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 June 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>


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

Equipment held for operating lease, at cost                                  $    99,783           $   79,132
Less accumulated depreciation                                                    (30,472)             (26,749)
                                                                          ----------------------------------------
    Net equipment                                                                 69,311               52,383

Cash and cash equivalents                                                          2,334               19,179
Investment in unconsolidated special-purpose entities                             28,537               26,252
Accounts receivable, less allowance for doubtful accounts
      of $75 in 1998 and $70 in 1997                                               1,494                2,026
Deposit on equipment                                                                  --                  920
Prepaid expenses                                                                     379                  341
Deferred charges, less accumulated amortization
      of $291 in 1998 and $238 in 1997                                               328                  381
                                                                          ----------------------------------------

      Total assets                                                           $   102,383           $  101,482
                                                                          ========================================

Liabilities and members' equity

Liabilities:
Accounts payable and accrued expenses                                        $       741           $      594
Due to affiliates                                                                    234                2,005
Lessee deposits and reserves for repairs                                           2,206                1,409
Note payable                                                                      25,000               25,000
                                                                          ----------------------------------------
    Total liabilities                                                             28,181               29,008
                                                                          ----------------------------------------

Members' equity:
Class A members (4,999,581 units as of June 30, 1998
      and December 31, 1997)                                                      74,078               72,298
Class B member                                                                       124                  176
                                                                          ----------------------------------------
    Total members' equity                                                         74,202               72,474
                                                                          ----------------------------------------

       Total liabilities and members' equity                                 $   102,383           $  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 Six Months
                                                           Ended June 30,                        June 30,

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

Lease revenue                                         $   5,006       $   4,108           $    9,300       $   7,625
Interest and other income                                    92             167                  289             215
Net gain on disposition of equipment                      2,713              --                2,741               4
                                                    -------------------------------------------------------------------
    Total revenues                                        7,811           4,275               12,330           7,844
                                                    -------------------------------------------------------------------

Expenses

Depreciation and amortization                             3,424           4,025                6,406           7,602
Repairs and maintenance                                     508             290                  773             559
Equipment operating expenses                                351             233                  589             475
Interest expense                                            458             459                  916             505
Insurance expense to affiliate                               22               2                   19               9
Other insurance expense                                      37              91                   87             144
Management fees to affiliate                                275             199                  512             432
General and administrative expenses
      to affiliates                                         231             155                  425             508
Other general and administrative expenses                   303             206                  464             328
                                                    -------------------------------------------------------------------
    Total expenses                                        5,609           5,660               10,191          10,562
                                                    -------------------------------------------------------------------

Equity in net income of unconsolidated
      special-purpose entities                            3,014              78                5,471             215
                                                    -------------------------------------------------------------------

      Net income (loss)                               $   5,216       $  (1,307 )         $    7,610       $  (2,503 )
                                                    ===================================================================

Members' share of net income (loss)

Class A members                                       $   4,764       $  (1,709 )         $    6,780       $  (3,308 )
Class B member                                              452             402                  830             805
                                                    -------------------------------------------------------------------

       Total                                          $   5,216       $  (1,307 )         $    7,610       $  (2,503 )
                                                    ===================================================================

Net income (loss) per weighted-average
      Class A unit (4,999,581 units as of
      June 30, 1998 and 1997)                         $    0.95       $   (0.34 )         $     1.36       $   (0.66 )
                                                    ===================================================================

Cash distributions                                    $   2,941       $   2,941           $    5,882       $   5,882
                                                    ===================================================================
Cash distributions per weighted-average
      Class A units                                   $    0.50       $    0.50           $     1.00       $    1.00
                                                    ===================================================================

</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 June 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                                                      6,780                  830                7,610

Cash distributions                                             (5,000)                (882)              (5,882 )
                                                     -------------------------------------------------------------

  Members' equity as of June 30, 1998                  $       74,078        $         124        $      74,202
                                                     =============================================================


</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 Six Months Ended June 30,
                            (in thousands of dollars)

<TABLE>
<CAPTION>



                                                                      1998                  1997
                                                              -------------------------------------------
<S>                                                             <C>                   <C>             
Operating activities
Net income (loss)                                               $         7,610       $        (2,503)
Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
  Depreciation and amortization                                           6,406                 7,602
  Net gain on disposition of equipment                                   (2,741)                   (4)
  Equity in net income of unconsolidated
        special-purpose entities                                         (5,471)                 (215)
  Changes in operating assets and liabilities:
    Restricted cash                                                          --                   223
    Accounts receivable, net                                                394                  (209)
    Prepaid expenses                                                        (38)                  160

    Accounts payable and accrued expenses                                   147                  (137)

    Due to affiliates                                                        22                    99
    Lessee deposits and reserves for repairs                                797                   212
                                                              -------------------------------------------
      Net cash provided by operating activities                           7,126                 5,228
                                                              -------------------------------------------

Investing activities
Payments for purchase of equipment and capital
      improvements                                                      (24,963)              (19,062)
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                                    5,481                    27
Distributions from unconsolidated special-purpose
      Entities                                                            6,113                 3,978
                                                              -------------------------------------------
      Net cash used in investing activities                             (16,296)              (20,157)
                                                              -------------------------------------------

Financing activities
Proceeds from note payable                                                   --                25,000
Payment due to affiliates                                                (1,793)                   --
Cash distributions to Class A members                                    (5,000)               (5,000)
Cash distributions to Class B member                                       (882)                 (882)
Payment of debt placement fees                                               --                  (177)
                                                              -------------------------------------------
      Net cash (used in) provided by financing activities                (7,675)               18,941
                                                              -------------------------------------------

Net (decrease) increase in cash and cash equivalents                    (16,845)                4,012
Cash and cash equivalents at beginning of period                         19,179                 1,692
                                                              -------------------------------------------
Cash and cash equivalents at end of period                      $         2,334       $         5,704
                                                              ===========================================

Supplemental information
Interest paid                                                   $           916       $           505
                                                              ===========================================
Sale proceeds included in accounts receivable                   $            38       $            --
                                                              ===========================================
</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
                                  June 30, 1998


1.   Opinion of Management

     In the opinion of the  management  of PLM  Financial  Services,  Inc.  (the
     Manager or FSI), 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 June 30,
     1998 and December 31, 1997,  the statements of operations for the three and
     six  months  ended June 30,  1998 and 1997,  the  statements  of changes in
     members' equity for the period from December 31, 1996 to June 30, 1998, and
     the  statements  of cash flows for the six months  ended June 30,  1998 and
     1997.  Certain  information and footnote  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 June 30, 1998 and 1997, and $5.9 million for each
     of the six months ended June 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 $0 and $5.0
     million for the six months ended June 30, 1998 and 1997, respectively, were
     deemed to be a return of capital. Cash distributions related to the results
     from the second  quarter of 1998,  of $1.7  million,  were paid  during the
     third quarter of 1998.

3.   Transactions with Manager and Affiliates

     The balance due to affiliates as of June 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 $53,000 and $24,000 were
     payable as of June 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 Six Months
                                                       Ended June 30,                     Ended June 30,

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

<S>                                               <C>            <C>                <C>             <C>      
Management fees                                   $      94      $      99          $     182       $     184
Data processing and administrative
   expenses                                              26             25                 56              44
Insurance expense                                        (1)             1                 (3)              5


</TABLE>


<PAGE>




               PROFESSIONAL LEASE MANAGEMENT INCOME FUND I, L.L.C.
                     (A Delaware Limited Liability Company)
                          NOTES TO FINANCIAL STATEMENTS
                                  June 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.  TEI did not provide the same
     insurance  coverage  during 1998 as had been  provided  during 1997.  These
     services were provided by an unaffiliated 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>

                                                June 30,              December 31,
                                                  1998                     1997
                                           -------------------------------------------

<S>                                           <C>                      <C>        
Marine vessels                                $    44,457              $    20,756
Aircraft                                           20,605                   24,605
Rail equipment                                     19,936                   18,958
Trailers                                           14,785                   14,813
                                           -------------------------------------------
                                                   99,783                   79,132
Less accumulated depreciation                     (30,472)                 (26,749)
                                           -------------------------------------------
      Net equipment                           $    69,311              $    52,383
                                           ===========================================
</TABLE>

     During the six months  ended June 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 $25.9  million.  During the six months
     ended June 30, 1997, the Company  purchased a mobile offshore drilling unit
     and a marine vessel for $19.1 million.

     During the six months  ended June 30,  1998,  the Company sold an aircraft,
     trailers and a rail equipment with a net book value of $2.8 million, net of
     outstanding  receivables,  for  proceeds  of $5.5  million.  During the six
     months ended June 30, 1997, the Company sold trailers with a net book value
     of $22,000, for proceeds of $26,000.

     As of June 30,  1998,  all  equipment  was either on lease or  operating in
     PLM-affiliated  short-term  trailer rental  facilities.  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
                                  June 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>

                                                                               June 30,               December 31,
                                                                                 1998                     1997
                                                                          --------------------------------------------
     <S>                                                                   <C>                      <C>            
     61% interest in an entity owning a mobile offshore drilling unit      $         9,080          $         9,766
     50% interest in a trust owning an MD-82 commercial aircraft                     7,384                       --
     50% interest in a trust owning an MD-82 commercial aircraft                     5,147                      682
     33%       interest in two trusts owning three 737-200A commercial 
               aircraft, two aircraft engines, and a portfolio of aircraft
               rotables                                                              4,386                    7,788
     50% interest in a trust owning a cargo marine vessel                            2,226                    2,638
     25% interest in a trust that owned four 737-200A commercial
               aircraft                                                                165                    2,215
     25% interest in a trust that owned four 737-200A commercial
               aircraft                                                                149                    3,163
         Net investments                                                   $        28,537          $        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 six
     months ended June 30, 1998, the Company and  affiliated  programs each sold
     the commercial  aircraft  designated in these Trusts.  The Company sold the
     commercial  aircraft  assigned to it with a net book value of $2.7  million
     for proceeds of $6.3 million.

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

     During the six months  ended June 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.
     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 June 30,  1998,  the  Company  had no
     borrowings under the short-term joint $60.0 million credit facility.  Among
     the other eligible borrowers, PLM Equipment Growth Fund V had borrowings of
     $1.6 million, AFG had borrowings of $44.8 million, and TEC Acquisub,  Inc.,
     an  indirect  wholly-owned  subsidiary  of  PLM  International,  Inc.,  had
     borrowings of $2.0 million under the short-term joint, $60.0 million credit
     facility  as  of  June  30,  1998.  No  other  eligible  borrower  had  any
     outstanding borrowings.



<PAGE>



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

(I)   RESULTS OF OPERATIONS

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

<S>                                                                     <C>               <C>     
Aircraft                                                                $  1,235          $  1,248
Marine vessels                                                             1,215               304
Rail equipment                                                               885               698
Trailers                                                                     765               778
Mobile offshore drilling unit                                                 --               483

</TABLE>

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $1.2 million and
$10,000,  respectively, for the second quarter of 1998, compared to $1.2 million
and  $12,000,  respectively,  during the same  quarter  of 1997.  The sale of an
aircraft  on the last day of the second  quarter of 1998 did not have a material
impact on lease revenue and direct expenses.

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $1.8
million and $0.6 million, respectively, for the second quarter of 1998, compared
to $0.6 million and $0.3 million, respectively, during the same quarter 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 1998.

Rail  equipment:  Rail equipment  lease  revenues and direct  expenses were $1.0
million and $0.1 million, respectively, for the second quarter of 1998, compared
to $0.8 million and $0.1 million, respectively, during the same quarter of 1997.
Rail equipment  contribution increased due to the purchase of rail equipments in
the first quarter of 1998.

Trailers:  Trailer  revenues  and direct  expenses  were $0.9  million  and $0.1
million,  respectively,  for the  second  quarter  of  1998  and  1997.  Trailer
contribution  remained  the same due to the  relative  stability  of the trailer
fleet.

Mobile  offshore  drilling unit:  Revenues and direct expenses were $0.5 million
and $18,000, respectively,  during the second 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 second quarter of 1998.

(B) Interest and Other Income

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

(C) Indirect Expenses Related to Owned Equipment Operations

Total  indirect  expenses of $4.7  million  for the quarter  ended June 30, 1998
decreased from $5.0 million for the same period in 1997.  Significant  variances
are explained as follows:

     (1) A $0.6 million decrease in depreciation and amortization  expenses from
1997 levels reflects the Company's  double-declining balance depreciation method
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  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.

     (3) A $0.2 million  increase in  administrative  expenses  from 1997 levels
resulted from  increased  administrative  costs  associated  with the short-term
trailer  rental  facilities.  The  Company  also  incurred  higher  professional
services and printing costs in the second quarter of 1998,  compared to the same
period in 1997.

(D)  Net Gain on Disposition of Owned Equipment

The net gain on  disposition of equipment for the second quarter of 1998 totaled
$2.7  million,  and resulted  from the sale of an aircraft and a trailer with an
aggregate net book value of $2.8 million,  net of outstanding  receivables,  for
proceeds of $5.5 million.  There was no sales or dispositions of owned equipment
in the second 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 June 30,
                                                                          1998               1997
                                                                      -------------------------------

<S>                                                                     <C>               <C>     
Aircraft                                                                $  3,006          $    445
Mobile offshore drilling unit                                                 99              (209 )
Marine vessel                                                                (91)             (158 )
       Equity in Net Income (Loss) of USPEs                             $  3,014          $     78
                                   ==================================================================
</TABLE>

Aircraft:  As of June 30, 1998,  the Company owned  interests in two trusts that
each own a  commercial  aircraft,  and an  interest in two trusts that own three
commercial aircraft, two aircraft engines, and a portfolio of aircraft rotables.
As of June 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 second
quarter of 1998,  aircraft  lease revenues of $1.1 million and the gain from the
sale of the Company's interest in a trust that owned four commercial aircraft of
$3.6 million was offset by expenses of $1.7  million.  During the same period in
1997,   lease  revenues  and  expenses  were  $1.5  million  and  $1.0  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  during 1998.  The
increase in the  expenses  was due  primarily  to the  double-declining  balance
method of depreciation  of the investment in two additional  trusts during 1998,
which was offset in part by the sale of the Company's interest in two trusts.

Mobile offshore  drilling unit: As of June 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 second quarter of 1998, compared to $0.6 million and $0.8
million,  respectively,  during the same quarter of 1997.  Expenses decreased in
the  second  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.

Marine  vessel:  As of June 30, 1998 and 1997, the Company had an interest in an
entity that owns a marine vessel.  Marine vessel revenues and expenses were $0.3
million and $0.4 million, respectively, for the second quarter of 1998, compared
to $0.3 million and $0.5 million, respectively,  during the same period in 1997.
Expenses  decreased in the second quarter of 1998 compared to the same period in
1997, due to the use of the double-declining  balance depreciation method, which
results in greater depreciation in the early years an asset is owned.

(F) Net Income (Loss)

As a result of the  foregoing,  the Company had a net income of $5.2 million for
the second  quarter of 1998,  compared to a net loss of $1.3 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 second quarter of 1998 is
not necessarily indicative of future periods. In the second 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 Six Months Ended June 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 six months ended June 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 Six Months
                                                                              Ended June 30,
                                                                          1998              1997
                                                                      ------------------------------

<S>                                                                     <C>               <C>    
Aircraft                                                                $ 2,487           $ 2,500
Marine vessel                                                             2,172               518
Rail equipment                                                            1,755             1,397
Trailers                                                                  1,441             1,492
Mobile offshore drilling unit                                                --               554

</TABLE>

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $2.5 million and
$23,000,  respectively,  during the six months ended June 30, 1998,  compared to
$2.5 million and $19,000, respectively, during the same period of 1997. The sale
of an  aircraft  on the last day of the  second  quarter  of 1998 did not have a
material impact on lease revenues and direct expenses.

Marine  vessel:  Marine  vessel  lease  revenues and direct  expenses  were $3.1
million and $0.9 million,  respectively, for the six months ended June 30, 1998,
compared to $1.2 million and $0.7 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
six months ended June 30, 1998.

Rail  equipment:  Rail equipment  lease  revenues and direct  expenses were $2.0
million and $0.2 million,  respectively, for the six months ended June 30, 1998,
compared to $1.6 million and $0.2 million, respectively,  during the same period
of 1997.  Lease  revenues  increased in the six 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 $1.7  million  and $0.3
million,  respectively, for the six months of 1998, compared to $1.7 million and
$0.2  million,  respectively,  during the same  period in 1997.  Lease  revenues
increased in the six months ended June 30, 1998,  compared to the same period in
1997 due to higher  utilization  earned on trailers  operating in the short-term
rental facilities. Expenses increased due to repairs repairs required on certain
trailers  in the six months  ended June 30,  1998,  which were not needed in the
same period in 1997.

Mobile  offshore  drilling unit:  Revenues and direct expenses were $0.6 million
and $18,000, respectively,  during the second 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 during the six months ended June 30, 1998.

(B) Indirect Expenses Related to Owned Equipment Operations

Total  indirect  expenses of $8.7 million for the six months ended June 30, 1998
decreased from $9.4 million for the same period of 1997.  Significant  variances
are explained as follows:

     (1) A $1.2 million decrease in depreciation and amortization  expenses from
1997 levels reflects the Company's  double-declining balance depreciation method
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 six months  ended June 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 six months ended June 30, 1998
totaled  $2.7  million,  and  resulted  from  the  sale of an  aircraft,  a rail
equipment and trailers with an aggregate net book value of $2.8 million,  net of
outstanding  receivables,  for  proceeds  of  $5.5  million.  Net  gain  on  the
disposition of equipment for the six months ended June 30, 1997 totaled  $4,000,
and  resulted  from the sale of trailers  with a net book value of $22,000,  for
proceeds of $26,000.

(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 Six Months
                                                                             Ended June 30,

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

<S>                                                                     <C>               <C>     
Aircraft                                                                $  5,446          $    892
Mobile offshore drilling unit                                                242              (473)
Marine vessel                                                               (217)             (204)
                                                                      -------------------------------
                                                                        $  5,471          $    215
                                                                      ===============================
</TABLE>

Aircraft:  As of June 30, 1998,  the Company owned  interests in two trusts that
each own a  commercial  aircraft,  and an  interest in two trusts that own three
commercial aircraft, two aircraft engines, and a portfolio of aircraft rotables.
As of June 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 six
months ended June 30, 1998,  aircraft  lease  revenues were $2.5 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 $3.3 million. During the same
period in 1997,  lease revenues and expenses were $3.0 million and $2.1 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  during 1998.  The
increase in expenses was due primarily to the double-declining balance method of
depreciation of the investment in two additional  trusts during 1998,  which was
offset in part by the sale of the Company's interest in two trusts.

Mobile offshore  drilling unit: As of June 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  $1.2  million  and $1.0  million,
respectively,  for the six months ended June 30, 1998,  compared to $0.9 million
and $1.4 million, respectively, during the same period in 1997. Rig contribution
increased in the six months ended June 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.

Marine  vessel:  As of June 30, 1998 and 1997, the Company had an interest in an
entity that owns a marine vessel.  Marine vessel revenues and expenses were $0.6
million and $0.8 million,  respectively,  for the six months ended June 30, 1998
and 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,  which was offset by the increase in marine  operating  expenses
due to crew overtime costs in the six months ended June 30, 1998,  which did not
occur in the same period in 1997.

(E)       Net Income (Loss)

As a result of the  foregoing,  the Company had a net income of $7.6 million for
the six months ended June 30, 1998,  compared to net loss of $2.5 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 six months ended June 30,
1998 is not necessarily  indicative of future  periods.  In the six months ended
June 30, 1998, the Company  distributed $5.0 million to the Class A members,  or
$1.00 per weighted-average Class A unit.

(II)      FINANCIAL CONDITION -- CAPITAL RESOURCES AND LIQUIDITY

For the six months ended June 30, 1998, the Company  generated  $13.4 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
six months ended June 30, 1998 of $5.9 million) to the members.

During the six  months  ended  June 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 $25.9 million.

The Manager entered into a short-term, joint $50.0 million credit facility. 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. As of August 3, 1998,  the Company had no borrowing  under the  short-term
joint $55.0 million credit facility. Among the other eligible borrowers, AFG had
borrowings of $43.0 million,  and TEC Acquisub,  Inc., an indirect  wholly-owned
subsidiary of PLM International,  Inc., had borrowings of $2.0 million under the
short-term  joint,  $55.0 million credit facility as of August 3, 1998. No other
eligible borrower had any outstanding borrowings.

(III) YEAR 2000 COMPLIANCE

The Manager is currently addressing the Year 2000 computer software issue and is
creating a timetable  for  carrying  out any program  modifications  that may be
required,  and  does  not  anticipate  that  the  cost  of  those  modifications
allocatable to the Company will be material.

(IV)  ACCOUNTING PRONOUNCEMENTS

In  June  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 June 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 June 15, 1999. As of June 30, 1998, the
Manager  is  reviewing  the  effect  this  standard  will have on the  Company's
consolidated 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 six 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.




<PAGE>




                          PART II -- OTHER INFORMATION



Item 6.           Exhibits and Reports on Form 8-K

         (a)      Exhibits

         10.1     First Amendment to Restated Warehousing Credit Agreement among
                  American  Finance  Group,  Inc.,  First Union National Bank of
                  North  Carolina,  and  Bank of  Montreal,  dated as of June 1,
                  1998.

         10.2     Second  Amendment  to Restated  Warehousing  Credit  Agreement
                  among American Finance Group, Inc., First Union National Bank,
                  and Bank of Montreal, dated as of June 8, 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: August 3, 1998      By:  /s/ Richard K Brock
                               ---------------------
                               Richard K Brock
                               Vice President and
                               Corporate Controller




<PAGE>