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


[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the fiscal quarter ended September 30, 1998

[ ]  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 33-83216-01
                             -----------------------



               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
             (Exact name of registrant as specified in its charter)


                      Delaware                              94-3209289
           (State or other jurisdiction of                (I.R.S. Employer
           incorporation or organization)                 Identification No.)

          One Market, Steuart Street Tower
            Suite 800, San Francisco, CA                       94105-1301
      (Address of principal executive offices)                 (Zip code)



       Registrant's telephone number, including area code: (415) 974-1399
                             -----------------------

         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>




               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)

                                 BALANCE SHEETS
                 (in thousands of dollars, except unit amounts)

<TABLE>
<CAPTION>


                                                                            September 30,        December 31,
                                                                                 1998                 1997
                                                                          ----------------------------------------
<S>                                                                          <C>                   <C>       
Assets

Equipment held for operating lease, at cost                                  $   102,262           $   79,132
Less accumulated depreciation                                                    (34,243)             (26,749)
                                                                          ----------------------------------------
    Net equipment                                                                 68,019               52,383

Cash and cash equivalents                                                          1,878               19,179
Investment in unconsolidated special-purpose entities                             25,510               26,252
Accounts receivable, less allowance for doubtful accounts
      of $45 in 1998 and $70 in 1997                                               1,814                2,026
Deposit on equipment                                                                  --                  920
Prepaid expenses                                                                     324                  341
Deferred charges, less accumulated amortization
      of $317 in 1998 and $238 in 1997                                               301                  381
                                                                          ----------------------------------------

      Total assets                                                           $    97,846           $  101,482
                                                                          ========================================

Liabilities and members' equity

Liabilities:
Accounts payable and accrued expenses                                        $       937           $      594
Due to affiliates                                                                    199                2,005
Lessee deposits and reserves for repairs                                           2,206                1,409
Note payable                                                                      25,000               25,000
                                                                          ----------------------------------------
    Total liabilities                                                             28,342               29,008
                                                                          ----------------------------------------

Members' equity:
Class A members (4,999,581 units as of September 30, 1998
      and December 31, 1997)                                                      69,406               72,298
Class B member                                                                        98                  176
                                                                          ----------------------------------------
    Total members' equity                                                         69,504               72,474
                                                                          ----------------------------------------

       Total liabilities and members' equity                                 $    97,846           $  101,482
                                                                          ========================================


</TABLE>











                       See accompanying notes to financial
                                  statements.



<PAGE>




               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)

                            STATEMENTS OF OPERATIONS
         (in thousands of dollars, except weighted-average unit amounts)

<TABLE>
<CAPTION>

                                                        For the Three Months               For the Nine Months
                                                         Ended September 30,                  September 30,

                                                         1998            1997                1998             1997
                                                    -------------------------------------------------------------------
<S>                                                   <C>             <C>                 <C>              <C>      
Revenues

Lease revenue                                         $   5,818       $   4,687           $   15,118       $  12,312
Interest and other income                                    31              88                  320             303
Net gain on disposition of equipment                         16               1                2,757               5
                                                    -------------------------------------------------------------------
    Total revenues                                        5,865           4,776               18,195          12,620
                                                    -------------------------------------------------------------------

Expenses

Depreciation and amortization                             3,804           4,268               10,210          11,870
Repairs and maintenance                                     573             362                1,346             921
Equipment operating expenses                                400             242                  989             717
Interest expense                                            469             458                1,385             963
Insurance expense to affiliate                               19               1                   38              10
Other insurance expense                                      59              61                  146             205
Management fees to affiliate                                328             259                  840             691
General and administrative expenses
      to affiliates                                         221             235                  646             743
Other general and administrative expenses                    70             158                  534             486
                                                    -------------------------------------------------------------------
    Total expenses                                        5,943           6,044               16,134          16,606
                                                    -------------------------------------------------------------------

Equity in net income (loss) of unconsolidated
      special-purpose entities                           (1,679 )           275                3,792             490
                                                    -------------------------------------------------------------------

      Net income (loss)                               $  (1,757 )     $    (993 )         $    5,853       $  (3,496 )
                                                    ===================================================================

Members' share of net income (loss)

Class A members                                       $  (2,172 )     $  (1,398 )         $    4,608       $  (4,706 )
Class B member                                              415             405                1,245           1,210
                                                    -------------------------------------------------------------------

       Total                                          $  (1,757 )     $    (993 )         $    5,853       $  (3,496 )
                                                    ===================================================================

Net income (loss) per weighted-average
      Class A unit                                    $   (0.43 )     $   (0.28 )         $     0.92       $   (0.94 )
                                                    ===================================================================

Cash distributions                                    $   2,941       $   2,940           $    8,823       $   8,822
                                                    ===================================================================
Cash distributions per weighted-average
      Class A units                                   $    0.50       $    0.50           $     1.50       $    1.50
                                                    ===================================================================

</TABLE>





                       See accompanying notes to financial
                                  statements.


<PAGE>




               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)

                  STATEMENTS OF CHANGES IN MEMBERS' EQUITY For
             the period from December 31, 1996 to September 30, 1998
                            (in thousands of dollars)

<TABLE>
<CAPTION>



                                                           Class A              Class B               Total
                                                     -------------------------------------------------------------

<S>                                                    <C>                   <C>                  <C>          
Members' equity as of December 31, 1996                $       86,024        $         265        $      86,289

Net income (loss)                                              (3,728)               1,676               (2,052 )

Cash distributions                                             (9,998)              (1,765)             (11,763 )
                                                     -------------------------------------------------------------

  Members' equity as of December 31, 1997                      72,298                  176               72,474

Net income                                                      4,608                1,245                5,853

Cash distributions                                             (7,500)              (1,323)              (8,823 )
                                                     -------------------------------------------------------------

  Members' equity as of September 30, 1998             $       69,406        $          98        $      69,504
                                                     =============================================================

</TABLE>










                       See accompanying notes to financial
                                  statements.

 
<PAGE>




               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)

                            STATEMENTS OF CASH FLOWS
                     For the Nine Months Ended September 30,
                            (in thousands of dollars)

<TABLE>
<CAPTION>



                                                                      1998                  1997
                                                              ------------------------------------------
<S>                                                             <C>                   <C>             
Operating activities
Net income (loss)                                               $         5,853       $        (3,496)
Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
  Depreciation and amortization                                          10,210                11,870
  Net gain on disposition of equipment                                   (2,757)                   (5)
  Equity in net income of unconsolidated
        special-purpose entities                                         (3,792)                 (490)
  Changes in operating assets and liabilities:
    Restricted cash                                                          --                   223
    Accounts receivable, net                                                 86                  (537)
    Prepaid expenses                                                         17                   194
    Accounts payable and accrued expenses                                   343                   538
    Due to affiliates                                                       (13)                   35
    Lessee deposits and reserves for repairs                                797                   382
                                                              ------------------------------------------
      Net cash provided by operating activities                          10,744                 8,714
                                                              ------------------------------------------

Investing activities
Payments for purchase of equipment and capital
      improvements                                                      (27,470)              (19,320)
Investment in and equipment purchased and placed
      in unconsolidated special-purpose entities                        (13,917)               (5,100)
Liquidation distributions from unconsolidated
      special-purpose entities                                           10,990                    --
Proceeds from disposition of equipment                                    5,507                    27
Distributions from unconsolidated special-purpose
      entities                                                            7,461                 5,100
                                                              ------------------------------------------
      Net cash used in investing activities                             (17,429)              (19,293)
                                                              ------------------------------------------

Financing activities
Proceeds from note payable                                                   --                25,000
Payment due to affiliates                                                (1,793)                   --
Cash distributions to Class A members                                    (7,500)               (7,499)
Cash distributions to Class B member                                     (1,323)               (1,323)
Payment of debt placement fees                                               --                  (177)
                                                              ------------------------------------------
      Net cash (used in) provided by financing activities               (10,616)               16,001
                                                              ------------------------------------------

Net (decrease) increase in cash and cash equivalents                    (17,301)                5,422
Cash and cash equivalents at beginning of period                         19,179                 1,692
                                                              ------------------------------------------
Cash and cash equivalents at end of period                      $         1,878       $         7,114
                                                              ==========================================

Supplemental information
Interest paid                                                   $           916       $           505
                                                              ==========================================
Sale proceeds included in accounts receivable                   $            50       $       <0- 45>
                                                              ==========================================
</TABLE>

                See accompanying notes to financial statements.


<PAGE>



               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 1998


1.   Opinion of Management

     In the opinion of the  management  of PLM  Financial  Services,  Inc.  (the
     Manager  or FSI  or  sole  Class  B  member),  the  accompanying  unaudited
     financial   statements  contain  all  adjustments   necessary,   consisting
     primarily of normal  recurring  accruals,  to present  fairly the financial
     position of Professional  Lease Management Income Fund I, L.L.C. (Fund I or
     the Company) as of September 30, 1998 and December 31, 1997, the statements
     of  operations  for the three and nine months ended  September 30, 1998 and
     1997,  the  statements  of changes in  members'  equity for the period from
     December 31, 1996 to September 30, 1998,  and the  statements of cash flows
     for the nine months ended September 30, 1998 and 1997. Certain  information
     and note disclosures  normally included in financial statements prepared in
     accordance  with  generally  accepted   accounting   principles  have  been
     condensed  or  omitted  from the  accompanying  financial  statements.  For
     further  information,  reference should be made to the financial statements
     and notes thereto  included in the Company's Annual Report on Form 10-K for
     the year ended  December 31, 1997, on file with the Securities and Exchange
     Commission.

2.   Cash Distributions

     Cash distributions are recorded when paid and totaled $2.9 million for each
     of the three months ended September 30, 1998 and 1997, and $8.8 million for
     each  of  the  nine  months  ended   September  30,  1998  and  1997.  Cash
     distributions to Class A unitholders in excess of net income are considered
     to represent a return of capital. Cash distributions to Class A unitholders
     of $2.9 and $7.5 million for the nine months ended  September  30, 1998 and
     1997,   respectively,   were  deemed  to  be  a  return  of  capital.  Cash
     distributions  related to the results  from the third  quarter of 1998,  of
     $1.7 million, are to be paid during the fourth quarter of 1998.

3.   Transactions with Manager and Affiliates

     The balance due to  affiliates  as of  September  30,  1998  included  $0.2
     million due to FSI and its affiliates for management  fees. The balance due
     to  affiliates as of December 31, 1997 included $0.2 million due to FSI and
     its  affiliates  for  management  fees and $1.8  million due to  affiliated
     unconsolidated special-purpose entities (USPEs). The Company's proportional
     share of management  fees affiliated with USPEs of $40,000 and $24,000 were
     payable as of September 30, 1998 and December 31, 1997, respectively.

     The Company's proportional share of the affiliated expenses incurred by the
     USPEs during 1998 and 1997 is listed in the  following  table (in thousands
     of dollars):

<TABLE>
<CAPTION>

                                               For the Three Months                For the Nine Months
                                                Ended September 30,                Ended September 30,

                                                  1998         1997               1998             1997
                                           -----------------------------------------------------------------

<S>                                          <C>             <C>               <C>              <C>      
Management fees                              $      85       $     97          $     267        $     281
Data processing and administrative
   expenses                                         22             25                 79               69
Insurance expense                                   --              1                 (3)               6

</TABLE>



<PAGE>




               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 1998

3.   Transactions with Manager and Affiliates (continued)

     Transportation Equipment Indemnity Company, Ltd. (TEI), an affiliate of the
     Manager, provides marine insurance coverage for the Company's investment in
     USPEs and other insurance brokerage  services.  In the future, TEI will not
     be providing  the same level of  insurance  coverage as it has in the past.
     This insurance will be provided by an unaffilated third party.

4.   Equipment

     Owned  equipment held for operating lease is stated at cost. The components
     of  equipment  held for  operating  lease are as follows (in  thousands  of
     dollars):

<TABLE>
<CAPTION>

                                             September 30,            December 31,
                                                  1998                    1997
                                          --------------------------------------------

<S>                                           <C>                      <C>       
Marine vessels                                $    46,957              $   20,756
Aircraft                                           20,605                  24,605
Rail equipment                                     19,913                  18,958
Trailers                                           14,787                  14,813
                                          --------------------------------------------
                                                  102,262                  79,132
Less accumulated depreciation                     (34,243)                (26,749)
                                          --------------------------------------------
      Net equipment                           $    68,019              $   52,383
                                          ============================================
</TABLE>

     During the nine months ended  September 30, 1998, the Company  purchased 39
     rail  equipment,  two marine vessels (a deposit of $0.9 million was paid in
     December  1997 for the purchase of one of these marine  vessels) and a hush
     kit for an aircraft  for a total of $28.4  million.  During the nine months
     ended  September  30, 1997,  the Company  purchased  24 trailers,  a mobile
     offshore drilling unit, and a marine vessel for a total of $19.3 million.

     During the nine months  ended  September  30,  1998,  the  Company  sold an
     aircraft,  trailers  and  rail  equipment  with a net  book  value  of $2.8
     million,  net of  outstanding  receivables,  for proceeds of $5.6  million.
     During the nine months ended  September 30, 1997, the Company sold trailers
     with a net book value of $22,000, for proceeds of $27,000.

     As of September 30, 1998, all equipment was either on lease or operating in
     PLM-affiliated  short-term  trailer  rental  facilities,  except for 5 rail
     equipment  with a carrying  value of $73,000.  As of December 31, 1997, all
     equipment  was either on lease or  operating in  PLM-affiliated  short-term
     trailer  rental  facilities,  except for one rail equipment with a carrying
     value of $22,000.



<PAGE>




               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 1998

5.   Investments in Unconsolidated Special-Purpose Entities

     The net investments in USPEs included the following jointly-owned equipment
(and related assets and liabilities) (in thousands of dollars):

<TABLE>
<CAPTION>

                                                                             September 30,            December 31,
                                                                                 1998                     1997
                                                                          --------------------------------------------
     <S>                                                                   <C>                      <C>            
     61% interest in an entity owning a mobile offshore drilling unit      $         8,667          $         9,766
     50% interest in a trust owning an MD-82 commercial aircraft                     6,825                       --
     33% interest in two trusts owning three 737-200A commercial 
         aircraft,two aircraft engines, and a portfolio of aircraft
         rotables                                                                    4,243                    7,788
     50% interest in a trust owning an MD-82 commercial aircraft                     4,194                      682
     50% interest in a trust owning a cargo marine vessel                            1,307                    2,638
     25% interest in a trust that owned four 737-200A commercial
               aircraft                                                                152                    3,163
     25% interest in a trust that owned four 737-200A commercial
               aircraft                                                                122                    2,215
         Net investments                                                   $        25,510          $        26,252
                                                                          ============================================
</TABLE>

     The Company had  interests  in two USPEs that own  multiple  aircraft  (the
     Trusts).  These Trusts contain  provisions under certain  circumstances for
     allocating  specific  aircraft to the  beneficial  owners.  During the nine
     months ended  September 30, 1998, the Company and affiliated  programs each
     sold the commercial  aircraft  designated to it in one of these Trusts. The
     Company sold the commercial  aircraft  assigned to it with a net book value
     of $2.7  million,  net of  outstanding  receivables,  for  proceeds of $6.3
     million.

     In the second  Trust,  the Company and  affiliated  programs  each sold the
     aircraft  designated to it during the nine months ended September 30, 1998.
     The Company  sold the  commercial  aircraft  assigned to it with a net book
     value of $2.0 million, net of outstanding receivables, for proceeds of $4.7
     million.

     During the nine months ended  September 30, 1998,  the Company  purchased a
     50% interest in an MD-82 stage III commercial  aircraft for $6.8 million (a
     deposit of $0.7 million was paid in December of 1997) and a 50% interest in
     an MD-82 stage III commercial aircraft for $7.8 million.

6.   Debt

     The Manager entered into a short-term,  joint $50.0 million credit facility
     which is due to expire on November 2, 1998.  This  facility  was amended on
     June 1, 1998 to  temporarily  increase the  borrowing  capacity of American
     Finance Group,  Inc. (AFG), a subsidiary of PLM  International,  Inc., from
     $50.0 million to $55.0  million  until  September 1, 1998. On June 8, 1998,
     this facility was amended again to  temporarily  increase  AFG's  borrowing
     capacity  from $55.0  million to $60.0  million  until July 8, 1998.  As of
     September 30, 1998, the Company had no borrowing under the short-term joint
     $50.0 million credit facility.  Among the other eligible borrowers, AFG had
     borrowings  of  $44.2  million,   and  TEC  Acquisub,   Inc.,  an  indirect
     wholly-owned subsidiary of PLM International,  Inc., had borrowings of $0.3
     million under the short-term  joint,  $50.0 million  credit  facility as of
     September  30,  1998.  No  other  eligible  borrower  had  any  outstanding
     borrowings.

<PAGE>


               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 1998

6.   Debt (continued)

     The Manager  believes it will renew the credit facility upon its expiration
     with similar terms as those in the current credit facility.

7.   Net Income (Loss) Per Weighted-Average Class A Unit

     Net  income  (loss)  per  weighted-average  Class A unit  was  computed  by
     dividing  net  income  (loss)  attributable  to  Class  A  members  by  the
     weighted-average  number of Class A units  deemed  outstanding  during  the
     period.  The  weighted-average  number of Class A units deemed  outstanding
     during the three and nine  months  ended  September  30,  1998 and 1997 was
     4,999,581.

8.   Subsequent Event

     On October 29,  1998,  the Manager  received a  commitment  letter from the
     lender of the short-term  credit facility  extending the credit facility to
     November 1, 1999. The terms of the credit facility  remained  substantially
     the same as the previous credit facility.














                     (This space intentionally left blank.)



<PAGE>



Item 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULT
OF OPERATIONS

(I)   RESULTS OF OPERATIONS

Comparison of the Professional  Lease  Management  Income Fund I, L.L.C.'s (Fund
I's or the Company's) Operating Results for the Three Months Ended September 30,
1998 and 1997

(A)       Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as repairs  and  maintenance,
equipment  operating expenses,  and asset-specific  insurance expenses) on owned
equipment  increased  during  the third  quarter of 1998,  compared  to the same
quarter of 1997.  The  following  table  presents  lease  revenues  less  direct
expenses by owned equipment type (in thousands of dollars):

<TABLE>
<CAPTION>

                                                                           For the Three Months
                                                                            Ended September 30,
                                                                          1998               1997
                                                                      -------------------------------

<S>                                                                     <C>               <C>     
Marine vessels                                                          $  2,026          $    806
Aircraft                                                                   1,003             1,249
Trailers                                                                     927               842
Rail equipment                                                               823               628
Mobile offshore drilling unit                                                 --               502

</TABLE>

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $2.7
million and $0.7 million,  respectively, for the third quarter of 1998, compared
to $1.2 million and $0.4 million, respectively, during the same quarter of 1997.
Marine vessel  contribution  increased due to the purchase of two marine vessels
in 1998.

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $1.0 million and
$11,000,  respectively,  for the third quarter of 1998, compared to $1.2 million
and  $11,000,   respectively,   during  the  same  quarter  of  1997.   Aircraft
contribution  decreased  due to the sale of an aircraft at the end of the second
quarter of 1998.

Trailers:  Trailer  revenues  and direct  expenses  were $1.1  million  and $0.2
million,  respectively,  for the third quarter of 1998, compared to $0.9 million
and $0.1  million,  respectively,  for the same period of 1997.  Lease  revenues
increased in the third  quarter of 1998  compared to the same period in 1997 due
to the purchase of  additional  trailers in the third quarter of 1997 and higher
utilization  earned on trailers  operating in the short-term rental  facilities.
Expenses  increased  due to repairs  required  on certain  trailers in the third
quarter of 1998, which were not needed in the same period in 1997.

Rail  equipment:  Rail equipment  lease  revenues and direct  expenses were $1.0
million and $0.2 million,  respectively, for the third quarter of 1998, compared
to $0.8 million and $0.2 million, respectively, during the same quarter of 1997.
Rail equipment  contribution  increased due to the purchase of rail equipment in
the first quarter of 1998.

Mobile  offshore  drilling  unit (rig):  Revenues and direct  expenses were $0.5
million and $4,000, respectively, during the third quarter of 1997. This rig was
sold in the fourth  quarter of 1997 as part of the original  purchase  agreement
that gave the charterers the option to purchase the rig. The Company did not own
any rigs in the third quarter of 1998.

(B) Interest and Other Income

Interest  and other  income  decreased  $0.1  million due to lower  average cash
balances in the third quarter of 1998, compared to the same period in 1997.



<PAGE>



(C) Indirect Expenses Related to Owned Equipment Operations

Total indirect expenses of $4.9 million for the quarter ended September 30, 1998
decreased from $5.4 million for the same period in 1997.  Significant  variances
are explained as follows:

     (1) A $0.5 million decrease in depreciation and amortization  expenses from
1997 levels reflects the Company's  double-declining balance depreciation method
which results in greater  depreciation  in the first years an asset is owned and
the effects of the sale of the  aircraft  in the second  quarter of 1998 and the
sale  of the  mobile  offshore  drilling  unit  at the end of  1997,  which  was
partially offset by the purchase of equipment during 1997 and 1998.

     (2) A $0.1 million  decrease in  administrative  expenses  from 1997 levels
resulted from  decreased  administrative  costs  associated  with the short-term
trailer  rental  facilities in the third  quarter of 1998,  compared to the same
period in 1997.

     (3) A $0.1 million  increase in management  fees to affiliate  reflects the
higher levels of lease  revenues in 1998,  compared to 1997, due to the purchase
of additional equipment in 1997 and 1998.

(D)  Net Gain on Disposition of Owned Equipment

The net gain on  disposition  of equipment for the third quarter of 1998 totaled
$16,000,  and  resulted  from the  sale of a  railcar  with a net book  value of
$21,000,  for proceeds of $37,000.  There was no sales or  dispositions of owned
equipment in the third quarter of 1997.

Equity in Net Income (Loss) of Unconsolidated Special-Purpose Entities (USPEs)

Net income (loss) generated from the operation of jointly-owned assets accounted
for under the equity  method is shown in the following  table by equipment  type
(in thousands of dollars):

<TABLE>
<CAPTION>

                                                                         For the Three Months
                                                                          Ended September 30,
                                                                         1998               1997
                                                                    --------------------------------

<S>                                                                    <C>                <C>     
Mobile offshore drilling unit                                          $     140          $      6
Aircraft                                                                    (796)              405
Marine vessel                                                             (1,023)             (136)
                                                                    ---------------------------------
       Equity in Net Income (Loss) of USPEs                            $  (1,679)         $    275
                                                                    =================================
</TABLE>

Mobile  offshore  drilling  unit: As of September 30, 1998 and 1997, the Company
had an interest in an entity that owns a mobile offshore  drilling unit.  Mobile
offshore drilling unit revenues and expenses were $0.6 million and $0.5 million,
respectively,  for the third quarter of 1998,  compared to $0.6 million and $0.6
million,  respectively,  during the same quarter of 1997.  Expenses decreased in
the  third  quarter  of  1998,  due to the use of the  double-declining  balance
depreciation method, which results in greater depreciation in the early years an
asset is owned.

Aircraft:  As of September 30, 1998,  the Company owned  interests in two trusts
that each own a  commercial  aircraft,  and an interest in two trusts that own a
total of three commercial  aircraft,  two aircraft  engines,  and a portfolio of
aircraft rotables.  As of September 30, 1997, the Company owned an interest in a
trust that owned six commercial aircraft, an interest in another trust that owns
four  commercial  aircraft,  and an interest in two trusts that owned a total of
three commercial  aircraft,  two aircraft  engines,  and a portfolio of aircraft
rotables.  Aircraft  lease  revenues  and  expenses  were $0.9  million and $1.7
million,  respectively,  for the third quarter of 1998, compared to $1.4 million
and $1.0 million,  respectively,  for the same quarter of 1997.  Lease  revenues
decreased due to the sale of the Company's  investment in two trusts  containing
ten  commercial  aircraft and a lower lease rate earned on certain  equipment in
the third quarter of 1998  compared to the same period in 1997.  The decrease in
lease revenues was offset in part by the Company's  investment in two additional
trusts owning a total of two aircraft  during 1998. The increase in the expenses
was due primarily to the depreciation on the investment in two additional trusts
during 1998, which was offset, in part, by the sale of the Company's interest in
the two trusts.

Marine vessel: As of September 30, 1998 and 1997, the Company had an interest in
an entity that owns a marine  vessel.  During the third quarter of 1998,  marine
vessel revenues of $0.2 million were offset by depreciation  and  administrative
expenses of $0.2 million,  and a loss on the revaluation of the marine vessel of
$1.0  million.  During the same period of 1997,  revenues of $0.3  million  were
offset by depreciation  and  administrative  expenses of $0.4 million.  Revenues
decreased  primarily due to a marine vessel that the Company owns an interest in
being  off-hire for 20 days in the third  quarter of 1998  compared to 2 days in
the  same  period  in  1997.   Expenses   decreased   due  to  the  use  of  the
double-declining   balance   depreciation   method,  which  results  in  greater
depreciation  in the  first  years an asset is owned  and  reduced  repairs  and
maintenance expenses in the third quarter of 1998 compared to the same period in
1997.  Loss on revaluation of equipment of $1.0 million during the third quarter
of 1998,  resulted from the Company  reducing the carrying value of its interest
in an entity owning a marine vessel to its estimated net realizable value. There
was no revaluation of interest required during the same period of 1997.

(F)       Net Loss

As a result of the foregoing, the Company had a net loss of $1.8 million for the
third quarter of 1998,  compared to $1.0 million during the same period of 1997.
The Company's ability to acquire,  operate and liquidate assets,  secure leases,
and re-lease  those assets whose leases expire is subject to many  factors,  and
the  Company's  performance  in the  third  quarter  of 1998 is not  necessarily
indicative  of  future  periods.  In the  third  quarter  of 1998,  the  Company
distributed $2.5 million to Class A members, or $0.50 per weighted-average Class
A unit.

Comparison  of the  Company's  Operating  Results  for  the  Nine  Months  Ended
September 30, 1998 and 1997

(A)       Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as repairs  and  maintenance,
equipment  operating expenses,  and asset-specific  insurance expenses) on owned
equipment increased during the nine months ended September 30, 1998, compared to
the same period of 1997. The following table presents lease revenues less direct
expenses by owned equipment type (in thousands of dollars):

<TABLE>
<CAPTION>

                                                                           For the Nine Months
                                                                           Ended September 30,
                                                                          1998              1997
                                                                      ------------------------------

<S>                                                                     <C>               <C>    
Marine vessels                                                          $ 4,198           $ 1,323
Aircraft                                                                  3,490             3,748
Rail equipment                                                            2,578             2,025
Trailers                                                                  2,368             2,334
Mobile offshore drilling unit                                                --             1,056

</TABLE>

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $5.8
million and $1.6 million,  respectively, for the nine months ended September 30,
1998, compared to $2.4 million and $1.1 million,  respectively,  during the same
period of 1997.  Marine vessel  contribution  increased due to the purchase of a
marine vessel at the end of the second quarter of 1997 and two marine vessels in
the nine months ended September 30, 1998.

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $3.5 million and
$34,000, respectively, during the nine months ended September 30, 1998, compared
to $3.8  million  and  $29,000,  respectively,  during the same  period of 1997.
Aircraft contribution decreased due to the sale of an aircraft at the end of the
second quarter of 1998.

Rail  equipment:  Rail equipment  lease  revenues and direct  expenses were $3.0
million and $0.4 million,  respectively, for the nine months ended September 30,
1998, compared to $2.4 million and $0.4 million,  respectively,  during the same
period of 1997. Lease revenues increased in the nine months of 1998, compared to
the same  period  of 1997 due to the  purchase  of rail  equipment  in the first
quarter of 1998.

Trailers:  Trailer  revenues  and direct  expenses  were $2.8  million  and $0.4
million, respectively, for the nine months ended September 30, 1998, compared to
$2.6  million and $0.3  million,  respectively,  during the same period in 1997.
Lease revenues  increased in the nine months ended September 30, 1998,  compared
to the same  period in 1997 due to the  purchase of  additional  trailers in the
third quarter of 1997 and higher utilization earned on trailers operating in the
short-term  rental  facilities.  Expenses  increased due to repairs  required on
certain  trailers in the nine months ended  September  30, 1998,  which were not
needed in the same period in 1997.

Mobile  offshore  drilling unit:  Revenues and direct expenses were $1.1 million
and $22,000, respectively, during the nine months ended September 30, 1997. This
rig was sold in the  fourth  quarter  of 1997 as part of the  original  purchase
agreement  that gave the  charterers the option to purchase the rig. The Company
did not own any rigs during the nine months ended September 30, 1998.

(B)         Indirect Expenses Related to Owned Equipment Operations

Total indirect expenses of $13.6 million for the nine months ended September 30,
1998  decreased  from $14.8  million  for the same  period of 1997.  Significant
variances are explained as follows:

     (1) A $1.7 million decrease in depreciation and amortization  expenses from
1997 levels reflects the Company's  double-declining balance depreciation method
which results in greater  depreciation  in the first years an asset is owned and
the effects of the sale of the  aircraft  in the second  quarter of 1998 and the
mobile offshore  drilling unit at the end of 1997, which was partially offset by
the purchase of equipment during 1998 and 1997.

     (2) A $0.1 million  increase in management  fees to affiliate  reflects the
higher levels of lease revenues in 1998, compared to 1997, due to the additional
purchase of equipment in 1997 and 1998.

     (3) A $0.4 million  increase in interest  expense was due to higher average
outstanding  borrowings in the nine months ended  September 30, 1998 compared to
the same period in 1997.

(C) Net Gain on Disposition of Owned Equipment

The net gain on disposition of equipment for the nine months ended September 30,
1998  totaled $2.8  million,  and  resulted  from the sale of an aircraft,  rail
equipment and trailers with an aggregate net book value of $2.8 million,  net of
outstanding  receivables,  for  proceeds  of  $5.6  million.  Net  gain  on  the
disposition  of equipment  for the nine months ended  September 30, 1997 totaled
$5,000, and resulted from the sale of trailers with a net book value of $22,000,
for proceeds of $27,000.

(D) Equity in Net Income (Loss) of Unconsolidated Special-Purpose Entities

Net income (loss) generated from the operation of jointly-owned assets accounted
for under the equity  method is shown in the following  table by equipment  type
(in thousands of dollars):

<TABLE>
<CAPTION>

                                                                          For the Nine Months
                                                                          Ended September 30,
                                                                         1998               1997
                                                                    --------------------------------

<S>                                                                    <C>                <C>     
Aircraft                                                               $   4,651          $  1,297
Mobile offshore drilling unit                                                382              (467)
Marine vessel                                                             (1,241)             (340)
                                                                    ---------------------------------
       Equity in Net Income of USPEs                                   $   3,792          $    490
                                                                    =================================
</TABLE>

Aircraft:  As of September 30, 1998,  the Company owned  interests in two trusts
that each own a  commercial  aircraft,  and an interest in two trusts that own a
total of three commercial  aircraft,  two aircraft  engines,  and a portfolio of
aircraft rotables.  As of September 30, 1997, the Company owned an interest in a
trust that owned six commercial aircraft, an interest in another trust that owns
four  commercial  aircraft,  and an  interest  in two trusts  that  owned  three
commercial aircraft, two aircraft engines, and a portfolio of aircraft rotables.
During the nine months ended  September 30, 1998,  aircraft  lease revenues were
$3.4 million and the gain from the sale of the Company's  interest in two trusts
that owned  commercial  aircraft of $6.3  million was offset by expenses of $5.0
million.  During the same period in 1997,  lease revenues and expenses were $4.4
million and $3.1 million, respectively. Lease revenues decreased due to the sale
of the Company's investment in two trusts containing ten commercial aircraft and
a lower lease rate earned on certain  equipment.  The decrease in lease revenues
was offset in part by the Company's investment in two additional trusts owning a
total of two aircraft during 1998. The increase in expenses was due primarily to
depreciation on the investment in two additional  trusts during 1998,  which was
offset in part by the sale of the Company's interest in the two trusts.

Mobile  offshore  drilling  unit: As of September 30, 1998 and 1997, the Company
had an interest in an entity that owns a mobile offshore  drilling unit.  Mobile
offshore drilling unit revenues and expenses were $1.8 million and $1.4 million,
respectively,  for the nine months ended  September  30, 1998,  compared to $1.4
million and $1.9 million,  respectively,  during the same period in 1997.  Lease
revenue  increased in the nine months ended September 30, 1998,  compared to the
same  period  in 1997 due to the  increase  of the  Company's  interest  in this
investment  from  35% to 61% late in the  first  quarter  of 1997.  Depreciation
expense  decreased in the nine months ended September 30, 1998,  compared to the
same period in 1997 due to the Company's  double-declining  balance depreciation
method  which  results in greater  depreciation  in the first  years an asset is
owned.

Marine vessel: As of September 30, 1998 and 1997, the Company had an interest in
an entity that owns a marine vessel.  During the nine months ended September 30,
1998,  marine  vessel  revenues  were $0.8 million  offset by  depreciation  and
administrative  expenses of $1.0  million,  and a loss on the  revaluation  of a
marine vessel of $1.0 million.  During the same period of 1997, revenues of $0.9
million were offset by depreciation and administrative expenses of $1.2 million.
Revenues  decreased  primarily  due to a marine  vessel that the Company owns an
interest in being  off-hire for 20 days in the third quarter of 1998 compared to
2 days in the same  period  in 1997.  Expenses  decreased  due to the use of the
double-declining   balance   depreciation   method,  which  results  in  greater
depreciation  in the  first  years an asset is owned  and  reduced  repairs  and
maintenance  expenses in the nine months ended  September 30, 1998,  compared to
the same period in 1997.  Loss on  revaluation  of equipment of $1.0 million for
the nine months ended September 30, 1998, resulted from the Company reducing the
carrying  value of its  interest  in an  entity  owning a marine  vessel  to its
estimated net realizable  value.  There was no revaluation of interest  required
during the same period of 1997.

(E)       Net Income (Loss)

As a result of the  foregoing,  the Company had a net income of $5.9 million for
the nine months ended  September 30, 1998,  compared to net loss of $3.5 million
during the same period of 1997.  The Company's  ability to acquire,  operate and
liquidate assets,  secure leases,  and re-lease those assets whose leases expire
is subject to many  factors,  and the Company's  performance  in the nine months
ended September 30, 1998 is not necessarily indicative of future periods. In the
nine months ended  September 30, 1998, the Company  distributed  $7.5 million to
the Class A members, or $1.50 per weighted-average Class A unit.

(II)      FINANCIAL CONDITION -- CAPITAL RESOURCES AND LIQUIDITY

For the nine months  ended  September  30,  1998,  the Company  generated  $18.2
million in  operating  cash (net cash  provided by  operating  activities,  plus
non-liquidating  distributions  from USPEs) to meet its  operating  obligations,
maintain   working  capital   reserves,   and  maintain  the  current  level  of
distributions  (total  for the nine  months  ended  September  30,  1998 of $8.8
million) to the members.

During the nine months ended  September 30, 1998, the Company  purchased 39 rail
equipment,  two marine  vessels (a deposit of $0.9  million was paid in December
1997 for the  purchase  of one of these  marine  vessels)  and a hush kit for an
aircraft for a total of $28.4 million.

The Manager has entered into a short-term  joint $50.0 million credit  facility.
As of November 6, 1998, TEC Acquisub,  Inc., an indirect wholly-owned subsidiary
of PLM International,  Inc., had borrowings of $0.3 million and American Finance
Group,  Inc., a subsidiary of PLM  International,  Inc., had borrowings of $39.1
million under the  short-term  joint $50.0  million  credit  facility.  No other
eligible borrower had any outstanding borrowings.

(III) EFFECTS OF YEAR 2000

It is possible that the Manager's currently installed computer systems, software
products and other business systems, or the Company's vendors, service providers
and customers,  working  either alone or in  conjunction  with other software or
systems, may not accept input of, store, manipulate and output dates on or after
January 1, 2000 without error or interruption  (a problem  commonly known as the
"Year 2000"  problem).  As the Company  relies  substantially  on the  Manager's
software  systems,  applications and control devices in operating and monitoring
significant  aspects of its  business,  any Year 2000  problem  suffered  by the
Manager  could  have  a  material  adverse  effect  on the  Company's  business,
financial condition and results of operations.

The Manager has  established a special Year 2000  oversight  committee to review
the  impact of Year 2000  issues on its  software  products  and other  business
systems in order to determine  whether  such  systems will retain  functionality
after  December 31, 1999.  The Manager (a) is  currently  integrating  Year 2000
compliant   programming  code  into  its  existing  internally   customized  and
internally  developed  transaction  processing  software  systems  and  (b)  the
Manager's  accounting and asset management  software systems have either already
been made Year 2000  compliant or Year 2000  compliant  upgrades of such systems
are  planned to be  implemented  by the Manager  before the end of fiscal  1999.
Although  the  Manager  believes  that its Year 2000  compliance  program can be
completed  by the  beginning  of  1999,  there  can  be no  assurance  that  the
compliance  program will be completed by that date. To date,  the costs incurred
and  allocated  to the  Company  to  become  Year 2000  compliant  have not been
material.  In addition,  the Manager  believes the future costs allocable to the
Company to become Year 2000 compliant will not be material.

Some risks  associated  with the Year 2000 problem are beyond the ability of the
Company to control,  including the extent to which third parties can address the
Year 2000 problem.  The Manager has begun to communicate with vendors,  services
providers and customers in order to assess the Year 2000 compliance readiness of
such  parties  and  the  extent  to  which  the  Company  is  vulnerable  to any
third-party  Year 2000  issues.  There  can be no  assurance  that the  software
systems of such  parties  will be  converted  or made Year 2000  compliant  in a
timely  manner.  Any failure by the Manager or such other  parties to make their
respective  systems Year 2000 compliant could have a material  adverse effect on
the business,  financial position and results of operations of the Company.  The
Manager will make an ongoing effort to recognize and evaluate potential exposure
relating to third-party Year 2000  non-compliance and will develop a contingency
plan if the Manager  determines,  or is unable to  determine,  that  third-party
non-compliance  would have a material adverse effect on the Company's  business,
financial position or results of operation.

(IV) ACCOUNTING PRONOUNCEMENTS

In September  1997,  the  Financial  Accounting  Standards  Board issued two new
statements:  SFAS No. 130,  "Reporting  Comprehensive  Income,"  which  requires
enterprises to report,  by major  component and in total,  all changes in equity
from  nonowner  sources;  and SFAS No. 131,  "Disclosures  about  Segments of an
Enterprise  and  Related  Information,"  which  establishes  annual and  interim
reporting  standards  for a public  company's  operating  segments  and  related
disclosures about its products, services, geographic areas, and major customers.
Both statements are effective for the  Partnership's  fiscal year ended December
31, 1998, with earlier  application  permitted.  The effect of adoption of these
statements  will  be  limited  to the  form  and  content  of the  Partnership's
disclosures and will not impact the  Partnership's  results of operations,  cash
flow, or financial position.

In September 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting   for  Derivative   Instruments  and  Hedging   Activities",   which
standardizes  the  accounting  for  derivative  instruments,  including  certain
derivative instruments embedded in other contracts,  by requiring that an entity
recognize  those items as assets or  liabilities  in the  statement of financial
position and measure  them at fair value.  This  statement is effective  for all
quarters of fiscal years beginning after September 15, 1999. As of September 30,
1998,  the  Manager is  reviewing  the  effect  this  standard  will have on the
Company's consolidated financial statements.

In April 1998, the American  Institute of Certified  Public  Accountants  issued
Statement  of Position  98-5,  "Reporting  on the Costs of Start-Up  Activities"
which  requires  start-up  activities and  organization  costs to be expensed as
incurred.  The  statement  requires  that initial  application  be reported as a
cumulative  effect  of a change  in  accounting  principle.  This  statement  is
effective for the Company's  fiscal year ended  December 31, 1999,  with earlier
application  permitted.  The Manager is continuing to review this  statement for
any other impact it may have on the Company's financial statements.

(V) OUTLOOK FOR THE FUTURE

Several  factors  may affect the  Company's  operating  performance  in 1998 and
beyond, including changes in the markets for the Company's equipment and changes
in the regulatory environment in which the equipment operates.

The Company's operation of a diversified  equipment portfolio in a broad base of
markets is intended to reduce its exposure to volatility in individual equipment
sectors.

The ability of the Company to realize acceptable lease rates on its equipment in
the different equipment markets is contingent on many factors,  such as specific
market  conditions  and  economic  activity,   technological  obsolescence,  and
government or other regulations.  The unpredictability of some of these factors,
or of their  occurrence,  makes it difficult  for the Manager to clearly  define
trends or influences that may impact the performance of the Company's equipment.
The Manager continually  monitors both the equipment markets and the performance
of the Company's  equipment in these  markets.  The Manager may decide to reduce
the  Company's  exposure to equipment  markets if it  determines  that it cannot
operate  equipment to achieve  acceptable  rates of return.  Alternatively,  the
Manager  may  make a  determination  to  enter  equipment  markets  in  which it
perceives  opportunities  to profit from  supply/demand  instabilities  or other
market imperfections.

The Company  intends to use excess cash flow,  after  payment of  expenses,  the
maintenance of working  capital  reserves,  and cash  distributions,  to acquire
additional  equipment  during the first nine years of the  Company's  operations
which concludes  December 31, 2002. The Manager believes that these acquisitions
may cause the  Company to  generate  additional  earnings  and cash flow for the
Company.

The Company  relies on operating  cash flow to meet its  operating  obligations,
maintain  working capital  reserves,  make cash  distributions  to Class A and B
unitholders, and increase the Company's equipment portfolio through reinvestment
of any remaining surplus cash available in additional equipment.

(VI) FORWARD-LOOKING INFORMATION

Except for the historical  information  contained herein, the discussion in this
Form  10-Q   contains   forward-looking   statements   that  involve  risks  and
uncertainties,   such  as  statements  of  the  Company's   plans,   objectives,
expectations,  and intentions.  The cautionary statements made in this Form 10-Q
should be read as being  applicable  to all related  forward-looking  statements
wherever  they appear in this Form 10-Q.  The  Company's  actual  results  could
differ materially from those discussed here.



                                                      -9-


<PAGE>




                          PART II -- OTHER INFORMATION



Item 6.           Exhibits and Reports on Form 8-K

         (a)      Exhibits

          10.1    Commitment Letter from First Union National Bank dated October
                  29,  1998  extending  the  $50.0  million  Warehousing  Credit
                  Agreement until November 2, 1998.


         (b)      Reports on Form 8-K

              None.








<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.


                           PROFESSIONAL LEASE MANAGEMENT
                           INCOME FUND I, L.L.C.
                           By:  PLM Financial Services, Inc.
                                Manager




Date: November 6, 1998     By:  /s/ Richard K Brock
                                ---------------------
                                Richard K Brock
                                Vice President and
                                Corporate Controller


<PAGE>