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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended June 30, 2004

or

o TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_________ to_________

Commission file number 000-18547

INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP



North Carolina
(State or other jurisdiction of
incorporation or organization)
    
    56-1669199
(I.R.S. Employer
Identification No.)


WACHOVIA SECURITIES, NC0170
301 S. COLLEGE ST.  17TH FLOOR
CHARLOTTE, NC 28288-0170
(Address of principal executive offices)
(Zip Code)

(704) 383-7918
(Registrants telephone number, including area code)

NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last report)

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

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes
o     No
x

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

Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by
Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court. Yes o     No o

APPLICABLE ONLY TO CORPORATE ISSUERS:

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





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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
(a North Carolina limited partnership)Form 10-Q

FORWARD LOOKING STATEMENTS



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Statements in this Quarterly Report on Form 10-Q include forward looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the Securities Act) and Section 21E of the Securities Act of 1934,
as amended (the Exchange Act). Forward looking statements include statements
concerning our plans, objectives, goals, strategies, future events, future
revenues or performance, capital expenditures, financing needs, plans or
intentions relating to acquisitions, our competitive strengths and weaknesses,
our business strategy and the trends we anticipate in the industry and
economies in which we operate and other information that is not historical
information. You can identify a forward looking statement by our use of the
words anticipate, estimate, expect, intend, plan, may, will,
continue, believe, objective, projection, forecast, goal, and
similar expressions. No assurance can be given that actual results or events
will not differ materially from those projected, estimated, assumed or
anticipated in any such forward looking statements.

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PART I. FINANCIAL INFORMATION

ITEM 1  FINANCIAL STATEMENTS

INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
(a North Carolina limited partnership)

BALANCE SHEETS
(Unaudited)

June 30, 2004 and December 31, 2003






June 30,
    
    December 31,2004
    
    2003ASSETSUnimproved land held for investment purposes
    
    $
    1,911,500
    
    
    
    1,911,500Cash and cash equivalents
    
    
    60,517
    
    
    
    60,261Total assets
    
    $
    1,972,017
    
    
    
    1,971,761LIABILITIES AND PARTNERS CAPITALLiabilitiesAccrued expenses
    
    
    556
    
    
    
    3,882Due to general partner
    
    
    64,308
    
    
    
    1,991Total liabilities
    
    
    64,864
    
    
    
    5,873Partners CapitalClass A limited partners interest
    
    
    1,907,310
    
    
    
    1,966,038(authorization, 9,588 units; issued and
outstanding, 7,650 units in 2004 and 2003)Subordinated limited partner interest
    
    
    67
    
    
    
    69General partners capital deficiency
    
    
    (224
    )
    
    
    (219
    )Total partners capital
    
    
    1,907,153
    
    
    
    1,965,888Total liabilities and partners capital
    
    $
    1,972,017
    
    
    
    1,971,761


See accompanying notes to financial statements.

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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
(a North Carolina limited partnership)

STATEMENTS OF OPERATIONS
(Unaudited)

Three Months and Six Months Ended June 30, 2004 and 2003






Three Months Ended June 30,
    
    Six Months Ended June 30,2004
    
    2003
    
    2004
    
    2003OPERATING REVENUEInterest
    
    $
    127
    
    
    
    53
    
    
    
    255
    
    
    
    173Total operating revenue
    
    
    127
    
    
    
    53
    
    
    
    255
    
    
    
    173OPERATING EXPENSEProfessional fees
    
    
    14,098
    
    
    
    9,177
    
    
    
    56,814
    
    
    
    22,901Property tax
    
    
    28
    
    
    
    
    
    
    
    56
    
    
    
    10General and administrative
    
    
    1,800
    
    
    
    1,460
    
    
    
    2,120
    
    
    
    2,125Total operating expense
    
    
    15,926
    
    
    
    10,637
    
    
    
    58,990
    
    
    
    25,036Net loss
    
    $
    (15,799
    )
    
    
    (10,584
    )
    
    
    (58,735
    )
    
    
    (24,863
    )NET LOSS ALLOCATED TOClass A limited partners
    
    $
    (15,797
    )
    
    
    (10,583
    )
    
    
    (58,728
    )
    
    
    (24,861
    )Subordinated limited partner
    
    
    (1
    )
    
    
    
    
    
    
    (2
    )
    
    
    General partners
    
    
    (1
    )
    
    
    (1
    )
    
    
    (5
    )
    
    
    (2
    )Net loss
    
    $
    (15,799
    )
    
    
    (10,584
    )
    
    
    (58,735
    )
    
    
    (24,863
    )Weighted average Class A limited
partnership units outstanding
    
    
    7,650
    
    
    
    7,650
    
    
    
    7,650
    
    
    
    7,650Net loss per weighted average Class A
limited partnership unit
    
    $
    (2.07
    )
    
    
    (1.38
    )
    
    
    (7.68
    )
    
    
    (3.25
    )


See accompanying notes to financial statements.

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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
(a North Carolina limited partnership)

STATEMENTS OF PARTNERS CAPITAL
(Unaudited)

Six Months Ended June 30, 2004 and 2003






Class A Limited Partners
    
    SubordinatedLimited
    
    GeneralUnits
    
    Capital
    
    Partner
    
    Partners
    
    TotalPartners capital (deficiency),December 31, 2002
    
    
    7,650
    
    
    $
    2,008,747
    
    
    
    70
    
    
    
    (215
    )
    
    
    2,008,602Net loss
    
    
    
    
    
    
    (24,861
    )
    
    
    
    
    
    
    (2
    )
    
    
    (24,863
    )Partners capital (deficiency),June 30, 2003
    
    
    7,650
    
    
    
    1,983,886
    
    
    
    70
    
    
    
    (217
    )
    
    
    1,983,739Partners capital (deficiency),December 31, 2003
    
    
    7,650
    
    
    
    1,966,038
    
    
    
    69
    
    
    
    (219
    )
    
    
    1,965,888Net loss
    
    
    
    
    
    
    (58,728
    )
    
    
    (2
    )
    
    
    (5
    )
    
    
    (58,735
    )Partners capital (deficiency),June 30, 2004
    
    
    7,650
    
    
    $
    1,907,310
    
    
    
    67
    
    
    
    (224
    )
    
    
    1,907,153


See accompanying notes to financial statements.

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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
(a North Carolina limited partnership)

STATEMENTS OF CASH FLOWS
(Unaudited)

Six Months Ended June 30, 2004 and 2003






Six Months Ended June
30,2004
    
    2003OPERATING ACTIVITIESNet loss
    
    $
    (58,735
    )
    
    
    (24,863
    )Adjustments to reconcile net loss to net cash
provided by operating activitiesIncrease in due to general partner  related party
    
    
    62,317
    
    
    
    24,776Increase (decrease) in accrued expenses
    
    
    (3,326
    )
    
    
    260Net cash provided by operating activities
    
    
    256
    
    
    
    173Increase in cash and cash equivalents
    
    
    256
    
    
    
    173Cash and cash equivalents, beginning of period
    
    
    60,261
    
    
    
    97,478Cash and cash equivalents, end of period
    
    $
    60,517
    
    
    
    97,651


See accompanying notes to financial statements.

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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
(a North Carolina limited partnership)

NOTE TO FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2004 and 2003




NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION

Interstate Land Investors II Limited Partnership (Registrant or
Partnership) is a North Carolina limited partnership. The Partnerships
business consists of holding for investment, disposing and otherwise dealing in
approximately 48 acres of undeveloped land (the Property) located in York
County, South Carolina.

The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, the financial statements do not
include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. The unaudited
financial statements of the Registrant, include, in the opinion of management,
all adjustments (consisting only of normal recurring adjustments) necessary for
a fair presentation of such financial statements for all periods presented.
The financial position and results of operations as of and for the three months
and six months ended June 30, 2004, are not necessarily indicative of the
results of operations that may be expected in the future.

Please refer to the Registrants 2003 Annual Report on Form 10-K for
additional information related to the Registrants organization and to the
Registrants audited financial statements for the two years ended December 31,
2003, including the related notes to financial statements.

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

LIQUIDITY AND CAPITAL RESOURCES.

As of June 30, 2004, the Registrant had $60,517 in cash and cash
equivalents. The Registrant will retain this cash to pay ongoing partnership
expenses. Until the Registrant disposes of the remaining approximately 48
acres of Property, its only sources of additional capital are from general
partner advances or other borrowings.

As of June 30, 2004, the amount due to general partner was $64,308
compared to $1,991 on December 31, 2003. This increase from the end of 2003
was driven by expenses incurred by the Registrant during the first half of
2004.

RESULTS OF OPERATIONS.

Three months ended June 30, 2004

The Registrants net loss was $15,799 for the second quarter of 2004 as
compared to a net loss of $10,584 for the same period in 2003. The increased
loss for the current quarter was primarily due to higher professional fees.

Interest income of $127 for the second quarter 2004 increased from $53 for
the same quarter last year due to a higher interest rate paid for cash on hand
in 2004.

Professional fees increased to $14,098 in the second quarter of 2004
compared to $9,177 for the second quarter of 2003. This increase primarily
reflects higher database management fees.

Six months ended June 30, 2004

The Registrants net loss was $58,735 for the first six months of 2004 as
compared to a net loss of $24,863 for the same period in 2003. The increased
loss for the first six months of 2004 compared to the same period last year was
primarily due to higher professional fees.

Interest income of $255 for the first six months of 2004 increased from
$173 for the same period last year due to a higher interest rate paid for cash
on hand in 2004.

Professional fees increased to $56,814 for the first six months of 2004
compared to $22,901 for the same period in 2003. The increase reflects higher
accounting and legal fees as well as higher database management fees.

ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

ITEM 4  CONTROLS AND PROCEDURES.

As of June 30, 2004, the end of the period covered by this Quarterly
Report on Form 10-Q, the Registrants general partner (the Partnerships
principal executive officer and principal financial officer), acting through
its Senior Vice President, evaluated the effectiveness of the Registrants
disclosure controls and procedures (as defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934). Based upon that evaluation, the Senior Vice
President concluded that as of June 30, 2004, the end of the period covered by
this Quarterly Report on Form 10-Q, the Registrant maintained effective
disclosure controls and procedures. In addition, no change in the Registrants
internal control over financial reporting (as defined in Rule 13a-15(f) under
the Securities Exchange Act of 1934) occurred during the fiscal quarter to
which this Quarterly Report on Form 10-Q relates that has materially affected,
or is reasonably likely to materially affect, the Registrants internal control
over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY
SECURITIES.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

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

None.

ITEM 5. OTHER INFORMATION.

The remaining approximate 48 acres of the Property is listed for sale with
Grubb & Ellis Bissell Patrick.  Two Offers to Purchase have been received from potential buyers. The
first offer was received on June 29, 2004 for the purchase of Tract 1A which is
approximately 17 acres. A second offer was received on July 20, 2004 for the
purchase of both Tract 1A and Tract 1D, which comprise the remaining 48 acres
of the Property. The general partner is currently reviewing the merits of both
offers.

Effective
August 13, 2004, ISC Realty Corporation (ISCR), which is
the general partner of Interstate Land Investors II Limited
Partnership, was sold to Vineyard Capital LLC, which is a
wholly-owned limited-liability company of J. Christopher Boone, who
was a former President of ISCR.

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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits

Exhibit 31.1 Certification by Principal Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2 Certification by Principal Financial Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1 Certification by Principal Executive and Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

None.

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INTERSTATE LAND INVESTORS II LIMITED PARTNERSHIP
(a North Carolina limited partnership)

SIGNATURES

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

INTERSTATE LAND INVESTORS IILIMITED PARTNERSHIPBy: ISC REALTY CORPORATIONAs Principal Executive Officer,Principal Financial Officer, andPrincipal Accounting Officer of the RegistrantBy:
    
    /s/ Jeffrey K. HarpelJeffrey K. HarpelSenior Vice PresidentDate: August 13, 2004


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