SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                           FORM 10-QSB

           Quarterly Report Under Section 13 or 15(d)
             of The Securities Exchange Act of 1934

           For the Quarter Ended:  September 30, 2000

                Commission file number:  0-29274


           AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)


     State of Minnesota                    41-1789725
(State or other Jurisdiction of         (I.R.S. Employer
Incorporation or Organization)        Identification No.)


  1300 Minnesota World Trade Center, St. Paul, Minnesota 55101
            (Address of Principal Executive Offices)

                         (651) 227-7333
                   (Issuer's telephone number)


                         Not Applicable
 (Former name, former address and former fiscal year, if changed
                       since last report)

Check  whether  the issuer (1) filed all reports required  to  be
filed  by Section 13 or 15(d) of the Securities Exchange  Act  of
1934  during the preceding 12 months (or for such shorter  period
that  the registrant was required to file such reports), and  (2)
has  been  subject to such filing requirements for  the  past  90
days.

                        Yes  [X]   No

         Transitional Small Business Disclosure Format:

                        Yes        No  [X]




        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP


                              INDEX




PART I. Financial Information

 Item 1. Balance Sheet as of September 30, 2000 and December 31, 1999

          Statements for the Periods ended September 30, 2000 and 1999:

            Income

            Cash Flows

            Changes in Partners' Capital

          Notes to Financial Statements

 Item 2. Management's Discussion and Analysis

PART II.Other Information

 Item 1. Legal Proceedings

 Item 2. Changes in Securities

 Item 3. Defaults Upon Senior Securities

 Item 4. Submission of Matters to a Vote of Security Holders

 Item 5. Other Information

 Item 6. Exhibits and Reports on Form 8-K

<PAGE>
        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

                          BALANCE SHEET

            SEPTEMBER 30, 2000 AND DECEMBER 31, 1999

                           (Unaudited)

                             ASSETS

                                                      2000           1999

CURRENT ASSETS:
  Cash and Cash Equivalents                       $ 1,391,929    $ 2,412,278
  Receivables                                           4,080              0
  Short-Term Note Receivable                          680,000              0
                                                   -----------    -----------
      Total Current Assets                          2,076,009      2,412,278
                                                   -----------    -----------
INVESTMENTS IN REAL ESTATE:
  Land                                              6,186,440      5,933,670
  Buildings and Equipment                          10,902,068     10,818,262
  Property Acquisition Costs                           28,083         14,304
  Accumulated Depreciation                         (1,393,792)    (1,194,034)
                                                   -----------    -----------
      Net Investments in Real Estate               15,722,799     15,572,202
                                                   -----------    -----------
           Total  Assets                          $17,798,808    $17,984,480
                                                   ===========    ===========


                        LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.            $    64,871    $    20,786
  Distributions Payable                               390,738        390,738
                                                   -----------    -----------
      Total Current Liabilities                       455,609        411,524
                                                   -----------    -----------
PARTNERS' CAPITAL (DEFICIT):
  General Partners                                    (35,754)       (33,456)
  Limited Partners, $1,000 Unit Value;
   24,000 Units authorized and issued;
   23,548 outstanding                              17,378,953     17,606,412
                                                   -----------    -----------
      Total Partners' Capital                      17,343,199     17,572,956
                                                   -----------    -----------
         Total Liabilities and Partners' Capital  $17,798,808    $17,984,480
                                                   ===========    ===========


 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>

        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

                       STATEMENT OF INCOME

               FOR THE PERIODS ENDED SEPTEMBER 30

                           (Unaudited)


                                 Three Months Ended        Nine Months Ended
                               9/30/00       9/30/99     9/30/00       9/30/99

INCOME:
   Rent                       $437,732     $465,581   $1,292,159   $1,420,395
   Investment Income            39,911        7,444       95,510       14,045
                               --------     --------   ----------   ----------
        Total Income           477,643      473,025    1,387,669    1,434,440
                               --------     --------   ----------   ----------

EXPENSES:
   Partnership Administration -
     Affiliates                 69,897       57,109      201,130      175,086
   Partnership Administration
     and Property Management -
     Unrelated Parties          15,904       22,472       62,395       66,748
   Depreciation                116,351      127,276      353,409      384,696
                               --------     --------   ----------   ----------
        Total Expenses         202,152      206,857      616,934      626,530
                               --------     --------   ----------   ----------

OPERATING INCOME               275,491      266,168      770,735      807,910

GAIN ON SALE OF REAL ESTATE    181,328      163,463      181,328      163,463
                               --------     --------   ----------   ----------
NET INCOME                    $456,819     $429,631   $  952,063   $  971,373
                               ========     ========   ==========   ==========

NET INCOME ALLOCATED:
   General Partners           $  4,569     $  4,296   $    9,521   $    9,714
   Limited Partners            452,250      425,335      942,542      961,659
                               --------     --------   ----------   ----------
                              $456,819     $429,631   $  952,063   $  971,373
                               ========     ========   ==========   ==========

NET INCOME PER
 LIMITED PARTNERSHIP UNIT
 (23,548 and 23,829 weighted
 average Units outstanding in
 2000 and 1999, respectively) $  19.21     $  17.85   $    40.03   $    40.36
                               ========     ========   ==========   ==========


 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

                     STATEMENT OF CASH FLOWS

               FOR THE PERIODS ENDED SEPTEMBER 30

                           (Unaudited)

                                                        2000           1999

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net   Income                                     $   952,063   $   971,373

   Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
     Depreciation                                       353,409       384,696
     Gain on Sale of Real Estate                       (181,328)     (163,463)
     (Increase) Decrease in Receivables                  (4,080)       16,052
     Increase (Decrease) in Payable to
        AEI Fund Management, Inc.                        44,085       (20,835)
                                                     -----------   -----------
        Total Adjustments                               212,086       216,450
                                                     -----------   -----------
        Net Cash Provided By
        Operating Activities                          1,164,149     1,187,823
                                                     -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Investments in Real Estate                        (1,335,340)     (221,884)
   Proceeds from Sale of Real Estate                    332,662       657,632
                                                     -----------   -----------
        Net Cash Provided By (Used For)
          Investing Activities                       (1,002,678)      435,748
                                                     -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Decrease in Distributions Payable                          0       (60,200)
   Distributions to Partners                         (1,181,820)   (1,212,501)
                                                     -----------   -----------
        Net Cash Used For
         Financing Activities                        (1,181,820)   (1,272,701)
                                                     -----------   -----------
NET INCREASE (DECREASE) IN CASH
    AND CASH EQUIVALENTS                             (1,020,349)      350,870

CASH AND CASH EQUIVALENTS, beginning of period        2,412,278       557,646
                                                     -----------   -----------
CASH AND CASH EQUIVALENTS, end of period            $ 1,391,929   $   908,516
                                                     ===========   ===========

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITIES:
   Note Receivable Acquired in Sale of Property     $   680,000
                                                     ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

            STATEMENT OF CHANGES IN PARTNERS' CAPITAL

               FOR THE PERIODS ENDED SEPTEMBER 30

                           (Unaudited)

                                                                     Limited
                                                                   Partnership
                              General      Limited                    Units
                              Partners     Partners      Total     Outstanding


BALANCE, December 31, 1998   $(30,953)  $17,854,240   $17,823,287   23,828.87

  Distributions               (12,125)   (1,200,376)   (1,212,501)

  Net Income                    9,714       961,659       971,373
                              --------   -----------   -----------  ----------
BALANCE, September 30, 1999  $(33,364)  $17,615,523   $17,582,159   23,828.87
                              ========   ===========   ===========  ==========


BALANCE, December 31, 1999   $(33,456)  $17,606,412   $17,572,956   23,548.50

  Distributions               (11,819)   (1,170,001)   (1,181,820)

  Net Income                    9,521       942,542       952,063
                              --------   -----------   -----------  ----------
BALANCE, September 30, 2000  $(35,754)  $17,378,953   $17,343,199   23,548.50
                              ========   ===========   ===========  ==========


 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

                  NOTES TO FINANCIAL STATEMENTS

                       SEPTEMBER 30, 2000

                           (Unaudited)


(1)  The  condensed  statements included herein have been  prepared
     by  the Partnership, without audit, pursuant to the rules  and
     regulations  of  the Securities and Exchange  Commission,  and
     reflect   all  adjustments  which  are,  in  the  opinion   of
     management,  necessary to a fair statement of the  results  of
     operations for the interim period, on a basis consistent  with
     the  annual audited statements.  The adjustments made to these
     condensed   statements  consist  only  of   normal   recurring
     adjustments.   Certain information, accounting  policies,  and
     footnote    disclosures   normally   included   in   financial
     statements  prepared  in  accordance with  generally  accepted
     accounting principles have been condensed or omitted  pursuant
     to  such  rules  and  regulations,  although  the  Partnership
     believes  that  the  disclosures  are  adequate  to  make  the
     information  presented not misleading.  It is  suggested  that
     these  condensed financial statements be read  in  conjunction
     with  the  financial statements and the summary of significant
     accounting  policies  and  notes  thereto  included   in   the
     Partnership's latest annual report on Form 10-KSB.

(2)  Organization -

     AEI   Income   &   Growth   Fund  XXI  Limited   Partnership
     (Partnership)  was  formed to acquire and  lease  commercial
     properties   to   operating  tenants.    The   Partnership's
     operations  are  managed by AEI Fund  Management  XXI,  Inc.
     (AFM), the Managing General Partner.  Robert P. Johnson, the
     President  and  sole  shareholder  of  AFM,  serves  as  the
     Individual General Partner and an affiliate of AFM, AEI Fund
     Management,  Inc.  (AEI), performs  the  administrative  and
     operating functions for the Partnership.

     The   terms   of  the  Partnership  offering  call   for   a
     subscription  price of $1,000 per Limited Partnership  Unit,
     payable   on  acceptance  of  the  offer.   The  Partnership
     commenced   operations  on  April  14,  1995  when   minimum
     subscriptions    of   1,500   Limited   Partnership    Units
     ($1,500,000)  were  accepted.   On  January  31,  1997,  the
     offering  terminated when the maximum subscription limit  of
     24,000 Limited Partnership Units ($24,000,000) was reached.

     Under  the  terms of the Limited Partnership Agreement,  the
     Limited  Partners and General Partners contributed funds  of
     $24,000,000  and  $1,000, respectively.  During  operations,
     any  Net  Cash Flow, as defined, which the General  Partners
     determine  to  distribute will be  distributed  90%  to  the
     Limited  Partners and 10% to the General Partners; provided,
     however,  that  such distributions to the  General  Partners
     will be subordinated to the Limited Partners first receiving
     an annual, noncumulative distribution of Net Cash Flow equal
     to  10%  of their Adjusted Capital Contribution, as defined,
     and,  provided  further, that in no event will  the  General
     Partners  receive  less than 1% of such Net  Cash  Flow  per
     annum.   Distributions to Limited Partners will be made  pro
     rata by Units.


        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

                  NOTES TO FINANCIAL STATEMENTS

                       SEPTEMBER 30, 2000
                           (Continued)

(2)  Organization - (Continued)

     Any  Net  Proceeds  of Sale, as defined, from  the  sale  or
     financing of properties which the General Partners determine
     to distribute will, after provisions for debts and reserves,
     be  paid  in  the following manner: (i) first,  99%  to  the
     Limited  Partners and 1% to the General Partners  until  the
     Limited  Partners  receive an amount  equal  to:  (a)  their
     Adjusted  Capital Contribution plus (b) an amount  equal  to
     10%  of  their  Adjusted  Capital  Contribution  per  annum,
     cumulative  but not compounded, to the extent not previously
     distributed  from Net Cash Flow; (ii) any remaining  balance
     will  be distributed 90% to the Limited Partners and 10%  to
     the General Partners.  Distributions to the Limited Partners
     will be made pro rata by Units.

     For  tax  purposes,  profits  from  operations,  other  than
     profits  attributable  to  the  sale,  exchange,  financing,
     refinancing  or  other  disposition  of  property,  will  be
     allocated  first  in the same ratio in  which,  and  to  the
     extent,  Net  Cash Flow is distributed to the  Partners  for
     such year.  Any additional profits will be allocated in  the
     same  ratio  as  the  last  dollar  of  Net  Cash  Flow   is
     distributed.   Net losses from operations will be  allocated
     99% to the Limited Partners and 1% to the General Partners.

     For  tax purposes, profits arising from the sale, financing,
     or  other  disposition  of property  will  be  allocated  in
     accordance  with the Partnership Agreement as  follows:  (i)
     first,  to  those  partners with deficit balances  in  their
     capital  accounts  in an amount equal to  the  sum  of  such
     deficit  balances; (ii) second, 99% to the Limited  Partners
     and  1%  to the General Partners until the aggregate balance
     in  the Limited Partners' capital accounts equals the sum of
     the Limited Partners' Adjusted Capital Contributions plus an
     amount  equal to 10% of their Adjusted Capital Contributions
     per  annum, cumulative but not compounded, to the extent not
     previously  allocated;  (iii)  third,  the  balance  of  any
     remaining  gain  will then be allocated 90% to  the  Limited
     Partners  and 10% to the General Partners.  Losses  will  be
     allocated 98% to the Limited Partners and 2% to the  General
     Partners.

     The  General Partners are not required to currently  fund  a
     deficit   capital   balance.   Upon   liquidation   of   the
     Partnership or withdrawal by a General Partner, the  General
     Partners will contribute to the Partnership an amount  equal
     to  the  lesser  of  the deficit balances in  their  capital
     accounts  or  1%  of  total Limited  Partners'  and  General
     Partners' capital contributions.

(3)  Short-Term Note Receivable -

     On  August 2, 2000, the Partnership received a Contract  for
     Deed  from an affiliate of the buyer of the Media Play store
     in  Apple Valley, Minnesota.  The Note bears interest at  9%
     and  is  due December 2, 2000.  The Note is secured  by  the
     land, building and equipment.  As of September 30, 2000, the
     Partnership's share of outstanding principal due on the Note
     is $680,000.


        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

                  NOTES TO FINANCIAL STATEMENTS

                       SEPTEMBER 30, 2000
                           (Continued)

(4)  Investments in Real Estate -

     During   the  third  and  fourth  quarters  of   1999,   the
     Partnership  sold  85.0382% of its interest  in  the  Arby's
     restaurant in four separate transactions to unrelated  third
     parties.   The Partnership received total net sale  proceeds
     of  $881,682 which resulted in a total net gain of $220,469.
     The  total cost and related accumulated depreciation of  the
     interest sold was $731,056 and $69,843, respectively.

     On October 26, 1999, the Partnership sold the Caribou Coffee
     store to an unrelated third party.  The Partnership received
     net  sale  proceeds of $1,553,867, which resulted in  a  net
     gain of $301,764.  At the time of sale, the cost and related
     accumulated depreciation of the property was $1,310,597  and
     $58,494, respectively.

     On  August  2,  2000, the Media Play store was  sold  to  an
     unrelated  third party for $2,500,000.  The  sale  agreement
     required  $500,000  in  cash and a $2,000,000  contract  for
     deed,  which  bears interest at 9%.  The contract  for  deed
     assisted  the  buyer  in closing on the property,  prior  to
     obtaining  long-term financing, and is due  on  December  2,
     2000.  The Partnership's share of the net sale proceeds  was
     $820,651, which resulted in a net gain of $129,813.  At  the
     time  of sale, the cost and related accumulated depreciation
     was $833,860 and $143,022.

     On  September 28, 2000, the Partnership sold 3.3219% of  its
     interest  in the Champps Americana restaurant in Schaumburg,
     Illinois  to  an  unrelated third  party.   The  Partnership
     received net sale proceeds of $192,011 which resulted  in  a
     net  gain  of  $51,515.   The cost and  related  accumulated
     depreciation of the interest sold was $151,124 and  $10,628,
     respectively.

     Subsequent  to September 30, 2000, the Partnership  sold  an
     additional 2.9495% of its interest in the Champps  Americana
     restaurant  in  Schaumburg, Illinois to an  unrelated  third
     party.   The  Partnership  received  net  sale  proceeds  of
     approximately  $167,000 which resulted  in  a  net  gain  of
     approximately $43,000.

     During  the  first  nine  months  of  2000  and  1999,   the
     Partnership distributed $55,577 and $19,895 of the net  sale
     proceeds  to  the Limited and General Partners  as  part  of
     their  regular  quarterly distributions which represented  a
     return of capital of $2.34 and $0.83 per Limited Partnership
     Unit,  respectively.  The remaining net sale  proceeds  will
     either  be  reinvested in additional property or distributed
     to the Partners in the future.


        AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP

                  NOTES TO FINANCIAL STATEMENTS

                       SEPTEMBER 30, 2000
                           (Continued)

(4)  Investments in Real Estate - (Continued)

     On August 28, 1998, the Partnership purchased a 25% interest
     in  a parcel of land in Centerville, Ohio for $462,747.  The
     land is leased to Americana Dining Corporation (ADC) under a
     Lease  Agreement with a primary term of 20 years and  annual
     rental  payments of $32,392.  Effective December  25,  1998,
     the  annual  rent was increased to $48,588.   Simultaneously
     with  the purchase of the land, the Partnership entered into
     a   Development   Financing  Agreement   under   which   the
     Partnership advanced funds to ADC for the construction of  a
     Champps  Americana restaurant on the site.   Initially,  the
     Partnership charged interest on the advances at  a  rate  of
     7%.   Effective  December 25, 1998, the  interest  rate  was
     increased  to  10.5%.   On  January  27,  1999,  after   the
     development  was completed, the Lease Agreement was  amended
     to   require  annual  rental  payments  of  $101,365.    The
     Partnership's   share  of  the  total   acquisition   costs,
     including the cost of the land, was $984,426.  The remaining
     interests in the Fund property are owned by AEI Real  Estate
     Fund  XVII  Limited Partnership, AEI Real Estate Fund  XVIII
     Limited  Partnership  and  AEI Income  &  Growth  Fund  XXII
     Limited Partnership, affiliates of the Partnership.

     On March 8, 2000, the Partnership purchased a parcel of land
     in  Fort Wayne, Indiana for $549,000.  The land is leased to
     Tumbleweed,  Inc.  (TWI)  under a  Lease  Agreement  with  a
     primary  term  of  15  years and annual rental  payments  of
     $48,038.  Simultaneously with the purchase of the land,  the
     Partnership  entered into a Development Financing  Agreement
     under  which the Partnership advanced funds to TWI  for  the
     construction  of  a  Tumbleweed  restaurant  on  the   site.
     Initially, the Partnership charged interest on the  advances
     at  a  rate of 8.75%.  Effective July 5, 2000, the  interest
     rate  was increased to 9.875%.  On September 11, 2000, after
     the  development  was  completed, the  Lease  Agreement  was
     amended  to  require  annual rental  payments  of  $132,621.
     Total  acquisition costs, including the cost  of  the  land,
     were $1,321,561.

     The  Partnership has incurred net costs of $28,083  relating
     to  the review of potential property acquisitions which have
     been   capitalized  and  will  be  allocated  to  properties
     acquired in future periods.

(5)  Payable to AEI Fund Management, Inc. -

     AEI  Fund  Management, Inc. performs the administrative  and
     operating functions for the Partnership.  The payable to AEI
     Fund   Management  represents  the  balance  due  for  those
     services.    This  balance  is  non-interest   bearing   and
     unsecured  and  is  to  be  paid in  the  normal  course  of
     business.



ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS

Results of Operations

       For the nine months ended September 30, 2000 and 1999, the
Partnership   recognized   rental  income   of   $1,292,159   and
$1,420,395,   respectively.   During  the   same   periods,   the
Partnership  earned  investment income of  $95,510  and  $14,045,
respectively.   In  2000, rental income  decreased  mainly  as  a
result of property sales in 1999.  This decrease in rental income
was  partially  offset  by  additional  rent  received  from  one
property  acquisition in 2000, rent increases on three properties
and  by  an  increase  in investment income earned  on  the  sale
proceeds prior to the purchase of additional property.

        During the nine months ended September 30, 2000 and 1999,
the  Partnership  paid  Partnership  administration  expenses  to
affiliated parties of $201,130 and $175,086, respectively.  These
administration  expenses  include  costs  associated   with   the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners.   During
the   same   periods,   the  Partnership   incurred   Partnership
administration  and property management expenses  from  unrelated
parties  of  $62,395 and $66,748, respectively.   These  expenses
represent  direct payments to third parties for legal and  filing
fees,  direct administrative costs, outside audit and  accounting
costs, taxes, insurance and other property costs.

         As   of  September  30,  2000,  the  Partnership's  cash
distribution rate was 6.5% on an annualized basis.  Distributions
of Net Cash Flow to the General Partners were subordinated to the
Limited Partners as required in the Partnership Agreement.  As  a
result, 99% of distributions and income were allocated to Limited
Partners and 1% to the General Partners.

        Inflation  has  had  a  minimal  effect  on  income  from
operations.   The  Leases contain cost of living increases  which
will result in an increase in rental income over the term of  the
Leases.   Inflation also may cause the Partnership's real  estate
to  appreciate in value.  However, inflation and changing  prices
may  also have an adverse impact on the operating margins of  the
properties' tenants which could impair their ability to pay  rent
and subsequently reduce the Partnership's Net Cash Flow available
for distributions.

Liquidity and Capital Resources

        During  the  nine months ended September  30,  2000,  the
Partnership's  cash  balances decreased $1,020,349  mainly  as  a
result  of  cash  used to purchase property which  was  partially
offset  by  cash generated from the sale of property.   Net  cash
provided  by  operating activities decreased from  $1,187,823  in
1999  to  $1,164,149 in 2000 as a result of a decrease in  income
and  an increase in expenses in 2000, which were partially offset
by  net timing differences in the collection of payments from the
lessees and the payment of expenses.

        The  major components of the Partnership's cash flow from
investing activities are investments in real estate and  proceeds
from  the  sale  of  real estate.  During the nine  months  ended
September 30, 2000 and 1999, the Partnership generated cash  flow
from   the   sale  of  real  estate  of  $332,662  and  $657,632,
respectively.  During the same periods, the Partnership  expended
$1,335,340  and  $221,884,  respectively,  to  invest   in   real
properties (inclusive of acquisition expenses) as the Partnership
reinvested the cash generated from property sales.

        During  the  third  and  fourth  quarters  of  1999,  the
Partnership  sold  85.0382%  of  its  interest  in   the   Arby's
restaurant  in  four  separate transactions  to  unrelated  third
parties.   The  Partnership received total net sale  proceeds  of
$881,682  which  resulted in a total net gain of  $220,469.   The
total  cost and related accumulated depreciation of the  interest
sold was $731,056 and $69,843, respectively.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS  (Continued)

        On  October  26, 1999, the Partnership sold  the  Caribou
Coffee  store  to  an  unrelated third  party.   The  Partnership
received net sale proceeds of $1,553,867, which resulted in a net
gain  of  $301,764.  At the time of sale, the  cost  and  related
accumulated  depreciation  of  the property  was  $1,310,597  and
$58,494, respectively.

        On  August 2, 2000, the Media Play store was sold  to  an
unrelated   third  party  for  $2,500,000.   The  sale  agreement
required  $500,000  in cash and a $2,000,000 contract  for  deed,
which  bears interest at 9%.  The contract for deed assisted  the
buyer  in  closing on the property, prior to obtaining  long-term
financing,  and  is  due on December 2, 2000.  The  Partnership's
share of the net sale proceeds was $820,651, which resulted in  a
net  gain of $129,813.  At the time of sale, the cost and related
accumulated depreciation was $833,860 and $143,022.

       On September 28, 2000, the Partnership sold 3.3219% of its
interest  in  the  Champps  Americana restaurant  in  Schaumburg,
Illinois  to an unrelated third party.  The Partnership  received
net  sale  proceeds of $192,011 which resulted in a net  gain  of
$51,515.   The cost and related accumulated depreciation  of  the
interest sold was $151,124 and $10,628, respectively.

        Subsequent to September 30, 2000, the Partnership sold an
additional  2.9495%  of  its interest in  the  Champps  Americana
restaurant  in Schaumburg, Illinois to an unrelated third  party.
The  Partnership  received  net sale  proceeds  of  approximately
$167,000 which resulted in a net gain of approximately $43,000.

        During  the  first  nine months of  2000  and  1999,  the
Partnership  distributed  $55,577 and $19,895  of  the  net  sale
proceeds  to  the Limited and General Partners as part  of  their
regular  quarterly distributions which represented  a  return  of
capital  of  $2.34  and  $0.83  per  Limited  Partnership   Unit,
respectively.

        On  August  28,  1998, the Partnership  purchased  a  25%
interest  in a parcel of land in Centerville, Ohio for  $462,747.
The land is leased to Americana Dining Corporation (ADC) under  a
Lease Agreement with a primary term of 20 years and annual rental
payments  of  $32,392.  Effective December 25, 1998,  the  annual
rent  was increased to $48,588.  Simultaneously with the purchase
of the land, the Partnership entered into a Development Financing
Agreement under which the Partnership advanced funds to  ADC  for
the  construction of a Champps Americana restaurant on the  site.
Initially, the Partnership charged interest on the advances at  a
rate  of 7%.  Effective December 25, 1998, the interest rate  was
increased  to 10.5%.  On January 27, 1999, after the  development
was  completed, the Lease Agreement was amended to require annual
rental  payments  of $101,365.  The Partnership's  share  of  the
total  acquisition costs, including the cost  of  the  land,  was
$984,426.  The remaining interests in the Fund property are owned
by AEI Real Estate Fund XVII Limited Partnership, AEI Real Estate
Fund  XVIII Limited Partnership and AEI Income & Growth Fund XXII
Limited Partnership, affiliates of the Partnership.

        On  March 8, 2000, the Partnership purchased a parcel  of
land in Fort Wayne, Indiana for $549,000.  The land is leased  to
Tumbleweed,  Inc. (TWI) under a Lease Agreement  with  a  primary
term   of  15  years  and  annual  rental  payments  of  $48,038.
Simultaneously  with  the purchase of the land,  the  Partnership
entered  into a Development Financing Agreement under  which  the
Partnership  advanced  funds to TWI for  the  construction  of  a
Tumbleweed  restaurant on the site.  Initially,  the  Partnership
charged  interest on the advances at a rate of 8.75%.   Effective
July  5,  2000,  the interest rate was increased to  9.875%.   On
September  11,  2000, after the development  was  completed,  the
Lease Agreement was amended to require annual rental payments  of
$132,621.   Total acquisition costs, including the  cost  of  the
land, were $1,321,561.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS  (Continued)

       The Partnership's primary use of cash flow is distribution
and  redemption  payments to Partners.  The Partnership  declares
its  regular  quarterly  distributions before  the  end  of  each
quarter and pays the distribution in the first week after the end
of  each quarter.  The Partnership attempts to maintain a  stable
distribution  rate from quarter to quarter.  Redemption  payments
are  paid  to  redeeming Partners in the fourth quarter  of  each
year.   Effective  April 1, 1999, the Partnership's  distribution
rate  was  reduced from 7.0% to 6.5%.  As a result, distributions
were higher during the first nine months of 1999 when compared to
the same period in 2000.

        The  Partnership may acquire Units from Limited  Partners
who have tendered their Units to the Partnership.  Such Units may
be  acquired at a discount.  The Partnership is not obligated  to
purchase  in  any  year  more than 5%  of  the  number  of  Units
outstanding at the beginning of the year.  In no event shall  the
Partnership  be  obligated to purchase  Units  if,  in  the  sole
discretion  of the Managing General Partner, such purchase  would
impair the capital or operation of the Partnership.

        On  October 1, 2000, twelve Limited Partners  redeemed  a
total of 226.32 Partnership Units for $186,379 in accordance with
the  Partnership Agreement.  The Partnership acquired these Units
using  Net  Cash Flow from operations.  In prior years,  thirteen
Limited Partners redeemed a total of 451.47 Partnership Units for
$393,500.    The  redemptions  increase  the  remaining   Limited
Partners' ownership interest in the Partnership.

       The continuing rent payments from the properties, together
with  cash  generated from property sales, should be adequate  to
fund   continuing   distributions  and  meet  other   Partnership
obligations on both a short-term and long-term basis.

Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995

         The   foregoing  Management's  Discussion  and  Analysis
contains various "forward looking statements" within the  meaning
of   federal   securities   laws  which  represent   management's
expectations  or  beliefs  concerning  future  events,  including
statements  regarding anticipated application of  cash,  expected
returns  from rental income, growth in revenue, taxation  levels,
the  sufficiency  of  cash to meet operating expenses,  rates  of
distribution,  and  other  matters.   These,  and  other  forward
looking statements made by the Partnership, must be evaluated  in
the   context  of  a  number  of  factors  that  may  affect  the
Partnership's  financial  condition and  results  of  operations,
including the following:

         Market  and  economic conditions which affect the  value
         of  the  properties the Partnership owns and  the  cash
         from rental income such properties generate;

         the  federal  income tax consequences of rental  income,
         deductions,  gain  on  sales and other  items  and  the
         affects of these consequences for investors;

         resolution  by  the General Partners of  conflicts  with
         which they may be confronted;

         the   success  of  the  General  Partners  of   locating
         properties with favorable risk return characteristics;

         the effect of tenant defaults; and

         the  condition of the industries in which the tenants of
         properties owned by the Partnership operate.



                   PART II - OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

       There  are no material pending legal proceedings to  which
  the  Partnership  is  a  party or of  which  the  Partnership's
  property is subject.

ITEM 2.CHANGES IN SECURITIES

      None.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

      None.

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

      None

ITEM 5.OTHER INFORMATION

      None.

ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K

       a. Exhibits -
                          Description

          10.1   First   Amendment  to   Net   Lease
                 Agreement   dated   September   11,   2000
                 between  the  Partnership and  Tumbleweed,
                 Inc.  relating to the property at 8607  US
                 Highway 24 West, Fort Wayne, Indiana.

          10.2   Second  Amendment  to   Net   Lease
                 Agreement   dated   September   11,   2000
                 between  the  Partnership and  Tumbleweed,
                 Inc.  relating to the property at 8607  US
                 Highway 24 West, Fort Wayne, Indiana.

          10.3   Purchase  Agreement dated  September
                 26,  2000  between  the  Partnership,  Net
                 Lease  Income  & Growth Fund 84-A  Limited
                 Partnership  and Garden Ridge  Development
                 LLC  relating to the property at 955  Golf
                 Road, Schaumburg, Illinois.

          10.4   Purchase Agreement dated October  12,
                 2000  between the Partnership and the Neal
                 Goldman  Revocable Trust relating  to  the
                 property  at  955  Golf Road,  Schaumburg,
                 Illinois.

          27     Financial Data Schedule  for  period
                 ended September 30, 2000.

       b. Reports filed on Form  8-K - None.


                           SIGNATURES

        In  accordance with the requirements of the Exchange Act,
the  Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.


Dated:  November 7, 2000      AEI Income & Growth Fund XXI
                              Limited Partnership
                              By:  AEI Fund Management XXI, Inc.
                              Its: Managing General Partner



                              By: /s/ Robert P. Johnson
                                      Robert P. Johnson
                                      President
                                      (Principal Executive Officer)



                              By: /s/ Mark E. Larson
                                      Mark E. Larson
                                      Chief Financial Officer
                                      (Principal Accounting Officer)