interest at
7.5%  per  annum, if they are not repaid prior to or at their scheduled maturity
date.  Upon  completion  of a stipulation of settlement, the parties will submit
the  settlement  to  the  court  for  approval.

There  can  be  no  assurance  that  a settlement of the sub-class involving the
Exchange  Partnerships  will  receive  final  Court  approval  and  be effected.
However,  in  the  absence  of  a  final  settlement  approved by the Court, the
Defendants  intend to defend vigorously against the claims asserted in the Class
Action Lawsuit.  Neither the General Partner nor its affiliates can predict with
any  degree of certainty the cost of continuing litigation to the Partnership or
the  ultimate  outcome.

The  loan  receivable from Echelon Residential Holdings was previously accounted
for  and  reported  in accordance with the guidance for Acquisition, Development
and  Construction  Arrangements  ("ADC  arrangements")  in  the  Partnership's
financial  statements as of and for three and six months ended June 30, 2001 and
2000.  The  loan was presented as an investment in a real estate venture and was
presented  net  of  the  Partnership's  share  of  losses in Echelon Residential
Holdings.  The  Partnership  was  allocated  its  proportionate  share  of  the
unconsolidated real estate venture's net loss, excluding the interest expense on
the  loan,  based  on the balance of its loan receivable in relation to the real
estate venture's total equity and notes payable, including the ADC arrangements.
Subsequent  to  the  issuance  of  the 2000 Form 10-K and the June 30, 2001 Form
10-Q,  the  Partnership  determined that the loan receivable should be accounted
for  consistent  with  its  legal  form and the Partnership should recognize the
interest  income,  as calculated per the contractual terms of the loan agreement
to the extent such interest income was evaluated as likely to be collected.  The
loan  receivable  and  related interest should be evaluated for impairment under
Statement of Financial Accounting Standards No. 114 "Accounting by Creditors for
Impairment  of  a  Loan".
Accordingly,  the  Partnership  reversed  the  proportionate  share of losses in
Echelon  Residential Holdings of  $83,806 and $158,509, respectively, previously
recorded  during  the  three  and six months ended June 30, 2001 and $19,775 and
$23,337,  respectively,  for  the three and six months ended June 30, 2000.  The
Partnership  also  recognized  interest income of $144,686 during the six months
ended  June  30, 2001 and $131,557 and $165,531, during the three and six months
ended  June  30,  2000,  respectively.

In  addition,  during the second quarter of 2001, the General Partner determined
that  recoverability  of  the  loan receivable had been impaired and at June 30,
2001  recorded  an  impairment  of  $318,500,  reflecting  the General Partner's
current  assessment  of  the amount of loss that is likely to be incurred by the
Partnership.  In  addition  to  the  write-down  recorded  at June 30, 2001, the
Partnership  reserved  all  accrued  interest  of  $590,772 recorded on the loan
receivable  through  March 31, 2001 and has ceased accruing interest on its loan
receivable  from  Echelon  Residential  Holdings,  effective  April  1,  2001.

The  write-down  was  precipitated principally by a slowing U.S. economy and its
effects  on  the real estate development industry.  The economic outlook for the
properties  that existed when the loan was funded has deteriorated and inhibited
the  ability  of  Echelon  Residential  Holdings'  management to secure low-cost
sources  of  development  capital, including but not limited to joint-venture or
equity partners.  In response to these developments and lower risk tolerances in
the  credit  markets,  the management of Echelon Residential Holdings decided in
the second quarter of 2001 to concentrate its prospective development activities
within  the southeastern United States and, therefore, to dispose of development
sites  located  elsewhere.  In May 2001, Echelon Residential Holdings closed its
Texas-based development office; and since the beginning of 2001, the company has
sold three of nine properties (two in July 2001 and one in October 2001).  As of
November  2001, one additional property is under contract to be sold, subject to
due  diligence  that  remains  pending.  As  a result of these developments, the
General  Partner does not believe that Echelon Residential Holdings will realize
the profit levels originally believed to be achievable from either selling these
properties  as  a  group  or  developing all of them as multi-family residential
communities.

These  adjustments  resulted in a net decrease in earnings for the three and six
months  ended June 30, 2001 of $825,466 and $606,077, respectively, or $0.29 and
$0.22, per limited partnership unit.  The adjustments resulted in a net increase
to  earnings  for  the  three and six months ended June 30, 2000 of $151,332 and
$188,868,  respectively,  or $0.05 and $0.07, per limited partnership unit. As a
result,  the  accompanying  financial  statements  for each of the three and six
months  ended June 30, 2001 and June 30, 2000 and the Partnership's Statement of
Financial  Position  as of December 31, 2000 have been restated from the amounts
previously  reported.

Three  and  six  months ended June 30, 2001 compared to the three and six months
--------------------------------------------------------------------------------
ended  June  30,  2000
----------------------

As  an  equipment  leasing partnership, the Partnership was organized to acquire
and  lease  a  portfolio  of commercial jet aircraft subject to lease agreements
with  third  parties.  During  1990  and  1991,  the  Partnership purchased four
commercial jet aircraft and a proportionate interest in two additional aircraft,
which  were  leased  by  major  carriers,  engaged  in passenger transportation.
Initially, each aircraft generated rental revenue pursuant to primary-term lease
agreements.  Subsequently,  all  of  the  aircraft in the Partnership's original
portfolio  have  been re-leased, renewed, exchanged for other aircraft, or sold.
At  June  30, 2001, the Partnership's equipment portfolio included proportionate
ownership  interests in three aircraft, two of which were on lease at that date.
The  Partnership also has two aircraft engines, which were off lease at June 30,
2001.  In  April  2001,  the  lease term for one of the aircraft expired and the
aircraft  was  returned  by the lessee (see discussion below).  The aircraft off
lease  and  the  remaining  aircraft, upon expiration of their lease agreements,
will  be  re-leased  or  sold  depending  on  prevailing market conditions.   In
addition,  in  2000  the  Partnership entered into a conditional sales agreement
related to its interest in an aircraft.  Presently, the Partnership is a Nominal
Defendant  in  a  Class Action Lawsuit, the outcome of which could significantly
alter  the  nature  of  the  Partnership's  organization and its future business
operations.  (See  Note  10 to the accompanying financial statements.)  Pursuant
to  the  Amended  and  Restated Agreement and Certificate of Limited Partnership
(the  "Restated  Agreement,  as  amended"),  the  Partnership is scheduled to be
dissolved  by  December  31,  2005.


Results  of  Operations
-----------------------

For  the  three  and  six  month  periods  ended  June 30, 2001, the Partnership
recognized  operating  lease  revenue  of  $155,113  and $311,108, respectively,
compared  to  $148,602 and $258,022, respectively, for the same periods in 2000.
The  net increase in operating lease revenue from 2000 to 2001 resulted from the
revenue  from  the  re-lease  of certain of the Partnership's aircraft partially
offset  by  an  aircraft  lease  expiration,  as discussed below. In the future,
operating lease revenue is expected to decline due to lease term expirations and
aircraft  sales.

The  lease term associated with a Boeing 737-2H4, in which the Partnership holds
an  ownership interest, expired in December 1999.  The aircraft was re-leased in
September  2000  to  Air  Slovakia  BWJ,  Ltd.,  with  a  lease term expiring in
September  2003.  The  Partnership recognized operating lease revenue of $58,995
for  the  six  month  period  ended  June  30,  2001  related  to this aircraft.

The  lease term associated with a McDonnell Douglas MD-82 aircraft, in which the
Partnership  holds an ownership interest, expired in January 2000.  The aircraft
was re-leased in September 2000 to Aerovias de Mexico S.A. de C.V., with a lease
term  expiring  in  September 2004.  The Partnership recognized lease revenue of
$147,044 and $29,095 related to this aircraft during the six month periods ended
June  30,  2001  and  2000,  respectively.

The General Partner is attempting to remarket the second McDonnell Douglas MD-82
aircraft, in which the Partnership holds an ownership interest.  This lease term
associated  with  this  aircraft  expired  in  April  2001  and  the aircraft is
currently  off  lease.  The  Partnership  recognized  operating lease revenue of
$105,068  and  $158,927  related  to  this aircraft during the six month periods
ended  June  30,  2001  and  2000,  respectively.

In  October  2000,  the  Partnership  and  certain  of its affiliates executed a
conditional  sales  agreement  with  Royal  Aviation  Inc.  for  the sale of the
Partnership's  interest in a Boeing 737-2H4 aircraft. This aircraft had been off
lease  from  January  2000  through  the date of the conditional sale in October
2000.  The  title  to  the  aircraft  transfers  to  Royal Aviation Inc., at the
expiration of the lease term.  The sale of the aircraft has been recorded by the
Partnership  as  a sales-type lease, with a lease term expiring in January 2002.
For  the  three  and  six  month  period  ended  June  30, 2001, the Partnership
recognized  sales-type  lease  revenue  of  $3,351  and  $6,702,  respectively.

The  Partnership's  aircraft  interests  represent  proportionate  ownership
interests.  In  such  cases,  the remaining interests are owned by an affiliated
equipment leasing program sponsored by Equis Financial Group Limited Partnership
("EFG").  The  Partnership and each affiliate individually report, in proportion
to  their  respective  ownership  interests,  their respective shares of assets,
liabilities,  revenues,  and  expenses  associated  with  the  aircraft.

Interest  income  for  the  three  and six month periods ended June 30, 2001 was
$38,022  and  $212,829,  respectively,  compared  to  $168,795  and  $269,705,
respectively,  for  the  same  periods  in  2000.  Interest  income is typically
generated  from  temporary  investment  of  rental  receipts  and equipment sale
proceeds  in  short-term  instruments  and  interest on the loan receivable from
Echelon  Residential  Holdings. The amount of future interest income is expected
to  fluctuate  as  a  result  of  changing interest rates and the amount of cash
available  for  investment,  among  other  factors.

The  loan  receivable from Echelon Residential Holdings was previously accounted
for  and  reported  in accordance with the guidance for Acquisition, Development
and  Construction  Arrangements  ("ADC  arrangements")  in  the  Partnership's
financial  statements as of and for the three and six months ended June 30, 2001
and  2000.  The loan was presented as an investment in a real estate venture and
was  presented  net  of the Partnership's share of losses in Echelon Residential
Holdings.  The  Partnership  was  allocated  its  proportionate  share  of  the
unconsolidated real estate venture's net loss, excluding the interest expense on
the  loan,  based  on the balance of its loan receivable in relation to the real
estate venture's total equity and notes payable, including the ADC arrangements.
Subsequent  to  the  issuance  of  the 2000 Form 10-K and the June 30, 2001 Form
10-Q,  the  Partnership  determined that the loan receivable should be accounted
for  consistent  with  its  legal  form and the Partnership should recognize the
interest  income,  as calculated per the contractual terms of the loan agreement
to the extent such interest income was evaluated as likely to be collected.  The
loan  receivable  and  related interest should be evaluated for impairment under
Statement of Financial Accounting Standards No. 114 "Accounting by Creditors for
Impairment  of  a  Loan".
Accordingly,  the  Partnership  reversed  the  proportionate  share of losses in
Echelon  Residential Holdings of  $83,806 and $158,509, respectively, previously
recorded  during  the  three  and six months ended June 30, 2001 and $19,775 and
$23,337,  respectively,  for  the three and six months ended June 30, 2000.  The
Partnership  also  recognized  interest income of $144,686 during the six months
ended  June  30, 2001 and $131,557 and $165,531, during the three and six months
ended  June  30,  2000,  respectively.

In  addition,  during the second quarter of 2001, the General Partner determined
that  recoverability  of  the  loan receivable had been impaired and at June 30,
2001  recorded  an  impairment  of  $318,500,  reflecting  the General Partner's
current  assessment  of  the amount of loss that is likely to be incurred by the
Partnership.  In  addition  to  the  write-down  recorded  at June 30, 2001, the
Partnership  reserved  all  accrued  interest  of  $590,772 recorded on the loan
receivable  through  March 31, 2001 and has ceased accruing interest on its loan
receivable  from  Echelon  Residential  Holdings,  effective April 1, 2001.  The
total  impairment  of  $909,272 is recorded as a write-down of impaired loan and
interest  receivable  in  the  accompanying Statement of Operations for the nine
months  ended  September  30,  2001.

The  write-down  was  precipitated principally by a slowing U.S. economy and its
effects  on  the real estate development industry.  The economic outlook for the
properties  that existed when the loan was funded has deteriorated and inhibited
the  ability  of  Echelon  Residential  Holdings'  management to secure low-cost
sources  of  development  capital, including but not limited to joint-venture or
equity partners.  In response to these developments and lower risk tolerances in
the  credit  markets,  the management of Echelon Residential Holdings decided in
the second quarter of 2001 to concentrate its prospective development activities
within  the southeastern United States and, therefore, to dispose of development
sites  located  elsewhere.  In May 2001, Echelon Residential Holdings closed its
Texas-based development office; and since the beginning of 2001, the company has
sold three of nine properties (two in July 2001 and one in October 2001).  As of
November  2001, one additional property is under contract to be sold, subject to
due  diligence  that  remains  pending.  As  a result of these developments, the
General  Partner does not believe that Echelon Residential Holdings will realize
the profit levels originally believed to be achievable from either selling these
properties  as  a  group  or  developing all of them as multi-family residential
communities.

These  adjustments  resulted in a net decrease in earnings for the three and six
months  ended June 30, 2001 of $825,466 and $606,077, respectively, or $0.29 and
$0.22, per limited partnership unit.  The adjustments resulted in a net increase
to  earnings  for  the  three and six months ended June 30, 2000 of $151,332 and
$188,868,  respectively,  or $0.05 and $0.07, per limited partnership unit. As a
result,  the  accompanying  financial  statements  for each of the three and six
months  ended June 30, 2001 and June 30, 2000 and the Partnership's Statement of
Financial  Position  as of December 31, 2000 have been restated from the amounts
previously  reported.

Other  income  for  the  three  and six months ended June 30, 2000, reflects the
receipt  of  $245,977  of unused aircraft maintenance reserves related to a sold
aircraft  and  $55,000  for  the sale of certain aircraft records, respectively.

In  May  2000,  the  Partnership  sold  its  Boeing  727-251  ADV  aircraft to a
third-party  for  proceeds  of $750,000.  This aircraft was fully depreciated at
the  time of sale, resulting in a net gain, for financial statement purposes, of
$750,000  for  the  three  and  six  months  ended  June  30,  2000.

The  ultimate  realization of residual value for the Partnership's aircraft will
be dependent upon many factors, including EFG's ability to sell and re-lease the
aircraft.  Changing  market conditions, industry trends, technological advances,
and many other events can converge to enhance or detract from aircraft values at
any  given time.  EFG attempts to monitor these changes and the airline industry
in  general  in order to identify opportunities which may be advantageous to the
Partnership  and  which  will  maximize  total  cash  returns for each aircraft.

The  total  economic  value  realized upon final disposition of each aircraft is
comprised  of  all  primary  lease  term  revenue  generated from that aircraft,
together with its residual value.  The latter consists of cash proceeds realized
upon  the  aircraft's  sale in addition to all other cash receipts obtained from
renting  the  aircraft  on  a  re-lease,  renewal  or  month-to-month  basis.
Consequently, the amount of gain or loss reported in the financial statements is
not  necessarily indicative of the total residual value the Partnership achieved
from  leasing  the  aircraft.

For the three and six month period ended June 30, 2001, the Partnership incurred
interest  expense  of $31,637 and $49,030, respectively, compared to $23,388 and
$54,073  for  the  same  periods  in 2000.  In the future, interest expense will
decline  as  the  principal  balance  of the note payable is reduced through the
application  of  rent  receipts  to  the  outstanding  debt.

Management  fees  were  $10,705 and $21,455, respectively, for the three and six
month  periods ended June 30, 2001 and $7,430 and $12,901, respectively, for the
same  periods  in  2000.

Operating  expenses  were  $174,370  and  $315,802  for  the three and six month
periods ended June 30, 2001, respectively, compared to $130,718 and $246,995 for
the  same  periods  in  2000. In 2001, operating expenses included approximately
$59,000  related  to  the  Class  Action  Lawsuit  discussed  in  Note 10 to the
financial  statements  herein.  Other  operating expenses consist principally of
administrative  charges,  professional  service  costs,  such as audit and other
legal  fees,  as  well  as  insurance,  printing,  distribution  and remarketing
expenses.  In  certain cases, equipment storage or repairs and maintenance costs
may  be  incurred  in  connection  with  equipment  being  remarketed.

Depreciation  expense  was $65,345 and $130,691, respectively, for the three and
six  month  periods  ended  June  30,  2001  compared  to  $79,837 and $159,674,
respectively,  for the same periods in 2000.  During the three months ended June
30,  2001, the Partnership also recorded a write-down of equipment, representing
an impairment to the carrying value of the Partnership's interest in a McDonnell
Douglas  MD-82  aircraft  returned  in  April 2001 and currently off lease.  The
resulting  charge  of $125,000 was based on a comparison of estimated fair value
and  carrying value of the Partnership's interest in the aircraft.  The estimate
of  the  fair  value  was  based  on  (i)  information provided by a third-party
aircraft  broker  and  (ii) EFG's assessment of prevailing market conditions for
similar  aircraft.  Aircraft  condition,  age,  passenger  capacity,  distance
capability,  fuel  efficiency,  and  other  factors  influence market demand and
market  values  for  passenger  jet  aircraft.

Liquidity  and  Capital  Resources  and  Discussion  of  Cash  Flows
--------------------------------------------------------------------

The  Partnership  by  its  nature  is  a limited life entity.  The Partnership's
principal  operating  activities  derive  from  aircraft  rental  transactions.
Accordingly,  the  Partnership's  principal  source  of  cash from operations is
provided  by  the  collection of periodic rents.  These cash inflows are used to
satisfy  debt  service  obligations associated with leveraged leases, and to pay
management  fees and operating costs.  Operating activities generated a net cash
inflow  of $145,958 and $43,278 for the six months ended June 30, 2001 and 2000,
respectively.  Overall,  expenses  associated  with  rental  activities, such as
management fees, and net cash flow from operating activities will decline as the
Partnership  remarkets  its  aircraft. The Partnership, however, may continue to
incur significant costs to facilitate the successful remarketing of its aircraft
in  the  future.  Ultimately, the Partnership will dispose of all aircraft under
lease.  This  will  occur  principally  through  sale  transactions whereby each
aircraft  will  be  sold to the existing lessee or to a third party.  Generally,
this  will  occur upon expiration of each aircraft's primary or renewal/re-lease
term.  The loan to Echelon Residential Holdings and accrued interest thereon are
due  in  full  at  maturity  on  September  8,  2002.

Cash  realized  for  asset  disposal  transactions  is  reported under investing
activities  on  the  accompanying  Statement  of Cash Flows.  For the six months
ended  June  30,  2000,  the  Partnership  realized  $750,000 in equipment sales
proceeds.  There  were no equipment sales in the six months ended June 30, 2001.
Future  inflows  of  cash from aircraft disposals will vary in timing and amount
and  will  be  influenced  by  many  factors  including, but not limited to, the
frequency  and  timing  of  lease  expirations, the type of aircraft being sold,
their  condition  and  age,  and  future  market  conditions.

At  June  30,  2001,  the  Partnership  was  due  aggregate future minimum lease
payments  of  $1,324,345  from  contractual  operating  and  sales-type  lease
agreements  (see Note 4 to the financial statements), a portion of which will be
used  to  amortize  the principal balance of the note payable of $1,142,265 (see
Note  9 to the financial statements).  At the expiration of the individual lease
term underlying the Partnership's future minimum lease payments, the Partnership
will  sell  the  aircraft  or  enter  into  a re-lease or renewal agreement when
considered  by  advantageous  by  the  General Partner or EFG.  In addition, the
General  Partner  and EFG are attempting to remarket the McDonnell-Douglas MD-82
aircraft  and  the  two  aircraft  engines  that  are currently off lease.  Such
remarketing activities will result in the realization of additional cash inflows
in the form of sale proceeds or rents from renewals or re-leases, the timing and
extent  of  which cannot be predicted with certainty. This is because the timing
and extent of remarketing events often is dependent upon the needs and interests
of  the  existing  lessees.  Some  lessees  may  choose  to  renew  their  lease
contracts,  while  others  may  elect  to  return  the  aircraft.  In the latter
instances,  the aircraft could be re-leased to another lessee or sold to a third
party.

In connection with a preliminary settlement agreement for a Class Action Lawsuit
described  in  Note  10  to  the  financial  statements, the court permitted the
Partnership  to  invest  in any new investment, including but not limited to new
equipment or other business activities, subject to certain limitations. On March
8,  2000,  the  Partnership  loaned  $3,640,000  to  a  newly formed real estate
company, Echelon Residential Holdings, to finance the acquisition of real estate
assets  by  that  company.  Echelon Residential Holdings, through a wholly owned
subsidiary  ("Echelon  Residential LLC"), used the loan proceeds, along with the
loan proceeds from similar loans by ten affiliated partnerships representing $32
million  in  the  aggregate,  to acquire various real estate assets from Echelon
International  Corporation,  an  independent  Florida-based real estate company.
Echelon  Residential  Holding's  interest  in Echelon Residential LLC is pledged
pursuant  to a pledge agreement to the partnerships as collateral for the loans.
The  loan  has a term of 30 months, maturing on September 8, 2002, and an annual
interest  rate  of 14% for the first 24 months and 18% for the final six months.
Interest  accrues  and  compounds  monthly  and  is  payable  at  maturity.

The  loan  made  by the Partnership to Echelon Residential Holdings is, and will
continue  to  be,  subject  to  various  risks, including the risk of default by
Echelon  Residential  Holdings, which could require the Partnership to foreclose
under  the  pledge  agreement  on  its interests in Echelon Residential LLC. The
ability of Echelon Residential Holdings to make loan payments and the amount the
Partnership  may  realize  after  a  default  would  be dependent upon the risks
generally  associated  with  the real estate lending business including, without
limitation,  the existence of senior financing or other liens on the properties,
general  or  local economic conditions, property values, the sale of properties,
interest  rates,  real  estate  taxes,  other operating expenses, the supply and
demand  for  properties involved, zoning and environmental laws and regulations,
rent  control  laws  and  other  governmental  rules.  A  default  by  Echelon
Residential  Holdings  could  have  a material adverse effect on the future cash
flow  and  operating  results  of  the  Partnership.

In  addition,  during the second quarter of 2001, the General Partner determined
that  recoverability  of  the  loan receivable had been impaired and at June 30,
2001  recorded  an  impairment  of  $318,500,  reflecting  the General Partner's
current  assessment  of  the amount of loss that is likely to be incurred by the
Partnership.  In  addition  to  the  write-down  recorded  at June 30, 2001, the
Partnership  reserved  all  accrued  interest  of  $590,772 recorded on the loan
receivable  through  March 31, 2001 and has ceased accruing interest on its loan
receivable  from  Echelon  Residential  Holdings,  effective  April  1,  2001.

The  write-down  was  precipitated principally by a slowing U.S. economy and its
effects  on  the real estate development industry.  The economic outlook for the
properties  that existed when the loan was funded has deteriorated and inhibited
the  ability  of  Echelon  Residential  Holdings'  management to secure low-cost
sources  of  development  capital, including but not limited to joint-venture or
equity partners.  In response to these developments and lower risk tolerances in
the  credit  markets,  the management of Echelon Residential Holdings decided in
the second quarter of 2001 to concentrate its prospective development activities
within  the southeastern United States and, therefore, to dispose of development
sites  located  elsewhere.  In May 2001, Echelon Residential Holdings closed its
Texas-based development office; and since the beginning of 2001, the company has
sold three of nine properties (two in July 2001 and one in October 2001).  As of
November  2001, one additional property is under contract to be sold, subject to
due  diligence  that  remains  pending.  As  a result of these developments, the
General  Partner does not believe that Echelon Residential Holdings will realize
the profit levels originally believed to be achievable from either selling these
properties  as  a  group  or  developing all of them as multi-family residential
communities.

The  Restated Agreement, as amended, prohibits the Partnership from making loans
to  the General Partner or its affiliates.  Since the acquisition of the several
parcels  of  real  estate  from the owner had to occur prior to the admission of
certain independent third parties as equity owners, Echelon Residential Holdings
and  its  wholly  owned  subsidiary,  Echelon  Residential  LLC,  were formed in
anticipation  of  their  admission.  The General Partner agreed to an officer of
the Manager serving as the initial equity holder of Echelon Residential Holdings
and  as  an  unpaid  manager of Echelon Residential Holdings. The officer made a
$185,465  equity  investment in Echelon Residential Holdings.  His return on his
equity  investment  is restricted to the same rate of return as the partnerships
realize  on  their  loans.  There  is  a  risk  that the court may object to the
general  partner's  action in structuring the loan in this way since the officer
may be deemed an affiliate and the loans in violation of the prohibition against
loans  to  affiliates  and  the  court's  statement  in its order permitting New
Investments  that  all  other provisions of the Partnership Agreements governing
the  investment  objectives and policies of the Partnership shall remain in full
force  and  effect.  The  court  may  require the partnerships to restructure or
divest  the  loan.

The  Partnership  obtained  long-term  financing  in  connection  with  certain
aircraft.  The origination of such indebtedness and the subsequent repayments of
principal are reported as components of financing activities in the accompanying
Statement  of  Cash  Flows.  The  Partnership's  outstanding  loan  agreement is
recourse  only  to  the  specific  aircraft  financed  and to the minimum rental
payments  contracted  to  be received during the debt amortization period (which
coincides  with the lease term).  As rental payments are collected, a portion or
all  of the rental payment is used to repay associated indebtedness.  See Note 9
to  the  financial statements for the annual maturities of the note payable.  In
addition,  the  Partnership has a balloon payment obligation as discussed below.

In  February  2001, the Partnership's and certain affiliated investment programs
collectively,  (the  "Programs")  refinanced  the  outstanding  indebtedness and
accrued  interest  related  to  the  aircraft.  In  addition  to refinancing the
Programs'  total  existing  indebtedness and accrued interest of $4,758,845, the
Programs  received  additional  debt  proceeds of $3,400,177.  The Partnership's
aggregate  share of the refinanced and new indebtedness was $1,211,860 including
$706,832  used  to  repay  the existing indebtedness on the refinanced aircraft.
The  Partnership  used  a  portion  of  its  share of the additional proceeds of
$505,028  to  repay  the  outstanding  balance  of  the indebtedness and accrued
interest  related  to  the  aircraft then on lease to Finnair OY of $130,852 and
certain  aircraft  reconfiguration  costs  that  the  Partnership had accrued at
December  31,  2000.  The new indebtedness bears a fixed interest rate of 7.65%,
principal  is  amortized  monthly  and  the  Partnership  has  a balloon payment
obligation  at  the  expiration of the lease term of $404,138 in September 2004.
In  the  six  months  ended  June  30,  2000,  the  Partnership  refinanced  the
indebtedness  associated  with  the same aircraft and in addition to refinancing
the  existing  indebtedness,  received  additional  debt  proceeds  of $201,247.

There  are no formal restrictions under the Restated Agreement, as amended, that
materially  limit  the  Partnership's  ability to pay cash distributions, except
that  the General Partner may suspend or limit cash distributions to ensure that
the  Partnership  maintains  sufficient working capital reserves to cover, among
other  things, operating costs and potential expenditures, such as refurbishment
costs  to  remarket  aircraft upon lease expiration. In addition to the need for
funds  in  connection  with  the  Class  Action Lawsuit, liquidity is especially
important  as  the Partnership matures and sells aircraft, because the remaining
aircraft portfolio consists of fewer revenue-producing assets that are available
to  cover  prospective cash disbursements.  Insufficient liquidity could inhibit
the  Partnership's ability to sustain its operations or maximize the realization
of  proceeds  from  remarketing  its  remaining  aircraft.

The  management  and  remarketing  of  aircraft can involve, among other things,
significant  costs  and  lengthy  remarketing  initiatives.  Although  the
Partnership's lessees are required to maintain the aircraft during the period of
lease  contract,  repair,  maintenance,  and/or  refurbishment  costs  at  lease
expiration can be substantial.  For example, an aircraft that is returned to the
Partnership  meeting  minimum  airworthiness  standards, such as flight hours or
engine  cycles,  nonetheless may require heavy maintenance in order to bring its
engines,  airframe  and  other  hardware  up  to  standards that will permit its
prospective  use  in  commercial  air  transportation.

At  June  30,  2001,  the  Partnership's  equipment portfolio included ownership
interests  in  three  commercial  jet  aircraft,  one  of  which is a Boeing 737
aircraft.  The  Boeing  737  aircraft  is a Stage 2 aircraft, meaning that it is
prohibited  from  operating  in the United States unless it is retro-fitted with
hush-kits  to meet Stage 3 noise regulations promulgated by the Federal Aviation
Administration.  During  2000,  the  aircraft was re-leased to Air Slovakia BWJ,
Ltd.  through  September  2003.The  remaining  two aircraft in the Partnership's
portfolio already are Stage 3 compliant.  One of these aircraft has a lease term
expiring  in  September  2004 and the remaining aircraft is currently off lease.

Recent  changes  in  economic  condition  of the airline industry have adversely
affected  the  demand  for and market values for commercial jet aircraft.  These
changes  could  adversely  affect  the  operations  of  the  Partnership and the
residual value of the commercial jet aircraft.  Currently, all of commercial jet
aircraft  in  which  the  Partnership has a proportionate ownership interest are
subject to contracted lease agreements except one McDonnell Douglas MD-82, which
was  returned  to  the  General Partner upon its lease expiration in April 2001.
The  General  Partner  is  attempting  to  remarket  this  aircraft.

In  any  given  year,  it  is  possible that Recognized Owners will be allocated
taxable  income  in  excess  of  distributed cash.  This discrepancy between tax
obligations  and  cash  distributions may or may not continue in the future, and
cash  may  or  may  not  be  available for distribution to the Recognized Owners
adequate  to  cover  any  tax  obligation.

The  Partnership's  capital  account  balances  for  federal  income tax and for
financial reporting purposes are different primarily due to differing treatments
of  income  and expense items for income tax purposes in comparison to financial
reporting  purposes  (generally  referred to as permanent or timing differences;
see  Note  9  to  the  financial  statements presented in the Partnership's 2000
Annual Report).  For instance, selling commissions and organization and offering
costs  pertaining  to syndication of the Partnership's limited partnership units
are  not  deductible  for  federal  income  tax  purposes, but are recorded as a
reduction  of  partners'  capital  for financial reporting purposes.  Therefore,
such  differences  are  permanent  differences  between  capital  accounts  for
financial  reporting and federal income tax purposes.  Other differences between
the  bases  of  capital  accounts for federal income tax and financial reporting
purposes occur due to timing differences consisting of the cumulative difference
between  income or loss for tax purposes and financial statement income or loss.
The principal component of the cumulative difference between financial statement
income  or  loss  and  tax  income  or  loss results from different depreciation
policies  for  book  and  tax  purposes.

For  financial reporting purposes, the General Partner has accumulated a capital
deficit at June 30, 2001.  This is the result of aggregate cash distributions to
the  General  Partner  being in excess of its capital contribution of $1,000 and
its  allocation  of  financial  statement  net  income or loss.  Ultimately, the
existence  of  a capital deficit for the General Partner for financial reporting
purposes is not indicative of any further capital obligations to the Partnership
by  the General Partner.  The Restated Agreement, as amended, requires that upon
the  dissolution  of  the  Partnership,  the General Partner will be required to
contribute to the Partnership an amount equal to any negative balance, which may
exist  in  the General Partner's tax capital account.  At December 31, 2000, the
General  Partner  had  a  positive  tax  capital  account  balance.

The  Partnership  is  a Nominal Defendant in a Class Action Lawsuit described in
Note  10  to  the  accompanying  financial statements.  The General Partner will
continue  to  suspend  the payment of quarterly cash distributions pending final
resolution  of the Class Action Lawsuit.  Accordingly, future cash distributions
are  not  expected  to  be  paid  until  the  Class Action Lawsuit is settled or
adjudicated.


Item  3.  Quantitative  and  Qualitative  Disclosures  about  Market  Risk
--------------------------------------------------------------------------

The  Partnership's  financial  statements include financial instruments that are
exposed  to  interest  rate  risks.

The Partnership has one note payable outstanding at June 30, 2001, which bears a
fixed interest rate of 7.65%.  The fair market value of fixed interest rate debt
may  be  adversely  impacted due to a decrease in interest rates.  The effect of
interest  rate  fluctuations on the Partnership in the six months ended June 30,
2001  was  not  material.

The  Partnership's  loan to Echelon Residential Holdings matures on September 8,
2002  and  earns  interest at a fixed annual rate of 14% for the first 24 months
and  a fixed annual rate of 18% for the last 6 months of the loan, with interest
due  at  maturity.  The  effect of interest rate fluctuations on the Partnership
for  the  six  months  ended  June  30,  2001  was  not  material.

<PAGE>

                  AIRFUND II INTERNATIONAL LIMITED PARTNERSHIP

                                   FORM 10-Q/A

                           PART II.  OTHER INFORMATION


<TABLE>
<CAPTION>



<S>           <C>

  Item 1.     Legal Proceedings
  .           Response:

  .           Refer to Note 10 to the financial statements herein.

  Item 2.     Changes in Securities
  .           Response:  None

  Item 3.     Defaults upon Senior Securities
  .           Response:  None

  Item 4.     Submission of Matters to a Vote of Security Holders
  .           Response:  None

  Item 5.     Other Information
  .           Response:  None

  Item 6(a).  Exhibits
  .           Response:  None

  Item 6(b).  Reports on Form 8-K
  .           Response:  None
</TABLE>






<PAGE>

                                 SIGNATURE PAGE




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.



                  AIRFUND II International Limited Partnership


By:        AFG  Aircraft  Management  Corporation,  a
             Massachusetts  corporation  and  the  General
             Partner  of  the  Registrant.


By:        /s/  Michael  J.  Butterfield
            ----------------------------
             Michael  J.  Butterfield
             Treasurer  of  AFG  Aircraft  Management  Corporation
             (Duly  Authorized  Officer  and
             Principal  Financial  and  Accounting  Officer)


Date:     November  13,  2001
          -------------------