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SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For quarterly period ended June 30, 2005
 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
    
    56-1669199(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 
 
 
 þ o
 o þ
 APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
 o o
 APPLICABLE ONLY TO CORPORATE ISSUERS:




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INTERSTATE
LAND INVESTORS II LIMITED PARTNERSHIP
 Form 10-Q
 FORWARD LOOKING STATEMENTS
  2




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PART I. FINANCIAL INFORMATION
 ITEM 1  FINANCIAL STATEMENTS
 INTERSTATE
LAND INVESTORS II LIMITED PARTNERSHIP
  BALANCE SHEETS
(Unaudited)
  June 30,
    
    
    December 31,2005
    
    
    2004ASSETSUnimproved land held for investment purposes
    
    $
    1,700,000
    
    
    
    1,700,000Cash and cash equivalents
    
    
    15,162
    
    
    
    11,327Total assets
    
    $
    1,715,162
    
    
    
    1,711,327LIABILITIES AND PARTNERS CAPITALLiabilitiesAccrued expenses
    
    
    16,117
    
    
    
    8,005Due to general partner
    
    
    89,118
    
    
    
    53,489Total liabilities
    
    
    105,235
    
    
    
    61,494Partners CapitalClass A limited partners interest
(authorization, 9,588 units; issued and
outstanding, 7,650 units in 2004 and 2003)
    
    
    1,610,122
    
    
    
    1,650,023Subordinated limited partner interest
    
    
    60
    
    
    
    61General partners capital deficiency
    
    
    (255
    )
    
    
    (251
    )Total partners capital
    
    
    1,609,927
    
    
    
    1,649,833Total liabilities and partners capital
    
    $
    1,715,162
    
    
    
    1,711,327
  3




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INTERSTATE
LAND INVESTORS II LIMITED PARTNERSHIP
  STATEMENTS OF OPERATIONS
(Unaudited)
  Three Months Ended June 30,
    
    Six Months Ended June 30,2005
    
    
    2004
    
    
    2005
    
    
    2004OPERATING REVENUEInterest
    
    $
    26
    
    
    
    127
    
    
    
    64
    
    
    
    255Total operating revenue
    
    
    26
    
    
    
    127
    
    
    
    64
    
    
    
    255OPERATING EXPENSEProfessional fees
    
    
    11,460
    
    
    
    14,098
    
    
    
    36,699
    
    
    
    56,814Property tax
    
    
    30
    
    
    
    28
    
    
    
    60
    
    
    
    56General and administrative
    
    
    1,870
    
    
    
    1,800
    
    
    
    3,211
    
    
    
    2,120Total operating expense
    
    
    13,360
    
    
    
    15,926
    
    
    
    39,970
    
    
    
    58,990Net loss
    
    $
    (13,334
    )
    
    
    (15,799
    )
    
    
    (39,906
    )
    
    
    (58,735
    )NET LOSS ALLOCATED TOClass A limited partners
    
    $
    (13,332
    )
    
    
    (15,797
    )
    
    
    (39,901
    )
    
    
    (58,728
    )Subordinated limited partner
    
    
    (1
    )
    
    
    (1
    )
    
    
    (1
    )
    
    
    (2
    )General partners
    
    
    (1
    )
    
    
    (1
    )
    
    
    (4
    )
    
    
    (5
    )Net loss
    
    $
    (13,334
    )
    
    
    (15,799
    )
    
    
    (39,906
    )
    
    
    (58,735
    )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
    
    $
    (1.74
    )
    
    
    (2.07
    )
    
    
    (5.22
    )
    
    
    (7.68
    )
  4




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INTERSTATE
LAND INVESTORS II LIMITED PARTNERSHIP
  STATEMENTS OF PARTNERS CAPITAL
(Unaudited)
  Class A Limited Partners
    
    SubordinatedLimited
    
    GeneralUnits
    
    Capital
    
    Partner
    
    Partners
    
    TotalPartners 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
    )
    
    
    1,907,153Partners capital (deficiency),
December 31, 2004
    
    
    7,650
    
    
    
    1,650,023
    
    
    
    61
    
    
    
    (251
    )
    
    
    1,649,833Net loss
    
    
    
    
    
    
    (39,901
    )
    
    
    (1
    )
    
    
    (4
    )
    
    
    (39,906
    )Partners capital (deficiency),
June 30, 2005
    
    
    7,650
    
    
    $
    1,610,122
    
    
    
    60
    
    
    
    (255
    )
    
    
    1,609,927
  5




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INTERSTATE
LAND INVESTORS II LIMITED PARTNERSHIP
  STATEMENTS OF CASH FLOWS
(Unaudited)
  Six Months Ended June 30,2005
    
    
    2004OPERATING ACTIVITIESNet loss
    
    $
    (39,906
    )
    
    
    (58,735
    )Adjustments to reconcile net loss to net cash
provided by operating activitiesIncrease (decrease) in accrued expenses
    
    
    8,112
    
    
    
    (3,326
    )Net cash provided by operating activities
    
    
    (31,794
    )
    
    
    (62,061
    )FINANCING ACTIVITIESIncrease in due to general partner  related party
    
    
    35,629
    
    
    
    62,317Net cash provided by financing activities
    
    
    35,629
    
    
    
    62,317Cash and cash equivalents, beginning of period
    
    
    11,327
    
    
    
    60,261Cash and cash equivalents, end of period
    
    $
    15,162
    
    
    
    60,517
  6




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INTERSTATE
LAND INVESTORS II LIMITED PARTNERSHIP
  NOTE TO FINANCIAL STATEMENTS (UNAUDITED)
  NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
    NOTE 2: SALE OF PROPERTY
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ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 LIQUIDITY AND CAPITAL RESOURCES.
   RESULTS OF OPERATIONS.
 Three months ended June 30, 2005
    Six months ended June 30, 2005
    ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
  ITEM 4  CONTROLS AND PROCEDURES.
  8




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PART II. OTHER INFORMATION
 ITEM 1. LEGAL PROCEEDINGS.
  ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES.
  ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  ITEM 5. OTHER INFORMATION.
   9




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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
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INTERSTATE
LAND INVESTORS II LIMITED PARTNERSHIP
  SIGNATURES
  INTERSTATE LAND INVESTORS IILIMITED PARTNERSHIPBy: ISC REALTY CORPORATIONAs Principal Executive Officer,Principal Financial Officer, andPrincipal Accounting Officer of theRegistrantBy: /s/ James Christopher BooneJames Christopher BoonePresident
  11