<PAGE>
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

            (X) Annual Report Pursuant to Section 13 or 15 (d) of the
                         Securities Exchange Act of 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

           ( )Transition Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                  For the transition period from _____ to _____

                       Commission file number - 000-25593


                     TELECOMMUNICATIONS INCOME FUND XI, L.P.
                     ---------------------------------------
             (Exact name of registrant as specified in its charter)

            Iowa                                                 39-1904041
-------------------------------                               ----------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

              701 Tama Street, Marion, Iowa               52302
          --------------------------------------       ----------
         (Address of principal executive offices)      (Zip Code)

         Registrant's telephone number, including area code 319-447-5700

        Securities registered pursuant to Section 12(b) of the Act: NONE


                Securities pursuant to section 12 (g) of the Act:

                   Limited Partnership Interests (the "Units")
                   -------------------------------------------
                                (Title of class)


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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K (X).

As of March 1, 2002, 12,412 units were issued and outstanding. Based on the book
value of $410.51 per unit at December 31, 2001, the aggregate market value at
March 1, 2002 was $5,095,250.

DOCUMENTS INCORPORATED BY REFERENCE. Portions of the Registration Statement on
Form S-1, dated November 26, 1997, are incorporated by reference into Part IV.
<PAGE>
                     TELECOMMUNICATIONS INCOME FUND XI, L.P.
                          2001 FORM 10-K ANNUAL REPORT
                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                                              PAGE
<S>         <C>                                                               <C>
                                     PART I

Item 1.     Business ......................................................    3
Item 2.     Properties ....................................................    5
Item 3.     Legal Proceedings .............................................    5
Item 4.     Submission of Matters to a Vote of Unit Holders ...............    5


                                     PART II

Item 5.     Market for the Registrant's Common Equity and
               Related Stockholder Matters ................................    5
Item 6.     Selected Financial Data .......................................    5
Item 7.     Management's Discussion and Analysis of Financial Condition
               and Results of Operations ..................................    6
Item 7A.    Quantitative and Qualitative Disclosures About Market Risk ....   10
Item 8.     Financial Statements and Supplementary Data ...................   10
Item 9.     Changes in and Disagreements with Accountants
               on Accounting and Financial Disclosure .....................   26


                                    PART III

Item 10.    Directors and Executive Officers of the Registrant ............   26
Item 11.    Executive Compensation ........................................   27
Item 12.    Security Ownership of Certain Beneficial Owners and Management    28
Item 13.    Certain Relationships and Related Transactions ................   28


                                     PART IV

Item 14.    Exhibits, Financial Statement Schedules and Reports on Form 8-K   28

SIGNATURES ................................................................   29
EXHIBIT INDEX .............................................................   30
</TABLE>



                                       2
<PAGE>
                                     PART I

ITEM 1. BUSINESS

Telecommunications Income Fund XI, L.P., an Iowa limited partnership (the
"Partnership"), was organized on August 26, 1997. The general partner is Berthel
Fisher & Company Leasing, Inc. (the "General Partner"), an Iowa corporation that
has been in operation since 1988. The Partnership's business and the executive
offices of the General Partner are located at 701 Tama Street, Marion, Iowa
52302. Substantially all of the voting stock of the General Partner is owned by
Berthel Fisher & Company ("Berthel Fisher").

The Partnership began offering Units to the public on December 23, 1997. The
General Partner elected to extend the offering period and the closing date to
December 23, 1999. The business of the Partnership is the acquisition and
leasing of equipment, primarily telecommunications equipment such as pay
telephones and call processing equipment. The Partnership began its primary
business activities in February of 1998.

The Partnership will operate until December 31, 2012 unless dissolved sooner due
to the occurrence of any of the following events: (i) the vote by limited
partners owning a majority of the Partnership in accordance with the Partnership
Agreement; (ii) the withdrawal, bankruptcy, or dissolution and liquidation or
other cessation to exist as a legal entity of the General Partner (unless any
successor general partner elected in accordance with the provisions of the
Partnership Agreement elects to continue the business of the Partnership); (iii)
the final distribution of all liquidating distributions among the limited
partners pursuant to the Partnership Agreement; or (iv) the sale or disposition
of all or substantially all of the assets of the Partnership without the
subsequent reinvestment in equipment.

A significant portion of the Partnership's business is and is intended to be
with customers who are in the telecommunications industry. The
telecommunications industry, particularly the pay telephone and long distance
facets of the industry, is heavily regulated by the Federal Communications
Commission ("FCC") and by various state public utility commissions. Regulation
is not directed at the ownership or leasing of telecommunications equipment, but
is focused primarily on the business of the Partnership's customers that operate
in the telecommunications industry. Generally, regulation affects rates that can
be charged and the relationship of the regional Bell operating companies to the
rest of the pay telephone industry. Management does not expect regulation to
have any significant negative impact upon the business of the Partnership.

The principle investment objective of the Partnership is to obtain the maximum
available economic return from its investment in equipment leases to
unaffiliated third parties with a view toward: (i) generating cash flow from
operations, with the intent to make distributions during the Operating Phase
(the period which ends when the General Partner elects to begin the liquidation
of the Partnership assets); (ii) reinvesting (during the Operating Phase) any
undistributed cash flow from operations in additional equipment to be leased to
increase the Partnership's assets; (iii) obtaining the residual values of
equipment upon sale; (iv) obtaining value from sales of the Partnership's lease
portfolio upon entering the Liquidating Phase (the period during which the
General Partner will liquidate the Partnership assets); and (v) providing cash
distributions to the partners during the liquidating phase.

The Partnership intends to acquire primarily telecommunications equipment
(specifically pay telephones and call processing equipment) that is leased to
third parties. The Partnership has also acquired and will acquire other types of
equipment that is generally subject to leases. During 2001 the Partnership
acquired equipment subject to leases with a cost of $793,134. All of this
equipment has been leased.


                                       3
<PAGE>
Equipment acquired by the Partnership is installed in various locations by the
lessees. When the lessee installs the equipment in a location, a site location
agreement gives the lessee the right to have the equipment at this site for a
specified period of time. These site location agreements generally have a three
to five year term. The Partnership, in addition to its ownership of the
equipment, takes an assignment of and a first security interest in these site
location agreements. Therefore, if a lessee defaulted, the Partnership could
have the ability to re-sell or re-lease the equipment in place. This "in place"
value is generally much higher than the residual value of the equipment.
Telecommunications equipment generates revenue primarily through long distance
phone calls. The Partnership's lessee generally receives long distance revenue
from a contracted third party billing company. The Partnership also takes an
assignment of this revenue.

The General Partner acquires and approves leases on behalf of the Partnership.
The General Partner established guidelines to use in approving lessees.
Generally, before any lease is approved, there is a review of the potential
lessees' financial statements, credit references are checked, and outside
business and/or individual credit reports are obtained.

The equipment purchased by the Partnership consists of advanced technology pay
telephones and call processing systems to be used in hotels, hospitals,
colleges, universities, correctional institutions, and other locations. Although
the Partnership will concentrate its equipment acquisitions in
telecommunications equipment, it will also acquire other types of equipment that
meet the investment objectives of the Partnership.

The Partnership's equipment leases are concentrated in pay telephones,
industrial equipment, and computer equipment representing approximately 49%,
18%, and 23% of the Partnership's direct finance lease and notes receivable
portfolio at December 31, 2001, respectively. For the year ended December 31,
2001, no individual customers accounted for more than 10% of the income from
direct financing leases and notes receivable. Three customers account for
approximately 34% of the Partnership's net investment in direct financing leases
and notes receivable portfolio at December 31, 2001.

The telecommunications industry has seen a significant downturn in the last year
that has adversely affected the Partnership. The value of payphones and payphone
routes has declined substantially in recent years and is due to various factors,
including but not limited to the following:

      -  Lack of sufficient dial around revenues for payphone operators
      -  Decrease in usage of payphones, due to the use of mobile phones, etc.
      -  Lack of economies of scale being achieved with the cost of lines
         purchased from local exchange carriers
      -  Lack of available capital for payphone operators
      -  Decrease in the number of payphone operators

Management believes that these conditions may be overcome if current lobbying
efforts are successful and economic conditions become more favorable for
payphone operators. However, no assurance can be given that any of these
conditions may improve or that current values in the telecommunications industry
will not continue to decline.

The leasing industry is highly competitive and the Partnership has fewer assets
than some of its major competitors. The principal methods of competition include
service and price (interest rate). The Partnership operates in one segment.

The Partnership has no employees and utilizes the administrative services of the
General Partner for which it pays an administrative service fee.

                                       4
<PAGE>
ITEM 2. PROPERTIES

The Partnership does not own or lease any real estate. The Partnership's
materially important assets consist entirely of equipment under lease, primarily
telecommunications equipment, industrial equipment, and computer equipment, as
described in Item 1.

ITEM 3. LEGAL PROCEEDINGS

None.

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

No matters were submitted to a vote of limited partners, through the
solicitation of proxies or otherwise during the year covered by this report.


                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS

The Registrant's units are not publicly traded. There is no market for the
Registrant's units and it is unlikely that any will develop. The General Partner
will resist the development of a public market for the units.

<TABLE>
<CAPTION>
                                               Number of Partners
            Title of Class                       at March 1, 2002
            -----------------------------------------------------
<S>                                            <C>
            Limited Partner                                   674
            General Partner                                     1
</TABLE>

Distributions are paid to Partners on a monthly basis. Through December 31, 2001
distributions paid or payable to Partners over the life of the Partnership have
been $3,622,350. As of December 31, 2001 the Partnership had accrued
distributions to Partners of $99,296.


ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                                                  Period from
                                                                                                 Aug. 26, 1997
                              Year Ended       Year Ended       Year Ended      Year Ended     (Date of Incept.)
                             Dec. 31, 2001    Dec. 31, 2000    Dec. 31, 1999   Dec. 31, 1998   to Dec. 31, 1997
                             -------------    -------------    -------------   -------------   ----------------
<S>                          <C>              <C>              <C>             <C>             <C>
Total revenue                $    912,425     $  1,378,819     $  1,172,549    $    377,483     $         77
Net income (loss)              (2,633,022)        (399,728)         676,665         157,464             (407)
Total assets                    6,399,122       11,991,088       13,196,905       5,053,409           10,593
Line of credit agreement          898,873        2,374,423        1,973,142             -0-              -0-
Distributions to partners       1,202,320        1,208,928          886,545         324,559              -0-
Earnings (loss) per unit          (210.04)          (31.74)           72.99           46.18           (40.70)
Distributions per unit              95.91            96.00            95.63           95.18              -0-
</TABLE>

The above selected financial data should be read in connection with the
financial statements and related notes appearing elsewhere in this report.


                                       5
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
                                              Year Ended       Year Ended      Year Ended
                                             Dec. 31, 2001    Dec. 31, 2000   Dec. 31, 1999
                                             -------------    -------------   -------------
<S>                                          <C>              <C>             <C>
  Lease and notes receivable income          $  1,013,484     $  1,229,141    $  1,110,646
  Gain (loss) on lease terminations              (150,796)          70,238             (99)
  Interest and other income                        49,737           79,440          62,002
  Management fees                                  74,249          124,738          53,677
  Administrative service fees                     156,000          144,000          84,000
  Other general & administrative expenses         169,480          214,798         107,662
  Interest expense                                123,879          145,390          96,135
  Depreciation expense                            394,481              -0-             -0-
  Impairment loss                               1,299,457          584,966             -0-
  Provision for possible losses                 1,327,901          564,655         154,410
</TABLE>

The decrease in lease and notes receivable income in 2001 compared to 2000 and
1999 is due to a smaller portfolio of direct financing leases and notes
receivable and a significant number of lease and note contracts that are past
due over 90 days, at which time the Partnership places these contracts on a
non-accrual basis, as discussed below. The Partnership's net investment in
direct financing leases and notes receivable was $13,423,757 at December 31,
1999, $10,480,086 at December 31, 2000, and $8,247,891 at December 31, 2001.
During 2000, the Partnership acquired equipment for direct financing leases of
$4,155,148 and issued notes receivable in the amount of $1,752,939. During 2001,
the Partnership acquired equipment for direct financing leases of $793,134 and
issued notes receivable in the amount of $532,249. Interest and other income of
$49,737 in 2001 is primarily interest income on a money market account and other
investments, late charges on lease payments, and loan origination fees.

Certain lessees have requested early termination of their lease contracts with
the Partnership. As the payphone industry matures, the capital structure of
these lessees has reached a level whereby they are able to secure financing from
other sources. When this occurs, the Partnership will always quote an amount at
least equal to the Partnership's net investment and typically an amount
exceeding the net investment. In addition to some lessees improving capital
structure, some lessees have been acquired by other entities whose capital
structure is such that they also desire to refinance the equipment which was
under lease to the Partnership. As such, the Partnership's gain on lease
terminations can and will vary from year to year based on the number of requests
received to terminate leases as well as the size of the contract being
terminated. The Partnership uses the cash generated from these early
terminations to purchase equipment for investments in direct financing leases
with other lessees or issue notes receivable to other customers. For 2001, the
proceeds from early contract terminations were $1,634,435, resulting in a loss
of $150,796. For 2000, the proceeds from early contract terminations were
$3,948,093, resulting in a gain of $70,238.

Management fees are paid to the General Partner and represent 2% of the rental
and note payments received. Payments received in the years ended December 31 are
as follows:

<TABLE>
<CAPTION>
                                          2001          2000          1999
                                       ----------    ----------    ----------
<S>                                    <C>           <C>           <C>
  Rental and note payments received    $3,712,450    $6,236,900    $2,683,850
</TABLE>

The Partnership paid a monthly administrative service fee to the General Partner
of $7,000 in 1999, $12,000 in 2000, and $13,000 in 2001. The increase in
administrative fees paid is due to an increase in administrative costs incurred
by the General Partner on behalf of the Partnership.

Interest expense in 2001 was $123,879, compared to $145,390 in 2000 and $96,135
in 1999, and is the result of borrowings on the line of credit agreement. The
line of credit is used to invest in direct financing leases and issue notes
receivable, and for operations of the

                                       6
<PAGE>
Partnership. The balance outstanding on the line of credit at December 31, 2001
was $898,873.

In November 2000, the Partnership exercised its right to manage the assets
leased to Alpha Telecommunications, Inc. ("ATI") due to nonpayment of
receivables. The Partnership engaged a company to oversee the operations of the
pay phone routes and to attempt to sell the equipment. Depreciation expense on
this equipment was $394,481 for 2001. In March of 2001 the Partnership signed an
agreement to sell a portion of these phones for $286,114. The sale resulted in a
loss of $115,476. In the fourth quarter, the Partnership agreed to sell the
remaining equipment to the company that was operating the phones for $224,000.
The Partnership has written the equipment down to this sales price and incurred
an impairment loss of $1,124,457 on the equipment in 2001, in addition to an
impairment loss of $584,966 in 2000. During 2001, the additional losses on this
equipment were a result of a substantial loss in the number of operable
payphones and also due to the general decline in payphone equipment, as
described in item 1. Many payphone site owners signed contracts with other
payphone operators as a result of ATI's bankruptcy filing.

The Partnership repossessed equipment, primarily office furniture, from another
lessee during the third quarter of 2001. An impairment loss of $175,000 was
taken in 2001 to write this equipment down to its estimated value of $23,949 at
December 31, 2001. This equipment was sold in February, 2002 for $25,000.

The allowance for possible loan and lease losses is based upon a continuing
review of past lease loss experience, current economic conditions, and the
underlying lease asset value of the portfolio. At the end of each quarter a
review of the allowance account is conducted. The Partnership has an allowance
of $2,059,034 or 25% of the lease and note portfolio as of December 31, 2001.
The Partnership's provision for possible loan and lease losses was $1,327,901 in
2001 and $564,655 in 2000, and is the result of various lease and note contract
delinquencies and bankruptcy filings by several customers. Management will
continue to monitor the portfolio of leases and notes adjust the allowance for
possible loan and lease losses accordingly.

At December 31, 2001, eight customers were past due over 90 days or had filed
bankruptcy through March 1, 2002. When a payment is past due more than 90 days,
the Partnership discontinues recognizing income on the contract. The
Partnership's net investment in the past due contracts was $3,209,236.
Management's increase in the provision for possible loan and lease losses is
primarily the result of the necessity to increase the allowance related to these
eight customers. The schedule below itemizes these contracts. Management will
continue to monitor the past due contracts and take the necessary steps to
protect the Partnership's investment.

<TABLE>
<CAPTION>
                        Net Investment       % of Portfolio      In Bankruptcy
                        --------------       --------------      -------------
<S>                     <C>                  <C>                 <C>
      Customer A         $    182,483              2.2%                No
      Customer B              106,233              1.3%               Yes
      Customer C              796,519              9.7%               Yes
      Customer D              762,952              9.3%               Yes
      Customer E              184,390              2.2%               Yes
      Customer F              174,677              2.1%               Yes
      Customer G              448,995              5.4%               Yes
      Customer H              552,987              6.7%               Yes
                         ------------            -----
                         $  3,209,236             38.9%
                         ============            =====
</TABLE>

The telecommunications industry has seen a significant downturn in the last year
that has adversely affected the Partnership. The allowance for possible losses
has been increased to reflect the downturn in the industry and has also been
adjusted to reflect the increase in customers past due over 90 days or that have
filed for bankruptcy. The above net investment


                                       7
<PAGE>
on delinquencies of $3,209,236 represents approximately 39% of the Partnership's
total portfolio of leases and notes. Management believes its allowance for
possible loan and lease losses of $2,059,034 is adequate for these customers and
the remainder of the portfolio at December 31, 2001, based on the underlying
collateral values of the lease and note contracts for past due contracts and
historical loss ratios. However, no assurance can be given that future losses or
increases in the allowance for possible loan and lease losses will not be
necessary.

Other general and administrative expenses consists of legal and accounting, data
processing, amortization, office supplies, and other miscellaneous expenses.
These expenses totalled $107,662 in 1999, $214,798 in 2000, and $169,480 in
2001.

The General Partner is engaged directly for its own account in the business of
acquiring and leasing equipment. The General Partner also serves as the general
partner of Telecommunications Income Fund IX, L.P. ("TIF IX") and
Telecommunications Income Fund X, L.P. ("TIF X"), publicly owned limited
partnerships that are engaged in the equipment leasing business. Also, an
affiliate of the General Partner is the general partner of a privately offered
active limited partnership. As of December 31, 2001, the net proceeds of the
private program, TIF IX, and TIF X have been invested in specific equipment. TIF
IX is in its liquidation phase and must be dissolved by December 31, 2005. TIF X
entered its liquidation phase on December 31, 1999 and must be dissolved by
December 31, 2002. The activities of the General Partner, in regards to its
other leasing activities, has had no impact on the Partnership to date in
management's opinion.

The equipment that the Partnership leases is maintained by the lessee, and the
lessee is responsible for keeping the equipment upgraded with any improvements
that may be developed. The Partnership generally establishes the equipment's
residual value at 10% of the equipment's original cost. The Partnership
generally expects to realize the residual value by the sale of the equipment at
the expiration of the original lease term. The General Partner monitors the
maintenance and upgrades to the equipment and expects the Partnership to realize
residual values of at least 10%.

The General Partner is not aware of any regulatory issues that may have a
substantial negative impact on the telecommunications businesses to whom the
Partnership leases equipment. There are and will continue to be regulatory
issues in the telecommunications industry that the General Partner will monitor.

The equipment leases or notes acquired by the Partnership have been financed to
yield rates of return between 10% and 17%. The lease terms vary from 36 months
to 60 months. The rate charged on a particular lease or note depends on the size
of the transaction and the financial strength of the lessee. Generally, before
any lease or note is approved, there is a review of the potential lessees'
financial statements, credit references are checked, and outside business and/or
individual credit reports are obtained.

Inflation affects the cost of equipment purchased and the residual values
realized when leases terminate and equipment is sold. The impact of inflation is
mitigated as any increases in lease related expenses are passed on to the
lessees through corresponding increases in rental rates as new leases are
entered into.




                                       8
<PAGE>
IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS

In June, 1998, the Financial Accounting Standard Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities". SFAS No. 133 establishes standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, (collectively referred to as derivatives) and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value. The recognition of gains or losses resulting from
changes in the values of derivatives is based on the use of each derivative
instrument and whether it qualifies for hedge accounting. The Partnership
adopted SFAS No. 133 in the first quarter of calendar year 2001. The adoption of
this standard did not have any material impact on the Partnership's results of
operations, financial position or cash flows.

LIQUIDITY AND CAPITAL RESOURCES

<TABLE>
<CAPTION>
                                                       Year Ended        Year Ended        Year Ended
                                                      Dec. 31, 2001     Dec. 31, 2000     Dec. 31, 1999
                                                      -------------     -------------     -------------
<S>                                                   <C>               <C>               <C>
  Major Cash Sources (Uses):
  Net cash from operating activities                  $    320,471      $    518,790      $  1,092,606
  Contribution and sale of partnership units                   -0-               -0-         6,799,000
  Proceeds from line of credit borrowings                2,604,209         6,734,105         3,263,945
  Repayments/terminations of leases & notes              3,538,682         6,089,216         1,572,948
  Acquisitions of equip for direct finance leases         (793,134)       (4,155,148)       (7,066,480)
  Issuance of Notes Receivable                            (532,249)       (1,752,939)       (3,293,410)
  Repayments of line of credit borrowings               (4,079,759)       (6,332,824)       (1,290,803)
  Distributions & withdrawals paid to partners          (1,307,217)       (1,205,711)         (834,056)
  Payment of Syndication Costs                                 -0-               -0-          (849,875)
</TABLE>

The Partnership is required to establish working capital reserves of no less
than 1% of the total capital raised to satisfy general liquidity requirements,
operating costs of equipment, and the maintenance and refurbishment of
equipment. At December 31, 2001, that working capital reserve, as defined, would
be $125,930, and the Partnership had this amount available to it under its line
of credit agreement.

The Partnership obtained a line of credit agreement with a bank in January 1999
that allowed the Partnership to borrow the lesser of $2.0 million, or 32% of the
Partnership's qualified accounts as defined in the agreement, primarily leases
and notes receivable. On October 26, 1999, the agreement was amended to increase
the limit from $2.0 million to $4.4 million (limited by 32% of qualified
accounts, or $1,114,000 at December 31, 2001) and extend the maturity date from
June 30, 2000, to June 30, 2002. The line of credit agreement bears interest at
1% above the prime rate, with a $4,000 minimum monthly interest charge beginning
in July 1999, and is collateralized by substantially all assets of the
Partnership. The line of credit is guaranteed by the General Partner and certain
affiliates of the General Partner. The agreement is cancelable by the lender
after giving a 90-day notice. The General Partner believes amounts available
under the line of credit are adequate for the foreseeable future. The balance
outstanding on the line of credit at December 31, 2001 was $898,873.

Cash flow from operating activities was $320,471 for 2001 and is derived from
the leasing operations of the Partnership, resulting from the income from direct
financing leases and notes received less operating expenses. During 2001, the
Partnership acquired equipment for direct financing leases of $793,134 and
issued notes receivable of $532,249, funded from borrowings from the line of
credit, and the proceeds from the repayment and termination of leases and notes.
The proceeds relating to repayments of these leases and notes, including early
terminations totalled $3,538,682 in 2001.



                                       9
<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE SENSITIVITY

The table below provides information about the Partnership's notes receivable
and line of credit agreement that are sensitive to changes in interest rates.
The table presents the principal amounts due and related weighted average
interest rates by expected maturity dates as of December 31, 2001.

<TABLE>
<CAPTION>
                                        Assets                              Liabilities
                           ----------------------------------      ---------------------------
       Expected               Fixed Rate           Average          Variable Rate     Interest
     Maturity Date         Notes Receivable     Interest Rate      Line of Credit       Rate
     -------------         ----------------     -------------      --------------       ----
<S>                        <C>                  <C>                <C>                <C>
       2002                  $    824,503          15.24%           $    898,873        5.75%
       2003                       592,468          15.08%                    -0-          --
       2004                       541,615          14.89%                    -0-          --
       2005                       441,913          14.70%                    -0-          --
       2006                       564,208          13.61%                    -0-          --
                             ------------                           ------------
       Total                 $  2,964,707                           $    898,873
                             ============                           ============

       Fair Value            $  2,612,000                           $    898,873
                             ============                           ============
</TABLE>

The Partnership manages interest rate risk, its primary market risk exposure, by
limiting the terms of notes receivable to no more than five years and generally
requiring full repayment ratably over the term of the note.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following financial statements and related information as of and for the
years ended December 31, 2001, 2000, and 1999 are included in Item 8:

        Independent Auditors' Report
        Balance Sheets
        Statements of Operations
        Statements of Changes in Partners' Equity
        Statements of Cash Flows
        Notes to Financial Statements




                                       10
<PAGE>
INDEPENDENT AUDITORS' REPORT


To the Partners
Telecommunications Income Fund XI, L.P.

We have audited the accompanying balance sheets of Telecommunications Income
Fund XI, L.P. (the "Partnership") as of December 31, 2001 and 2000, and the
related statements of operations, changes in partners' equity and cash flows for
each of the three years in the period ended December 31, 2001. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Telecommunications Income Fund XI, L.P. at
December 31, 2001 and 2000, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 2001, in conformity
with accounting principles generally accepted in the United States of America.



/s/ DELOITTE & TOUCHE LLP


Cedar Rapids, Iowa
March 1, 2002



                                       11
<PAGE>
TELECOMMUNICATIONS INCOME FUND XI, L.P.

BALANCE SHEETS
DECEMBER 31, 2001 AND 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
ASSETS (Note 6)                                                                 2001              2000

<S>                                                                         <C>               <C>
  Cash and cash equivalents                                                 $        520      $        503
  Net investment in direct financing leases
    and notes receivable (Note 2)                                              8,247,891        10,480,086
  Allowance for possible loan and lease losses (Note 3)                       (2,059,034)         (739,699)
                                                                            ------------      ------------
  Direct financing leases and notes receivable, net                            6,188,857         9,740,387
  Other receivables                                                              185,796            67,742
  Equipment under operating lease (Note 4)                                        23,949         2,182,456
                                                                            ------------      ------------

TOTAL                                                                       $  6,399,122      $ 11,991,088
                                                                            ============      ============

LIABILITIES AND PARTNERS' EQUITY

LIABILITIES:

  Line-of-credit agreement (Note 6)                                         $    898,873      $  2,374,423
  Outstanding checks in excess of bank balance                                    12,586            46,201
  Due to affiliates                                                                2,981             6,537
  Distributions payable to partners                                               99,296           100,744
  Accounts payable and accrued expenses                                           63,880           127,860
  Lease security deposits                                                        226,211           301,236
                                                                            ------------      ------------
         Total liabilities                                                     1,303,827         2,957,001
                                                                            ------------      ------------

CONTINGENCY (Note 11)

PARTNERS' EQUITY, 25,000 units authorized (Note 5):
  General partner, 10 units issued and outstanding                                 4,693             7,747
  Limited partners, 12,402 units issued and outstanding at
    December 31, 2001 and 12,583 units outstanding at December 31, 2000        5,090,602         9,026,340
                                                                            ------------      ------------
         Total partners' equity                                                5,095,295         9,034,087
                                                                            ------------      ------------

TOTAL                                                                       $  6,399,122      $ 11,991,088
                                                                            ============      ============
</TABLE>

See notes to financial statements.



                                       12
<PAGE>
TELECOMMUNICATIONS INCOME FUND XI, L.P.

STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                       2001              2000              1999
<S>                                                <C>               <C>               <C>

REVENUES:
  Income from direct financing leases
    and notes receivable                           $  1,013,484      $  1,229,141      $  1,110,646
  Gain (loss) on lease terminations                    (150,796)           70,238               (99)
  Interest and other income                              49,737            79,440            62,002
                                                   ------------      ------------      ------------
         Total revenues                                 912,425         1,378,819         1,172,549
                                                   ------------      ------------      ------------

EXPENSES:
  Management and administrative fees (Note 7)           230,249           268,738           137,677
  Other general and administrative expenses             169,480           214,798           107,662
  Interest expense                                      123,879           145,390            96,135
  Depreciation expense (Note 4)                         394,481                --                --
  Impairment loss (Note 4)                            1,299,457           584,966                --
  Provision for possible loan and lease
    losses (Note 3)                                   1,327,901           564,655           154,410
                                                   ------------      ------------      ------------
         Total expenses                               3,545,447         1,778,547           495,884
                                                   ------------      ------------      ------------

NET INCOME (LOSS)                                  $ (2,633,022)     $   (399,728)     $    676,665
                                                   ============      ============      ============

NET INCOME (LOSS) ALLOCATED TO:
  General partner                                  $     (2,094)     $       (317)     $        730
  Limited partners                                   (2,630,928)         (399,411)          675,935
                                                   ------------      ------------      ------------
                                                   $ (2,633,022)     $   (399,728)     $    676,665
                                                   ============      ============      ============

NET INCOME (LOSS) PER PARTNERSHIP UNIT             $    (210.04)     $     (31.74)     $      72.99
                                                   ============      ============      ============

WEIGHTED AVERAGE PARTNERSHIP UNITS OUTSTANDING           12,536            12,593             9,271
                                                   ============      ============      ============
</TABLE>


See notes to financial statements.



                                       13
<PAGE>
TELECOMMUNICATIONS INCOME FUND XI, L.P.

STATEMENTS OF CHANGES IN PARTNERS' EQUITY
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                            GENERAL            LIMITED PARTNERS              TOTAL
                                                            PARTNER        -------------------------        PARTNERS'
                                                           (10 UNITS)       UNITS          AMOUNT            EQUITY
                                                           ----------      -------      ------------      ------------
<S>                                                        <C>              <C>         <C>               <C>

BALANCE AT DECEMBER 31, 1998                               $    9,254        5,784      $  4,894,244      $  4,903,498

  Proceeds from sale of limited partnership interests              --        6,799         6,799,000         6,799,000

  Syndication costs incurred (Note 7)                              --           --          (849,875)         (849,875)

  Distributions to partners ($95.63 per unit) (Note 5)           (960)          --          (885,585)         (886,545)

  Net income                                                      730           --           675,935           676,665
                                                           ----------      -------      ------------      ------------

BALANCE AT DECEMBER 31, 1999                                    9,024       12,583        10,633,719        10,642,743

  Distributions to partners ($96.00 per unit) (Note 5)           (960)          --        (1,207,968)       (1,208,928)

  Net loss                                                       (317)          --          (399,411)         (399,728)
                                                           ----------      -------      ------------      ------------

BALANCE AT DECEMBER 31, 2000                                    7,747       12,583         9,026,340         9,034,087

  Distributions to partners ($95.91 per unit) (Note 5)           (960)          --        (1,201,360)       (1,202,320)

  Withdrawal of limited partners                                   --         (181)         (103,450)         (103,450)

  Net loss                                                     (2,094)          --        (2,630,928)       (2,633,022)
                                                           ----------      -------      ------------      ------------

BALANCE AT DECEMBER 31, 2001                               $    4,693       12,402      $  5,090,602      $  5,095,295
                                                           ==========      =======      ============      ============
</TABLE>


See notes to financial statements.



                                       14
<PAGE>
TELECOMMUNICATIONS INCOME FUND XI, L.P.

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                 2001              2000              1999
<S>                                                          <C>               <C>               <C>

OPERATING ACTIVITIES:
  Net income (loss)                                          $ (2,633,022)     $   (399,728)     $    676,665
  Adjustments to reconcile net income (loss) to
    net cash from operating activities:
    (Gain) loss on lease terminations                             150,796           (70,238)               99
    Amortization of intangibles                                        63               545             1,229
    Provision for possible loan and lease losses                1,327,901           564,655           154,410
    Impairment loss                                             1,299,457           584,966                --
    Depreciation                                                  394,481                --                --
    Changes in operating assets and liabilities:
      Other receivables                                          (118,054)          (56,663)          (11,079)
      Outstanding checks in excess of bank balance                (33,615)         (150,658)          196,859
      Due to affiliates                                            (3,556)          (35,376)           37,541
      Accounts payable and accrued expenses                       (63,980)           81,287            36,882
                                                             ------------      ------------      ------------
         Net cash from operating activities                       320,471           518,790         1,092,606
                                                             ------------      ------------      ------------

INVESTING ACTIVITIES:
  Acquisitions of, and purchases of equipment for,
    direct financing leases                                      (793,134)       (4,155,148)       (7,066,480)
  Repayments of direct financing leases                         1,719,419         1,819,409         1,280,730
  Proceeds from termination of direct financing leases          1,634,435         3,948,093            11,731
  Proceeds from sale of equipment under operating lease           324,040                --                --
  Repayments of notes receivable                                  184,828           321,714           280,487
  Issuance of notes receivable                                   (532,249)       (1,752,939)       (3,293,410)
  Net lease security deposits collected (paid)                    (75,025)          103,088           107,338
                                                             ------------      ------------      ------------
         Net cash from investing activities                     2,462,314           284,217        (8,679,604)
                                                             ------------      ------------      ------------

FINANCING ACTIVITIES:
  Contribution and sale of partnership units                           --                --         6,799,000
  Proceeds from borrowings                                      2,604,209         6,734,105         3,263,945
  Repayment of borrowings                                      (4,079,759)       (6,332,824)       (1,290,803)
  Proceeds from related party borrowing                                --                --           600,000
  Repayment of related party borrowing                                 --                --          (600,000)
  Distributions and withdrawals paid to partners               (1,307,218)       (1,205,711)         (834,056)
  Payment of syndication costs                                         --                --          (849,875)
                                                             ------------      ------------      ------------
         Net cash from financing activities                    (2,782,768)         (804,430)        7,088,211
                                                             ------------      ------------      ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                   17            (1,423)         (498,787)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                        503             1,926           500,713
                                                             ------------      ------------      ------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                     $        520      $        503      $      1,926
                                                             ============      ============      ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Interest paid                                              $    141,979      $    139,425      $     79,320
  Noncash investing activities - Conversion of leases
    to equipment under operating lease                            198,947         2,767,422                --
  Noncash investing activities - Conversion of equipment
    under operating leases to note receivable                     224,000                --                --
</TABLE>

See notes to financial statements.



                                       15
<PAGE>
TELECOMMUNICATIONS INCOME FUND XI, L.P.

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
--------------------------------------------------------------------------------


1.    SIGNIFICANT ACCOUNTING POLICIES

      ORGANIZATION AND NATURE OF OPERATIONS- Telecommunications Income Fund XI,
      L.P. (the "Partnership") was formed on August 26, 1997 under the Iowa
      Limited Partnership Act. The general partner of the Partnership is Berthel
      Fisher & Company Leasing, Inc. (the "General Partner"), an Iowa
      corporation. During its offering period, the Partnership sold 12,583
      limited partnership units at a price per unit of $1,000.

      The Partnership operates in one segment. The Partnership's operations are
      conducted throughout the United States. The Partnership primarily acquires
      equipment for lease to third parties under a direct finance arrangement.
      The Partnership will also provide financing to customers under a note
      agreement. Certain agreements exceed 10% of the Partnership's direct
      finance lease and notes receivable portfolio. On December 23, 2004 (or
      earlier if the General Partner determines it to be in the Partnership's
      best interest), the Partnership will cease reinvestment in equipment and
      leases and will begin the orderly liquidation of Partnership assets. The
      Partnership must dissolve on December 31, 2012, or earlier, upon the
      occurrence of certain events (see Note 5).

      USE OF ESTIMATES - The preparation of financial statements in conformity
      with accounting principles generally accepted in the United States of
      America requires management to make estimates and assumptions that affect
      the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements
      and the reported amounts of revenues and expenses during the reporting
      period. Actual results could differ significantly from those estimated.
      Material estimates that are particularly susceptible to significant change
      in the near-term relate to the determination of the allowance for possible
      loan and lease losses and the estimated unguaranteed residual values of
      the Partnership's leased equipment.

      Most of the Partnership's leases and notes receivable are with customers
      that are in the entrepreneurial stage, are highly leveraged and require
      financing in place of or to supplement financing from banks. Although the
      Partnership attempts to mitigate its credit risk through the use of a
      variety of commercial credit reporting agencies when processing the
      applications of its customers, failure of the Partnership's customers to
      make scheduled payments under their equipment leases and notes receivable
      could have a material near-term impact on the allowance for possible loan
      and lease losses.

      Realization of residual values depends on many factors, several of which
      are not within the Partnership's control, including general market
      conditions at the time of the lease contract's expiration, whether there
      has been unusual wear and tear on, or use of, the equipment, the cost of
      comparable new equipment, the extent, if any, to which the equipment has
      become technologically or economically obsolete during the contract term
      and the effects of any additional or amended government regulations. Also,
      the used equipment market, particularly the telecommunications market, can
      be volatile. These factors, among others, could have a material near-term
      impact on the estimated unguaranteed residual values.


                                       16
<PAGE>
      CERTAIN RISK CONCENTRATIONS - The Partnership's portfolio of leases and
      notes receivable are concentrated in pay telephones, industrial equipment
      and office and computer equipment representing approximately 49%, 18%, and
      23% of the portfolio at December 31, 2001 and 55%, 9% and 15% of the
      portfolio at December 31, 2000, respectively.

      Three customers account for approximately 34% of the Partnership's net
      investment in direct financing leases and notes receivable portfolio at
      December 31, 2001.

      RELATED PARTY TRANSACTIONS - In fulfilling its role as general partner,
      Berthel Fisher & Company Leasing, Inc. enters into transactions with the
      Partnership in the normal course of business. Further, the Partnership
      enters into transactions with affiliates of Berthel Fisher & Company
      Leasing, Inc. These transactions are set forth in the notes that follow.
      Management is of the opinion that these transactions are in accordance
      with the terms of the Agreement of Limited Partnership.

      CASH AND CASH EQUIVALENTS - The Partnership considers all highly liquid
      investments with a maturity of three months or less when purchased to be
      cash equivalents.

      NET INVESTMENT IN DIRECT FINANCING LEASES - The Partnership's primary
      activity consists of leasing equipment under direct financing leases
      generally over a period of three to five years. At the time of closing a
      direct financing lease, the Partnership records the gross lease contract
      receivable, the estimated unguaranteed residual value and unearned lease
      income. The unearned lease income represents the excess of the gross lease
      receivable plus the estimated unguaranteed residual value over the cost of
      the equipment leased. In addition, the Partnership capitalizes all initial
      direct costs associated with originating the direct financing lease. The
      unearned income and initial direct costs are amortized to income over the
      lease term so as to produce a constant periodic rate-of-return on the net
      investment in the lease. Lessees are responsible for all taxes, insurance,
      and maintenance costs.

      The realization of the estimated unguaranteed residual value of leased
      equipment depends on the value of the leased equipment at the end of the
      lease term and is not a part of the contractual agreement with the lessee.
      Estimated residual values are based on estimates of amounts historically
      realized by the Partnership for similar equipment and are periodically
      reviewed by management for possible impairment.

      NOTES RECEIVABLE - Notes receivable are carried at the principal balance
      outstanding. Interest income on notes receivable is accrued based on the
      principal amount outstanding.

      ALLOWANCE FOR POSSIBLE LOAN AND LEASE LOSSES - The Partnership performs
      credit evaluations prior to approval of a loan and lease. Subsequently,
      the creditworthiness of the customer and the value of the underlying
      assets are monitored on an ongoing basis. Under its lease agreements, the
      Partnership retains legal ownership of the leased asset. The Partnership
      maintains an allowance for possible loan and lease losses which could
      arise should customers become unable to discharge their obligations under
      the loan and lease agreements. The allowance for possible loan and lease
      losses is maintained at a level deemed appropriate by management to
      provide for known and inherent risks in the loan and lease portfolio. The
      allowance is based upon a continuing review of past loss experience,
      current economic conditions, delinquent loans and leases, an estimate of
      potential loss exposure on significant customers in adverse situations,
      and the underlying asset value. The consideration of such future potential
      losses also includes an evaluation for other than temporary declines in
      value of the underlying assets. Loans and leases, which are deemed
      uncollectible, are charged off and deducted from the allowance. The
      provision for possible loan and lease losses and recoveries are added to
      the allowance.



                                       17
<PAGE>
      TAX STATUS - Under present income tax laws, the Partnership is not liable
      for income taxes, as each partner recognizes a proportionate share of the
      Partnership income or loss in their income tax return. Accordingly, no
      provision for income taxes is made in the financial statements of the
      Partnership.

      NET INCOME (LOSS) PER PARTNERSHIP UNIT - Net income (loss) per partnership
      unit is based on the weighted average number of units outstanding
      (including both general and limited partners' units).

      IMPACT OF NEW ACCOUNTING PRONOUNCEMENTS - In June, 1998, the Financial
      Accounting Standard Board ("FASB") issued Statement of Financial
      Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
      Instruments and Hedging Activities". SFAS No. 133 establishes standards
      for derivative instruments, including certain derivative instruments
      embedded in other contracts, (collectively referred to as derivatives) and
      for hedging activities. It requires that an entity recognize all
      derivatives as either assets or liabilities in the statement of financial
      position and measure those instruments at fair value. The recognition of
      gains or losses resulting from changes in the values of derivatives is
      based on the use of each derivative instrument and whether it qualifies
      for hedge accounting. The Partnership adopted SFAS No. 133 in the first
      quarter of calendar year 2001. The adoption of this standard did not have
      any impact on the Partnership's results of operations, financial position
      or cash flows.

2.    NET INVESTMENT IN DIRECT FINANCING LEASES AND NOTES RECEIVABLE

      The Partnership's net investment in direct financing leases and notes
      receivable consists of the following at December 31, 2001 and 2000:

<TABLE>
<CAPTION>
                                                                 2001              2000

<S>                                                          <C>               <C>
      Minimum lease payments receivable                      $  5,768,242      $  9,933,179
      Estimated unguaranteed residual values                      455,000           800,757
      Unamortized initial direct costs                                  9               166
      Unearned income                                            (940,067)       (1,908,744)
      Notes receivable, collateralized primarily by pay
        telephone equipment and related site agreements,
        11.7% to 17.3%, maturing through 2006                   2,964,707         1,654,728
                                                             ------------      ------------
      Net investment in direct financing leases and
        notes receivable                                     $  8,247,891      $ 10,480,086
                                                             ============      ============
</TABLE>




                                       18
<PAGE>
      At December 31, 2001, contractual principal maturities of notes
      receivable, future minimum payments to be received under direct financing
      leases and the estimated unguaranteed residuals to be realized at the
      expiration of direct financing leases are as follows:

<TABLE>
<CAPTION>
                                                    MINIMUM        ESTIMATED
                                   CONTRACTUAL       LEASE        UNGUARANTEED
                                    PRINCIPAL       PAYMENTS        RESIDUAL
                                    MATURITIES     RECEIVABLE        VALUES
<S>                                <C>             <C>            <C>
      Years ending December 31:
              2002                  $  824,503     $3,245,753       $ 90,220
              2003                     592,468      1,645,485         74,445
              2004                     541,615        759,186        260,474
              2005                     441,913         95,991         28,361
              2006                     564,208         21,827          1,500
                                    ----------     ----------       --------
              Total                 $2,964,707     $5,768,242       $455,000
                                    ==========     ==========       ========
</TABLE>

      The Partnership leases equipment to certain companies for which the
      General Partner or its affiliates have an ownership interest in, provide
      financing to, or provide investment advisory services for such companies.
      The Partnership's net investment in direct financing leases with these
      companies approximated $184,390 and $225,000 at December 31, 2001 and
      2000, respectively.

      Five customers accounted for 10% or more of the amount of income from
      direct financing leases and notes receivable during one or more of the
      periods presented, as follows:

<TABLE>
<CAPTION>
                                               2001     2000     1999
<S>                                            <C>      <C>      <C>
      Customer A                                --%       4%      17%
      Customer B                                --        6       12
      Customer C                                 4       14        9
      Customer D                                --        2       28
      Customer E                                 6       10       --
</TABLE>


3.    ALLOWANCE FOR POSSIBLE LOAN AND LEASE LOSSES

      The changes in the allowance for possible loan and lease losses for the
      years ended December 31, 2001 and 2000 is as follows:

<TABLE>
<CAPTION>
                                          2001           2000           1999
<S>                                    <C>            <C>            <C>

      Balance at beginning of year     $  739,699     $  239,857     $   87,818
        Provision                       1,327,901        564,655        154,410
        Charge-offs                        (8,566)       (64,813)        (2,371)
                                       ----------     ----------     ----------
      Balance at end of year           $2,059,034     $  739,699     $  239,857
                                       ==========     ==========     ==========
</TABLE>

      The allowance for possible loan and lease losses consisted of specific
      allowances for leases and notes receivable of $1,706,000, $586,760 and $0
      and a general unallocated allowance of $353,034, $152,939 and $239,857,
      respectively, at December 31, 2001, 2000 and 1999.



                                       19
<PAGE>
      At December 31, 2001, the Partnership had eight customers with payments
      over 90 days past due or that have filed bankruptcy subsequent to year end
      through March 1, 2002. The Partnership's net investment in lease contracts
      or notes receivable with these customers totaled $3,209,236. Management
      has provided a specific allowance of $1,706,000 at December 31, 2001
      related to these customers. Management believes that the underlying
      collateral is adequate to recover the Partnership's net investment for the
      remaining balances. At December 31, 2000, the Partnership had five
      customers with payments over 90 days past due or that had filed for
      bankruptcy. The Partnership's net investment in lease contracts or notes
      receivable with these customers totaled $1,178,818. Management provided a
      specific allowance of $523,000 at December 31, 2000 related to these
      customers. If a lease or note receivable is past due more than 90 days,
      the Partnership discontinues recognizing income on the contract.

4.    EQUIPMENT UNDER OPERATING LEASE

      In November 2000, the Partnership exercised its right to manage the assets
      leased to Alpha Telecommunications, Inc. due to nonpayment of lease
      receivables. The remaining net equipment cost, representing primarily pay
      phones, was expected by management to be recovered through the operation
      and/or sale of the equipment at December 31, 2000. Such equipment cost was
      adjusted for an impairment loss of $584,966, to reflect management's
      estimated fair market value of the equipment. In March 2001, a portion of
      the equipment was sold for $286,114 and the Partnership recorded a loss of
      $115,476. The equipment was depreciated in the amount of $394,481 during
      2001 and additional impairments were recorded during the second and third
      quarters totaling $1,124,457 to the expected sales price. The remainder of
      the equipment was sold for $224,000 at no gain or loss to the Partnership.

      The significant impairment of equipment in 2001 resulted because the
      payphone site lease contracts were not accepted by the trustee during the
      bankruptcy of Alpha Telecommunications, Inc. Without the contracts in
      place, the value of the payphones decreased significantly. Additionally,
      the market value of payphones decreased due to the general decline
      experienced in the industry.

      In September 2001, the Partnership exercised its right to repossess the
      assets leased to a lessee due to nonpayment of lease receivables. Such
      equipment cost was adjusted for an impairment loss of $175,000, to reflect
      management's estimated fair market value of the equipment of $23,949 at
      December 31, 2001. This equipment was sold in February 2002 for $25,000.

5.    LIMITED PARTNERSHIP AGREEMENT

      The Partnership was formed pursuant to an Agreement of Limited Partnership
      dated as of August 26, 1997 (the "Agreement"). The Agreement outlines
      capital contributions to be made by the partners and the allocation of
      cash distributions, net income, and net loss to the partners. Capital
      contributions by the partners to the partnership will consist of the
      $10,000 contributed by the General Partner and the amounts contributed by
      limited partners for the purchase of their units ($1,000 per unit).

      Net income or net loss allocated to the limited partners (and to the
      General Partner) is apportioned among them based on the number of units
      held and on the number of days within the fiscal year that they were
      limited partners. Any Partnership net loss will first be allocated to the
      partners to the extent of their positive capital accounts. Any additional
      Partnership net loss will be allocated to the General Partner. Any
      Partnership net income will first be allocated to partners with negative
      capital accounts in proportion to, and to the extent of, such negative
      capital accounts. Except as provided below, any Partnership net income
      will then be allocated to the partners. During the liquidating phase of
      the Partnership, net income earned that results in Partnership assets to
      be distributed 80% to the limited partners and 20% to the General Partner
      will be allocated 80% to the limited partners and 20% to the General
      Partner.



                                       20
<PAGE>
      A partner's share of profits, losses and operating distributions to
      partners (distributions of up to 9.6% annually made during the operating
      phase) is based upon the amount of each partner's adjusted capital
      contribution (a partner's capital contribution, reduced by all payments to
      the partner that qualify as a liquidating distribution or return of
      capital) and each limited partner's admission date (the date a limited
      partner is admitted to the Partnership).

      During the Partnership's operating phase, to the extent there is cash
      available for distribution, cash distributions will be made on a monthly
      basis in the following order of priority: first, to reimburse the General
      Partner for administrative services it provides to the Partnership, as
      further described in the Agreement (see Note 7); second, to the limited
      partners up to amounts representing a 9.6% cumulative annual return on
      their adjusted capital contribution (as defined); and, third, to the
      General Partner, representing a monthly equipment management fee of 2% of
      the gross rental payments received by the Partnership (see Note 7). To the
      extent that cash is not available to pay all or a portion of the equipment
      management fee pursuant to the above priority distributions, such fee will
      accrue and accumulate. Any remaining cash distributions after payment of
      the above (including arrearages) will be paid, at the discretion of the
      General Partner, to the limited partners.

      The Partnership will cease reinvesting in assets and will not enter into
      additional leases during the liquidating phase. The liquidating phase
      shall begin at any time after June 23, 2003 (or earlier if the General
      Partner determines it to be in the Partnership's best interest), but no
      later than December 23, 2004. During the liquidating phase, the
      Partnership will proceed with all due and deliberate speed and care to
      wind up the Partnership's affairs and to convert all of the Partnership's
      assets into cash. Operating distributions will not be paid during the
      liquidating phase.

      During the liquidating phase, amounts available to be distributed among
      the partners after satisfaction of all Partnership liabilities and
      obligations and/or the provision of reserves for future or contingent
      Partnership liabilities will be distributed in order of priority as
      follows:

      -  First, payment of the General Partner's expense reimbursement;

      -  Second, payment to the partners, to the extent necessary to pay to the
         partners during the term of their investment in the Partnership,
         operating distributions of 8% annually (on a cumulative, compounded
         daily basis) on their adjusted capital contributions;

      -  Third, payment to the partners of 100% of their adjusted capital
         contributions to the Partnership;

      -  Fourth, payment to the partners to the extent they have not received,
         during the term of their investment in the Partnership, distributions
         totaling 9.6% annually (calculated only through the end of the
         operating phase), noncompounded, on their adjusted capital
         contributions;

      -  Fifth, payment to the General Partner of any unpaid arrearages in its
         management fee; and

      -  Sixth, payment of any remaining amounts will be made 80% to the limited
         partners and 20% to the General Partner; provided, however, the General
         Partner will not receive its share of these remaining amounts until
         such time as the limited partners have received operating distributions
         and liquidating distributions equal to their capital contributions plus
         9.6% annually (calculated only through the end of the operating phase)
         noncompounded, on their adjusted capital contributions.


                                       21
<PAGE>
6.    BORROWING AGREEMENTS

      In January 1999, the Partnership obtained financing under a line of credit
      agreement with a bank. The amount available to borrow under the line of
      credit was limited to $2,000,000 or 32% of qualified accounts, primarily
      leases, and notes receivable. On October 26, 1999, the agreement was
      amended to increase the available amount from $2,000,000 to $4,400,000
      (limited by 32% of qualified accounts) and extend the maturity from June
      30, 2000 to June 30, 2002. At December 31, 2001 the borrowing limit was
      $1,114,000. The line of credit agreement bears interest at 1% over the
      prime rate (combined rate of 5.75% and 10.5% at December 31, 2001 and
      2000, respectively), with a $4,000 minimum monthly interest charge which
      began in July 1999, and is collateralized by substantially all assets of
      the Partnership. The line of credit is guaranteed by the General Partner
      and certain affiliates of the General Partner. This agreement is
      cancelable by the lender after giving a 90-day notice. The General Partner
      believes amounts available under the line of credit are adequate for the
      foreseeable future. The amount outstanding under this line-of-credit at
      December 31, 2001 was $898,873.

7.    MANAGEMENT AND SERVICE AGREEMENTS

      The Partnership paid the General Partner acquisition fees of 5% of the
      cost of equipment financing provided by the Partnership, which was
      $34,714, $265,066 and $490,123 for the years ended December 31, 2001, 2000
      and 1999, respectively.

      The Partnership also pays an equipment management fee equal to 2% of the
      amount of gross rental payments received, to the General Partner. During
      the years ended December 31, 2001, 2000 and 1999, those management fees
      aggregated $74,249, $124,738 and $53,677, respectively.

      In addition, the General Partner is reimbursed for certain other costs
      under an administrative services agreement. Amounts incurred by the
      Partnership pursuant to this agreement amounted to $156,000, $144,000 and
      $84,000 for the years ended December 31, 2001, 2000 and 1999,
      respectively.

      As a part of the issuance of partnership units, the Partnership paid
      commissions of 9% to Berthel Fisher & Company Financial Services, Inc., a
      broker-dealer affiliated with the General Partner, and reimbursed other
      offering expenses of up to 3.5% of the gross proceeds to the General
      Partner. These fees, which amounted to $849,875 for the year ended
      December 31, 1999, were recorded as syndication costs and charged directly
      to partners' equity.



                                       22
<PAGE>
8.    RECONCILIATION OF FINANCIAL AND INCOME TAX REPORTING BASIS

      A reconciliation of net income (loss) for financial reporting purposes
      with the related amount reported for income tax purposes for the years
      ended December 31, 2001, 2000 and 1999 is as follows:

<TABLE>
<CAPTION>
                                     2001                            2000                            1999
                          --------------------------      --------------------------      --------------------------
                                              PER                             PER                             PER
                             AMOUNT           UNIT           AMOUNT           UNIT           AMOUNT           UNIT
                          ------------     ---------      ------------     ---------      ------------     ---------
<S>                       <C>              <C>            <C>              <C>            <C>              <C>

Net income (loss) for
  financial reporting
  purposes                $ (2,633,022)    $ (210.04)     $   (399,728)    $  (31.74)     $    676,665     $   72.99
Adjustment to convert
  direct financing
  leases to operating
  leases for income
  tax purposes              (1,792,061)      (142.95)       (1,463,116)      (116.19)       (1,328,591)      (143.31)
Net change in
  allowance for
  possible loan and
  lease losses               1,319,335        105.24           499,842         39.69           152,039         16.40
Impairment loss on
  equipment                  1,299,457        103.66           584,966         46.45
Gain on lease
  terminations                  19,016          1.52         1,556,215        123.58                --            --
                          ------------     ---------      ------------     ---------      ------------     ---------
Net income (loss) for
  income tax
  reporting purposes      $ (1,787,275)    $ (142.57)     $    778,179     $   61.79      $   (499,887)    $  (53.92)
                          ============     =========      ============     =========      ============     =========
</TABLE>


9.    DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

      The fair value amounts disclosed below are based on estimates prepared by
      management based on valuation methods appropriate in the circumstances.
      Accounting principles generally accepted in the United States of America
      do not require disclosure for lease contracts. The carrying amount for
      financial instruments included among cash and cash equivalents, other
      receivables and short-term payables approximates their fair value because
      of the short maturity of those instruments. The carrying value of the
      Partnership's line of credit agreement approximates its fair value due to
      the variable rate on the debt. The estimated fair value of notes
      receivable is based principally on discounted future cash flows at rates
      commensurate with the credit and interest rate risk involved.



                                       23
<PAGE>
      The estimated fair values of the Partnership's other significant financial
      instruments are as follows at December 31, 2001 and 2000:

<TABLE>
<CAPTION>
                                     2001                        2000
                           ------------------------    ------------------------
                            CARRYING        FAIR        CARRYING        FAIR
                             AMOUNT         VALUE        AMOUNT         VALUE
                           ----------    ----------    ----------    ----------

<S>                        <C>           <C>           <C>           <C>
      Notes receivable     $2,964,707    $2,612,000    $1,654,728    $1,615,000
</TABLE>

10.   QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
                                                                2001 QUARTERS
                                -------------------------------------------------------------------------------
                                   FIRST            SECOND           THIRD           FOURTH             2001
                                -----------      -----------      -----------      -----------      -----------
<S>                             <C>              <C>              <C>              <C>              <C>

      Revenues                  $   217,029      $   176,010      $   263,968      $   255,418      $   912,425
      Expenses                      336,434        1,232,077          665,227        1,311,709        3,545,447
      Net loss                     (119,405)      (1,056,067)        (401,259)      (1,056,291)      (2,633,022)

      Net loss per
        partnership unit        $     (9.48)     $    (83.90)     $    (31.99)     $    (84.67)     $   (210.04)
</TABLE>

      Expenses for the first quarter of 2001 include depreciation of $181,887 on
      equipment held under operating leases (see Note 4 related to such
      equipment). Expenses for the second quarter include depreciation, loss on
      sale and impairment loss on equipment held under operating leases of
      $145,410, $115,476 and $703,785, respectively. Expenses for the third
      quarter include depreciation and impairment loss on equipment held under
      operating leases of $67,199 and $380,800, respectively. Expenses for the
      fourth quarter include an impairment loss on equipment held under
      operating leases of $39,872 and an increase in the provision for possible
      loan and lease losses of $952,000 due primarily to the significant
      increase in amounts that were past due or related to customers who had
      filed for bankruptcy (see Note 3).

<TABLE>
<CAPTION>
                                                              2000 QUARTERS
                                ----------------------------------------------------------------------------
                                   FIRST           SECOND          THIRD          FOURTH            2000
                                -----------     -----------     -----------     -----------      -----------
<S>                             <C>             <C>             <C>             <C>              <C>

      Revenues                  $   416,315     $   284,640     $   326,694     $   351,170      $ 1,378,819
      Expenses                      184,715         154,125         189,771       1,249,936        1,778,547
      Net income (loss)             231,600         130,515         136,923        (898,766)        (399,728)

      Net income (loss) per
        partnership unit        $     18.39     $     10.36     $     10.87     $    (71.36)     $    (31.74)
</TABLE>

      Expenses for the fourth quarter of 2000 include an increase in the
      allowance for possible lease and loan losses of approximately $433,000 for
      a customer that filed for bankruptcy and a $584,966 impairment loss on
      repossessed equipment (see Note 4).



                                       24
<PAGE>
11.   CONTINGENCY

      The General Partner's parent has approximately $2.2 million of unsecured
      subordinated debt due on December 31, 2002 and may not have sufficient
      liquid assets to repay such amounts. The General Partner's parent is
      pursuing additional financing, refinancing, and asset sales to meet its
      obligations. No assurance can be provided that the General Partner's
      parent will be successful in its efforts. The inability of the General
      Partner to continue as a going concern as a result of the parent's
      inability to restructure its debts would require the Partnership to elect
      a successor general partner.

                                    * * * * *





                                       25
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

None.


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

A. The General Partner of the registrant:

      Berthel Fisher & Company Leasing, Inc., an Iowa corporation.

B. Executive officers of the General Partner of the Registrant:

Thomas J. Berthel (age 50) - Mr. Berthel is the Chief Executive Officer,
President, and Director of the General Partner, a position he has held since the
General Partner's inception in 1988. Mr. Berthel is also President and a
Director of the General Partner's parent, Berthel Fisher & Company, Inc.
("Berthel Fisher"), which he founded in 1985, and Berthel Fisher's other
subsidiaries, Berthel Fisher & Company Financial Services, Inc.; Berthel Fisher
& Company Management Corp.; Berthel Fisher & Company Planning, Inc.; and one
other corporation which acts as general partner of a separate private program.
He also serves as the Chairman of the Board and Director of Amana Colonies Golf
Course, Inc. Mr. Berthel holds a bachelor's degree from St. Ambrose College in
Davenport, Iowa (1974). From 1974 to 1982, Mr. Berthel was President and
majority shareholder of Insurance Planning Services Corporation in Maquoketa,
Iowa, which was engaged in the operation of a securities and insurance business.
Mr. Berthel holds a Financial and Operation Principal license issued by the
National Association of Securities Dealers, Inc. Mr. Berthel is also a Certified
Life Underwriter. Mr. Berthel also serves as an individual general partner of
the limited partnership referred to above. Mr. Berthel received a MBA degree
from the University of Iowa in 1993.

Ronald O. Brendengen (age 47) - Mr. Brendengen is the Treasurer, Chief Operating
Officer, Chief Financial Officer, and a Director (1988 to present) of the
General Partner. He was elected to his current offices in October 1996. He
served as Treasurer and Chief Financial Officer since October 1996. He has also
served as Secretary (1994 - March, 1995), Treasurer (1988 - August 1995) and
Chief Financial Officer (1994 - August 1995) of the General Partner. He served
as Controller (1985-1993), Treasurer (1987-present), Chief Financial Officer,
Secretary and a Director (1987-present), and was also elected Chief Operating
Officer in January 1998, of Berthel Fisher & Company, the parent company of the
General Partner. Mr. Brendengen serves as the Treasurer, Chief Financial Officer
and a Director of Berthel Fisher & Company Planning, Inc., the trust advisor of
Berthel Growth & Income Trust I, a company required to file reports pursuant to
the Securities Exchange Act of 1934. He also serves in various offices and as a
Director of each subsidiary of Berthel Fisher & Company. Mr. Brendengen holds a
certified public accounting certificate and worked in public accounting during
1984 and 1985. From 1979 to 1984, Mr. Brendengen worked in various capacities
for Morris Plan and MorAmerica Financial Corp., Cedar Rapids, Iowa. Mr.
Brendengen attended the University of Iowa before receiving a bachelor's degree
in Accounting and Business Administration with a minor in Economics from Mt.
Mercy College, Cedar Rapids, Iowa, in 1978.

Timothy J. White (age 48) - Mr. White is President of the General Partner since
November 13, 2000. From 1999 to 2000, Mr. White was Vice President of New
Markets for Great America Leasing in Cedar Rapids, Iowa. From 1996 to 1999, Mr.
White was Vice President of Business Development for GE Capital in Cedar Rapids,
Iowa. From 1993 to 1996, Mr. White was President of Aloha Capital Corporation in
Syracuse, New York. From 1989 to 1993, Mr. White was Vice President of Sales for
Dana Commercial Credit in Troy, Michigan. During his career, Mr. White has been
responsible for the management of a leasing business in excess of $200 million
and sales budgets in excess of $400 million. Mr. White holds a Bachelor's degree
in Business Management from Walsh College in Troy, Michigan. Mr. White resigned
effective July 13, 2001.



                                       26
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION

Set forth is the information relating to all direct remuneration paid or accrued
by the Registrant during the last three years to the General Partner:


<TABLE>
<CAPTION>
(A)                                    (B)       (C)                  (C1)           (C2)               (D)
                                                                                     Securities of
                                                                                     property
                                                                                     insurance          Aggregate
                                                                                     benefits or        of
                                                 Cash and cash                       reimbursement      contingent
Name of individual                     Year      equivalent forms                    personal           or forms of
and capacities served                  Ended     of remuneration      Fees           benefits           remuneration
--------------------------------------------------------------------------------------------------------------------
<S>                                    <C>       <C>                  <C>            <C>                <C>
Berthel Fisher & Co. Leasing, Inc.     2001      $ -0-                $ 230,249      $ -0-              $ -0-
(General Partner)                      2000      $ -0-                $ 268,738      $ -0-              $ -0-
                                       1999      $ -0-                $ 137,677      $ -0-              $ -0-
</TABLE>






                                       27
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      (a) No person owns of record, or is known by the Registrant to own
beneficially, more than five percent of the Partnership Units.

      (b) The General Partner of the Registrant owns Units of the Registrant set
forth in the following table.

<TABLE>
<CAPTION>
     (1)                  (2)                                    (3)                     (4)
                   Name and Address of                    Amount and Nature of
Title of Class     Beneficial Ownership                   Beneficial Ownership      Percent of Class
--------------     --------------------                   --------------------      ----------------
<S>                <C>                                    <C>                       <C>
Units              Berthel Fisher & Co. Leasing, Inc.     Ten (10) Units;                 .08%
                   701 Tama Street                        sole owner.
                   Marion, IA 52302
</TABLE>


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Related party transactions are described in Notes 2 and 7 of the notes to the
financial statements.

                                     PART IV


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

<TABLE>
<CAPTION>
                                                                        Page No.
<S>                                                                     <C>
(a)   1. Financial Statements

            Balance Sheets as of December 31, 2001 and 2000                12

            Statements of Operations for the years ended
            December 31, 2001, 2000, and 1999                              13

            Statements of Changes in Partners' Equity for the years
            ended December 31, 2001 and 2000, and 1999                     14

            Statements of Cash Flows for the years ended
            December 31, 2001, 2000, and 1999                              15

            Notes to Financial Statements                                  16

      2. Financial Statements Schedules

            Information pursuant to Rule 12-09 (Schedule II) is
            included in the financial statements and notes thereto.

      3. Exhibits

            3,4 Amended and Restated Agreement of Telecommunications
            Income Fund XI, L.P.  currently in effect dated as of
            November 26, 1997(1)

            10.3 Revolving Loan and Security Agreement incorporated
            herein by reference to the Partnership's Form 10-Q filed
            on May 13, 1999

(b)   Reports on Form 8-K

            No reports on Form 8-K were filed in the fourth quarter
            of 2001.
</TABLE>

----------
(1)   Incorporated herein by reference to Exhibit A in the Partnership's
      registration statement on Form S-1, effective November 26,1997



                                       28
<PAGE>
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

                     TELECOMMUNICATIONS INCOME FUND XI, L.P.
                                  (REGISTRANT)

By Berthel Fisher & Company Leasing, Inc.

By: /s/ Thomas J. Berthel                                Date: March 25, 2002
    ---------------------------------------------
Thomas J. Berthel
President, Chief Executive Officer

By Berthel Fisher & Company Leasing, Inc.

By: /s/ Ronald O. Brendengen                             Date: March 25, 2002
    ---------------------------------------------
Ronald O. Brendengen
Chief Operating Officer, Chief Financial Officer,
Treasurer


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

/s/ Thomas J. Berthel                                    Date: March 25, 2002
-------------------------------------------------
Thomas J. Berthel
Chief Executive Officer
President, Director
Berthel Fisher & Company Leasing, Inc.
Corporate General Partner

/s/ Ronald O. Brendengen                                 Date: March 25, 2002
-------------------------------------------------
Ronald O. Brendengen
Chief Operating Officer, Chief Financial Officer,
Treasurer, Director
Berthel Fisher & Company Leasing, Inc.
Corporate General Partner

/s/ Daniel P. Wegmann                                    Date: March 25, 2002
-------------------------------------------------
Daniel P. Wegmann
Controller
Berthel Fisher & Company Leasing, Inc.
Corporate General Partner

/s/ Leslie D. Smith                                      Date: March 25, 2002
-------------------------------------------------
Leslie D. Smith
Director
Berthel Fisher & Company Leasing, Inc.
Corporate General Partner



                                       29
<PAGE>
                                  EXHIBIT INDEX




<TABLE>
<S>               <C>
      3.4         Amended and Restated Agreement of Telecommunications Income
                  Fund XI, L.P. currently in effect dated as of November 26,
                  1997 (1)

      10.3        Revolving Loan and Security Agreement incorporated herein by
                  reference to the Partnership's Form 10-Q filed on May 13, 1999
</TABLE>


----------

(1)   Incorporated herein by reference to Partnership Exhibit A to the
      prospectus included in the Partnership's post effective amendment No. 1 to
      Form S-1 registration statement filed on November 26, 1997.






                                       30