Form 10K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                        |X|  Annual  report  pursuant  to section 13 or 15(d) of
                             the Securities  Exchange Act of 1934 (fee required)
                             For the Year Ended December 31, 2000
                                       OR
                        |_|  Transition  report  pursuant to section 13 or 15(d)
                             of the  Securities  Exchange  Act of  1934  (no fee
                             required)  For the  transition  period from ____ to
                             ____

                        Commission File number 333-62477

                      ATEL Capital Equipment Fund VIII, LLC

California                                                          94-3307404
----------                                                          ----------
(State or other jurisdiction of                               (I. R. S. Employer
incorporation or organization)                               Identification No.)

           235 Pine Street, 6th Floor, San Francisco, California 94104
                    (Address of principal executive offices)

        Registrant's telephone number, including area code (415) 989-8800
        Securities registered pursuant to section 12(b) of the Act: None
        Securities registered pursuant to section 12(g) of the Act: None

Indicate  by a 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 |_|

State the aggregate market value of voting stock held by  non-affiliates  of the
registrant. Inapplicable


                       DOCUMENTS INCORPORATED BY REFERENCE

Prospectus  dated December 7, 1998,  filed  pursuant to Rule 424(b)  (Commission
File No. 33-62477) is hereby incorporated by reference into Part IV hereof.


Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of  Regulation  S-K  (ss.229.405)  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|





                                       1
<PAGE>

                                     PART I

Item 1:  BUSINESS

General Development of Business

ATEL Capital Equipment Fund VIII, LLC (the Company) was formed under the laws of
the State of California in July 1998.  The Company was formed for the purpose of
acquiring  equipment to engage in equipment  leasing and sales  activities.  The
Managing  Member  of  the  Company  is  ATEL  Financial  Corporation  (ATEL),  a
California corporation.

The Company  conducted  a public  offering of  15,000,000  of Limited  Liability
Company  Units  (Units),  at a price  of $10 per  Unit.  On  January  13,  1999,
subscriptions  for the minimum number of Units  (120,000,  $1,200,000)  had been
received and ATEL requested that the  subscriptions,  except those received from
Pennsylvania  investors (7,500 Units,  $75,000),  be released to the Company. On
that date, the Company  commenced  operations in its primary  business  (leasing
activities). As of February 18, 1999, the Company had received subscriptions for
775,777 Units ($7,757,770) and ATEL requested that the remaining funds in escrow
(from  Pennsylvania  investors)  be released to the Company.  As of November 30,
2000, the Company had received subscriptions for 13,570,138 ($135,701,380) Units
in addition to the Initial  Members' Units and the offering was terminated.  All
of the Units were issued and outstanding as of December 31, 2000.

The Company's principal  objectives are to invest in a diversified  portfolio of
equipment  which will (i) preserve,  protect and return the  Company's  invested
capital;  (ii)  generate  regular  distributions  to the  partners  of cash from
operations and cash from sales or refinancing,  with any balance remaining after
certain minimum distributions to be used to purchase additional equipment during
the reinvestment period, ending 72 months after the end of the year in which the
Final  Closing  occurs  (which  will be  December  31,  2006) and (iii)  provide
additional  distributions  following  the  reinvestment  period  and  until  all
equipment  has been sold.  The  Company is  governed  by its  Limited  Liability
Company Operating Agreement (Operating Agreement).

Narrative Description of Business

The Company has acquired and intends to acquire  various  types of equipment and
to lease such equipment pursuant to "Operating" leases and "High Payout" leases,
where "Operating"  leases are defined as being leases in which the minimum lease
payments  during  the  initial  lease term do not  recover  the full cost of the
equipment and "High Payout"  leases recover at least 90% of such cost. It is the
intention of ATEL that a majority of the aggregate  purchase  price of equipment
will represent equipment leased under "High Payout" leases upon final investment
of the Net Proceeds of the  Offering and that no more than 20% of the  aggregate
purchase price of equipment will be invested in equipment acquired from a single
manufacturer.

The Company will only purchase equipment for which a lease exists or for which a
lease will be entered into at the time of the purchase.

 As of December  31,  2000,  the Company had  purchased  equipment  with a total
acquisition price of $218,076,236.

The Company's  objective is to lease a minimum of 75% of the equipment  acquired
with the net  proceeds of the  offering to lessees  which (i) have an  aggregate
credit rating by Moody's Investor service,  Inc. of Baa or better, or the credit
equivalent as determined by ATEL, with the aggregate  rating weighted to account
for the  original  equipment  cost for each item leased or (ii) are  established
hospitals with histories of profitability or municipalities.  The balance of the
original  equipment  portfolio may include  equipment  leased to lessees  which,
although  deemed  creditworthy  by the  Managing  Member,  would not satisfy the
general  credit  rating  criteria  for the  portfolio.  In  excess of 75% of the
equipment  acquired  with the net  proceeds of the  offering  (based on original
purchase cost) has been leased to lessees with an aggregate credit rating of Baa
or better or to such hospitals or municipalities.



                                       2
<PAGE>

During 2000 and 1999,  certain  lessees  generated  significant  portions of the
Company's total lease revenues as follows:

<TABLE>
<CAPTION>
          Lessee                       Type of Equipment                   2000   1999
          ------                       -----------------                   ----   ----
<S>                                    <C>                                 <C>     <C>
Burlington Northern Santa Fe Railroad  Locomotives and Auto Racks          10%      *
Transamerica Leasing Inc.              Intermodal containers                *      31%
Staples, Inc.                          Point of sale / materials handling   *      12%
Stewart & Stevenson Services, Inc.     Gas Compressors                      *      12%
Seamex International Ltd.              Anchor Handler Tug Supply Vessel     *      10%
*  Less than 10%
</TABLE>

These percentages are not expected to be comparable in future periods.

The equipment leasing industry is highly competitive.  Equipment  manufacturers,
corporations, partnerships and others offer users an alternative to the purchase
of most types of equipment with payment terms which vary widely depending on the
lease  term  and type of  equipment.  The  ability  of the  Company  to keep the
equipment leased and/or operating and the terms of the acquisitions,  leases and
dispositions  of equipment  depends on various factors (many of which are not in
the  control  of ATEL or the  Company),  such as  general  economic  conditions,
including the effects of inflation or recession,  and fluctuations in supply and
demand for various  types of  equipment  resulting  from,  among  other  things,
technological and economic obsolescence.

ATEL will seek to limit the amount invested in equipment to any single lessee to
not more than 20% of the aggregate purchase price of equipment owned at any time
during the reinvestment period.

The business of the Company is not seasonal.

The Company has no full time employees.

Equipment Leasing Activities

The Company has acquired a diversified portfolio of equipment. The equipment has
been leased to lessees in various industries. The following tables set forth the
types of  equipment  acquired by the Company  through  December 31, 2000 and the
industries  to which the assets have been  leased.  The  Company  has  purchased
certain assets subject to existing  non-recourse  debt. For financial  statement
purposes,  non-recourse  debt has been offset  against the investment in certain
direct finance leases where the right of setoff exists.

                                 Purchase Price Excluding    Percentage of Total
        Asset Types                  Acquisition Fees             Acquisitions
        -----------                  ----------------             ------------
Transportation, rail                     $43,246,086                  19.83%
Manufacturing                             42,857,769                  19.65%
Aircraft                                  31,614,874                  14.50%
Transportation, other                     25,903,287                  11.88%
Transportation, intermodal
   containers                             21,228,750                   9.73%
Gas compressors                           13,841,998                   6.35%
Materials handling                         9,531,096                   4.37%
Point of sale / office automation          8,028,510                   3.68%
Storage tanks                              6,712,090                   3.08%
Marine vessels                             3,952,500                   1.81%
Other *                                   11,159,276                   5.12%
                                     ----------------               ---------
                                        $218,076,236                 100.00%
                                     ================               =========

*  Individual  asset  types  included in "Other"  represent  less than 2% of the
total.


                                       3
<PAGE>

                                 Purchase Price Excluding    Percentage of Total
    Industry of Lessee               Acquisition Fees             Acquisitions
    ------------------               ----------------             ------------
Transportation, rail                     $43,246,086                  19.84%
Manufacturing, other                      33,698,769                  15.45%
Transportation, air                       31,614,874                  14.50%
Transportation, other                     27,390,656                  12.56%
Transportation, containers                21,228,750                   9.73%
Manufacturing, electronics                20,901,071                   9.58%
Retail                                    15,919,503                   7.30%
Natural gas                               13,841,998                   6.35%
Other *                                   10,234,529                   4.69%
                                     ----------------               ---------
                                        $218,076,236                 100.00%
                                     ================               =========

* Individual lessee industries included in "Other" represent less than 2% of the
total.

For further information  regarding the Company's equipment lease portfolio as of
December  31,  2000,  see Note 3 to the  financial  statements,  Investments  in
equipment  and  leases,   set  forth  in  Item  8,   Financial   Statements  and
Supplementary Data.


Item 2.  PROPERTIES

The  Company  does  not own or  lease  any real  property,  plant or  materially
important  physical  properties  other than the equipment  held for lease as set
forth in Item 1.


Item 3.  LEGAL PROCEEDINGS

None


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

None


                                     PART II

Item 5.  MARKET FOR REGISTRANT'S LIMITED LIABILITY COMPANY UNITS
              AND RELATED MATTERS

Market Information

The Units are transferable  subject to restrictions on transfers which have been
imposed under the securities  laws of certain  states.  However,  as a result of
such restrictions, the size of the Company and its investment objectives, to the
ATEL's knowledge,  no established  public secondary trading market has developed
and it is unlikely that a public trading market will develop in the future.

Holders

As of December 31, 2000, a total of 3,612 investors were record holders of Units
in the Company.

Dividends

The Company does not make dividend  distributions.  However,  the Members of the
Company are entitled to certain  distributions  as provided  under the Operating
Agreement.



                                       4
<PAGE>

ATEL shall have sole  discretion  in  determining  the amount of  distributions;
provided,  however, that the Managing Member will not reinvest in equipment, but
will  distribute,  subject to payment of any  obligations  of the Company,  such
available  cash from  operations  and cash from sales or  refinancing  as may be
necessary to cause total  distributions  to the Members for each year during the
reinvestment period to equal an as yet to be determined amount between $0.80 and
$1.00 per Unit.

The rate for monthly  distributions  from 1999  operations was $0.0667 per Unit.
The  distributions  were made in  February  1999  through  December  1999 and in
January 2000. For each quarterly  distribution  (made in April, July and October
1999 and in January 2000) the rate was $0.20 per Unit.  Distributions  were from
1999 cash flows from operations. An additional distribution from 1999 cash flows
was made in January 2000. The amount of the distribution was calculated for each
Unit so as to bring the average of all monthly distributions received to a total
of $.075  per  month  per Unit and to  $0.225  per Unit per  quarter  for  those
receiving  distributions on a quarterly basis. The total distributions represent
a  distribution  rate of 9% per  annum on the  original  invested  capital.  The
amounts  paid to  holders  of Units  were  adjusted  based on the length of time
within  the  previous  calendar  month,  quarter  or year  that the  Units  were
outstanding.

The rate for monthly  distributions  from 2000  operations was $0.75 for January
through October 2000. The  distributions  were made in February through November
2000. The rate for the distribution for November 2000 was $0.79167. The rate for
the distribution for December 2000 was $0.07667. An additional  distribution was
made in December  2000. The amount of the  distribution  was calculated for each
Unit so as to bring the average of all monthly distributions received to a total
of $0.079167  per Unit per month for the period from February  through  November
2000. For each quarterly distribution (made in April, July and October 2000) the
rate was $0.225 per Unit. For the quarterly  distribution  made in January 2001,
the rate was $0.235.  An additional  distribution was made in December 2000. The
amount  of the  distribution  was  calculated  for each  Unit so as to bring the
average of all quarterly  distributions  received to a total of $0.2375 per Unit
per quarter for the period from February  through  October  2000.  Distributions
were from 2000 cash flows from operations.

The following table presents summarized  information regarding  distributions to
Other Members:

                                              2000        1999
                                              ----        ----
Distributions of net (loss) income          $ (0.2900)   $ 0.0600
Return of investment                           1.2100      0.5500
                                           ----------- -----------
Distributions per unit                         0.9200      0.6100
Differences due to timing of distributions     0.0275      0.2900
                                           ----------- -----------
Nominal distribution rates from above        $ 0.9475    $ 0.9000
                                           =========== ===========



Information provided pursuant to ss. 228.701 (Item 701(f)) (formerly included in
Form SR):

(1) Effective date of the offering:  December 7, 1998; File Number: 333-62477
(2) Offering commenced: December 7, 1998
(3) The offering did not terminate before any securities were sold.
(4) The offering was terminated prior to the sale of all of the securities.
(5) The managing underwriter is ATEL Securities Corporation.
(6) The title of the registered class of securities is "Limited Liability
    Company Units"


                                       5
<PAGE>

(7) Aggregate amount and offering price of securities registered and sold as of
    November 30, 2000.

<TABLE>
<CAPTION>
                                                                  Aggregate                          Aggregate
                                                                  price of                            price of
                                                                  offering                            offering
                                                  Amount           amount            Amount            amount
Title of Security                               Registered       registered           sold              sold
-----------------                               ----------       ----------           ----              ----
<S>                                                <C>            <C>                 <C>            <C>
Limited Liability Company Units                    15,000,000     $150,000,000        13,568,635     $ 135,686,350

(8) Costs incurred for the issuers  account in connection  with the issuance and
distribution of the securities registered for each category listed below:

                                               Direct or indirect payments to
                                               directors, officers, managing
                                               member of the issuer or their
                                                associates; to persons owning
                                                 ten percent or more of any        Direct or
                                               class of equity securities of        indirect
                                              the issuer; and to affiliates of    payments to
                                                the issuer                           others            Total
                                                ----------                           ------            -----

Underwriting discounts and
commissions                                       $ 1,837,533                       $ 11,052,670      $ 12,890,203

Other expenses                                              -                          6,355,886         6,355,886
                                                            -
                                              ----------------                  ----------------- -----------------
Total expenses                                    $ 1,837,533                       $ 17,408,556      $ 19,246,089
                                              ================                  ================= =================

(9) Net offering proceeds to the issuer after the total expenses in item 8:                          $ 116,440,261

(10) The amount of net  offering  proceeds  to the  issuer  used for each of the
purposes listed below:

                                                Direct or indirect payments
                                              to directors, officers, general
                                              partners of the issuer or their
                                                   associates; to persons
                                                 owning ten percent or more        Direct or
                                                   of any class of equity           indirect
                                               securities of the issuer; and      payments to
                                                to affiliates of the issuer          others            Total
                                                ---------------------------          ------            -----

Purchase and installation of
machinery and equipment                                   $ -                       $115,761,829     $ 115,761,829

Working capital                                             -                            678,432           678,432
                                              ----------------                  ----------------- -----------------
                                                          $ -                       $116,440,261     $ 116,440,261
                                              ================                  ================= =================
</TABLE>

(11) The use of the proceeds in Item 10 does not represent a material  change in
the uses of proceeds described in the prospectus.




                                       6
<PAGE>

Item 6.  SELECTED FINANCIAL DATA

The following table presents selected  financial data of the Company at December
31, 2000, 1999 and 1998. This financial data should be read in conjunction  with
the financial statements and related notes included under Item 8 of this report.

<TABLE>
<CAPTION>
                                                                                      2000              1999             1998
                                                                                      ----              ----             ----
<S>                                                                                 <C>               <C>               <C>
Gross revenues                                                                      $ 31,047,485       $ 8,660,653        $ -
Net (loss) income                                                                   $ (2,305,631)        $ 438,835        $ -
Weighted average Units                                                                10,634,792         4,031,294         50
Net (loss) income per Unit, based on weighted average Units outstanding                  $ (0.29)           $ 0.06        $ -
Distributions per Unit, based on weighted average Units outstanding                       $ 0.92            $ 0.61        $ -
Total Assets                                                                        $198,832,652      $145,663,336      $ 600
Non-recourse and long-term debt                                                     $ 93,993,744      $ 71,848,617        $ -
Total Members' Capital                                                              $101,338,501      $ 64,130,010      $ 600
</TABLE>


Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS

Capital Resources and Liquidity

The Company commenced its offering on December 7, 1998. On January 13, 1999, the
Company commenced operations in its primary business (leasing  activities).  The
offering was terminated on November 30, 2000. Total proceeds of the offering was
$135,701,880.  Until the  Company's  initial  portfolio  of  equipment  has been
purchased,  funds which have been received, but which have not yet been invested
in  leased   equipment,   are   invested   in   interest-bearing   accounts   or
high-quality/short-term commercial paper. The Company's public offering provides
for a total maximum capitalization of $150,000,000.

During the  funding  period,  the  Company's  primary  source of  liquidity  was
subscription  proceeds from the public  offering of Units.  The liquidity of the
Company will vary in the future, increasing to the extent cash flows from leases
and proceeds of asset sales exceed expenses,  and decreasing as lease assets are
acquired,  as  distributions  are made to the other  members  and to the  extent
expenses exceed cash flows from leases and proceeds from asset sales.

As another  source of  liquidity,  the Company is  expected to have  contractual
obligations  with a diversified  group of lessees for fixed lease terms at fixed
rental amounts.  As the initial lease terms expire, the Company will re-lease or
sell the equipment.  The future liquidity beyond the contractual minimum rentals
will depend on ATEL's success in re-leasing or selling the equipment as it comes
off lease.

The  Company  participates  with  ATEL  and  certain  of  its  affiliates  in  a
$77,500,000  revolving line of credit with a financial institution that includes
certain financial covenants.  The line of credit expires on July 28, 2001. As of
December 31, 2000,  the Company had no borrowings  under the line of credit.  At
December 31, 2000, $39,969,040 was available under the line of credit.

The Company  anticipates  reinvesting  a portion of lease  payments  from assets
owned in new leasing  transactions.  Such reinvestment will occur only after the
payment  of  all  obligations,   including  debt  service  (both  principal  and
interest), the payment of management and acquisition fees to the Managing Member
and providing for cash distributions to the Other Members. At December 31, 2000,
there  were   commitments  to  purchase  lease  assets  totaling   approximately
$45,939,000.



                                       7
<PAGE>

ATEL or an  Affiliate  may purchase  equipment  in its own name,  the name of an
Affiliate or the name of a nominee,  a trust or otherwise and hold title thereto
on a temporary or interim basis for the purpose of facilitating  the acquisition
of such  equipment or the  completion of manufacture of the equipment or for any
other purpose  related to the business of the Company,  provided,  however that:
(i) the transaction is in the best interest of the Company;  (ii) such equipment
is  purchased  by the Company for a purchase  price no greater  than the cost of
such  equipment  to ATEL or  Affiliate  (including  any  out-of-pocket  carrying
costs),  except for  compensation  permitted by the Operating  Agreement;  (iii)
there is no difference  in interest  terms of the loans secured by the equipment
at the time  acquired by ATEL or Affiliate and the time acquired by the Company;
(iv)  there  is no  benefit  arising  out of  such  transaction  to  ATEL or its
Affiliate  apart from the  compensation  otherwise  permitted  by the  Operating
Agreement;  and (v) all income  generated by, and all expenses  associated with,
equipment so acquired shall be treated as belonging to the Company.

The Company currently has available adequate reserves to meet its immediate cash
requirements,  but in the event those reserves were found to be inadequate,  the
Company would likely be in a position to borrow against its current portfolio to
meet such  requirements.  ATEL  envisions  no such  requirements  for  operating
purposes.

In 1999,  the Company  established  a $70 million  receivables  funding  program
(which was subsequently  increased to $125 million) with a receivables financing
company  that issues  commercial  paper rated A1 from  Standard and Poors and P1
from Moody's Investor Services. In this receivables funding program, the lenders
received a general lien against all of the otherwise  unencumbered assets of the
Company.  The program  provides for  borrowing at a variable  interest  rate and
requires the Managing  Member to enter into hedge  agreements with certain hedge
counter parties (also rated A1/P1) to mitigate the interest rate risk associated
with a variable rate note.  The Managing  Member  anticipates  that this program
will allow the  Company to avail  itself of lower cost debt than that  available
for individual non-recourse debt transactions.

It is the  intention of the Company to use the  receivables  funding  program to
finance  assets  leased to those lessees  which,  in the opinion of the Managing
Member,  have a  relatively  lower  potential  risk of lease  default than those
lessees  with  equipment  financed  with  non-recourse  debt.  The Company  will
continue to use its traditional  sources of non-recourse  secured debt financing
on a transaction basis as a means of mitigating credit risk.

ATEL expects that aggregate  borrowings in the future will be approximately  50%
of aggregate  equipment cost. In any event, the Operating  Agreement limits such
borrowings to 50% of the total cost of equipment, in aggregate.

The  Company  commenced  regular   distributions,   based  on  cash  flows  from
operations,  beginning with the month of January 1999. The distribution was made
in February 1999.

If  inflation  in the general  economy  becomes  significant,  it may affect the
Company  inasmuch as the residual  (resale) values and rates on re-leases of the
Company's  leased assets may increase as the costs of similar  assets  increase.
However, the Company's revenues from existing leases would not increase, as such
rates are generally  fixed for the terms of the leases  without  adjustment  for
inflation.

If interest rates increase  significantly,  the lease rates that the Company can
obtain on future leases will be expected to increase as the cost of capital is a
significant  factor in the pricing of lease financing.  Leases already in place,
for the most part, would not be affected by changes in interest rates.

Cash Flows

In 2000 and 1999,  the Company's  primary  sources of cash were various types of
debt proceeds and the proceeds of its public offering of Units.



                                       8
<PAGE>

The primary source of cash from  operating  activities in both 2000 and 1999 was
operating lease rents.

Rents from direct financing leases was the only significant  source of cash from
investing  activities in either 2000 or in 1999. In both years,  uses of cash in
investing activities consisted primarily of purchases of assets on operating and
direct  financing  leases.  Cash  was  also  used to pay  initial  direct  costs
associated with those leases.

In 2000 and 1999, the primary  source of cash from financing  activities was the
proceeds of the  Company's  public  offering.  Proceeds  from  non-recourse  and
long-term  debt and  borrowings  under the line of credit also  provided cash in
2000 and 1999. Cash provided by financing  activities was used to purchase lease
assets.

Results of Operations

As of January 13,  1999,  subscriptions  for the minimum  amount of the offering
($1,200,000) had been received and accepted by the Company. As of that date, the
Company commenced operations in its primary business (leasing activities). There
were no  operations  in 1998.  Because  of the  timing  of the  commencement  of
operations and the fact that the initial  portfolio  acquisitions  have not been
completed,  the results of  operations  in 2000 and 1999 are not  expected to be
comparable  to future  periods.  After the  Company's  public  offering  and its
initial  asset  acquisition  stage  terminate,  the  results of  operations  are
expected to change significantly.

Substantially   all   employees  of  ATEL  track  time  incurred  in  performing
administrative  services on behalf of the Company.  ATEL believes that the costs
reimbursed  are the lower of (i) actual costs  incurred on behalf of the Company
or (ii) the amount the Company would be required to pay independent  parties for
comparable administrative services in the same geographic location.

Operations  in 2000  resulted in a net loss of  $2,305,631.  Operations  in 1999
resulted  in net  income  of  $438,835.  Operations  in future  periods  are not
expected to be comparable to those in 2000 and 1999.

Revenues from operating leases and direct finance leases increased significantly
in 2000 compared to 1999. These increases were the result of asset  acquisitions
over the last two years.  Revenues are expected to increase  again in 2001,  but
not as dramatically as in 2000.

Depreciation expense also increased as a result of the purchases of lease assets
in 2000 and 1999.

Average  debt  balances  increased  in 2000  compared  to 1999.  This led to the
increase in interest  expense  compared to 1999.  The  proceeds of the debt were
used to acquire additional lease assets.

Impact of the Year 2000

To date, the Company has  experienced no significant  Year 2000 problems and the
Managing  Member  believes it does not have continued  exposure to the Year 2000
problem.

Recent Accounting Pronouncement

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standards ("SFAS") No. 133,  Accounting for Derivative
Instruments  and  Hedging  Activities,  which  established  new  accounting  and
reporting standards for derivative instruments. SFAS No. 133 has been amended by
SFAS No. 137, issued in June 1999, and by SFAS No. 138, issued in June 2000.

SFAS No. 133, as amended,  requires the Company to recognize all  derivatives as
either assets or liabilities in the balance sheet and measure those  instruments
at fair value.  It further  provides  criteria for derivative  instruments to be
designated as fair value, cash flow, or foreign currency hedges, and establishes
accounting  standards for reporting  changes in the fair value of the derivative
instruments.  Upon  adoption,  the Company  will be  required to adjust  hedging
instruments  to fair value in the balance  sheet and  recognize  the  offsetting
gains  or  losses  as  adjustments  to  be  reported  in  net  income  or  other
comprehensive income, as appropriate.



                                       9
<PAGE>

The  Company  will adopt  SFAS No.  133,  as  amended,  on January 1, 2001.  The
Managing  Member  believes  that the  adoption of SFAS No. 133,  will not have a
material effect on the Company's results of operations or financial position.


Item 7a.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

The Company,  like most other  companies,  is exposed to certain  market  risks,
including primarily changes in interest rates. The Company believes its exposure
to other market risks,  including foreign currency exchange rate risk, commodity
risk and equity price risk, are insignificant to both its financial position and
results of operations.

In general,  the Company manages its exposure to interest rate risk by obtaining
fixed rate debt. The fixed rate debt is structured so as to match the cash flows
required  to service  the debt to the  payment  streams  under  fixed rate lease
receivables.  The  payments  under the leases  are  assigned  to the  lenders in
satisfaction of the debt. Furthermore, the Company has historically been able to
maintain  a stable  spread  between  its cost of funds and lease  yields in both
periods of rising and falling rates. Nevertheless,  the Company frequently funds
leases  with its  floating  rate line of credit  and is,  therefore,  exposed to
interest rate risk until fixed rate financing is arranged,  or the floating rate
line of credit is repaid.  As of December  31,  2000,  there was no  outstanding
balance on the floating  rate line of credit.  Also, as described in the caption
"Capital  Resources  and  Liquidity,"  the Company  entered  into a  receivables
funding facility in 1999.  Since interest on the outstanding  balances under the
facility varies, the Company is exposed to market risks associated with changing
interest rates.

To hedge its interest  rate risk,  the Company  enters into  interest rate swaps
which effectively modify the underlying interest  characteristic on the facility
from floating to fixed. Under the swap agreements, the Company makes or receives
variable  interest  payments  to or from the  counterparty  based on a  notional
principal  amount.  The net  differential  paid or  received  by the  Company is
recognized  as an  adjustment  to  interest  expense  related  to  the  facility
balances.  The amount paid or received  represents  the  difference  between the
payments required under the variable rate facility and the amounts due under the
facility at the fixed (hedged) rate. As of December 31, 2000,  borrowings on the
facility were  $86,668,000  and the  associated  variable rate was 6.7527%.  The
average fixed rate achieved with the swap agreements was 7.32%.

In general,  these swap  agreements  eliminate the Company's  interest rate risk
associated with variable rate borrowings. However, the Company is exposed to and
manages  credit  risk  associated  with the  counterparty  by dealing  only with
institutions it considers  financially  sound.  If these  agreements were not in
place,  based on the  Company's  facility  borrowings  at December  31,  2000, a
hypothetical 1.00% increase or decrease in market interest rates, would increase
or decrease  the  Company's  2001  variable  interest  expense by  approximately
$786,000.


Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the  Report  of  Independent  Auditors,  Financial  Statements  and Notes to
Financial Statements attached hereto at pages 10 through 24.









                                       10
<PAGE>

                REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS



The Members
ATEL Capital Equipment Fund VIII, LLC

We have audited the accompanying  balance sheets of ATEL Capital  Equipment Fund
VIII,  LLC as of December  31,  2000 and 1999,  and the  related  statements  of
operations,  changes in members'  capital and cash flows for the two years ended
December 31, 2000, and the related statements of changes in members' capital and
cash flows for the period from July 31, 1998  (inception)  through  December 31,
1998.  These  financial  statements  are  the  responsibility  of the  Company'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. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
from  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,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of ATEL Capital  Equipment Fund
VIII, LLC at December 31, 2000 and 1999, and the results of its operations,  its
changes in members'  capital and its cash flows for the two years ended December
31, 2000, and its changes in members'  capital and its cash flows for the period
from July 31, 1998  (inception)  through  December 31, 1998, in conformity  with
accounting principles generally accepted in the United States.

                                                          /s/ ERNST & YOUNG LLP

San Francisco, California
January 29, 2001





                                       11
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                                 BALANCE SHEETS

                           DECEMBER 31, 2000 AND 1999


                                     ASSETS

                                                    2000             1999
                                                    ----             ----
Cash and cash equivalents                      $     2,484,785    $   3,973,342
Accounts receivable                                  5,339,569        2,124,786
Other assets                                           115,000          145,000
Investments in equipment and leases                190,893,298      139,420,208
                                              ----------------- ----------------
Total assets                                     $ 198,832,652    $ 145,663,336
                                              ================= ================


                        LIABILITIES AND MEMBERS' CAPITAL


Long-term debt                                    $ 86,668,000     $ 64,674,000
Non-recourse debt                                    7,325,744        7,174,617
Line of credit                                               -        7,500,000
Accounts payable:
   Managing Member                                     695,548          811,287
   Other                                               485,895            1,123

Accrued interest payable                               267,823          114,602

Unearned operating lease income                      2,051,141        1,257,697
                                              ----------------- ----------------
Total liabilities                                   97,494,151       81,533,326
Members' capital:
     Managing Member                                         -                -
     Other members                                 101,338,501       64,130,010
                                              ----------------- ----------------
Total members' capital                             101,338,501       64,130,010
                                              ----------------- ----------------
Total liabilities and members' capital           $ 198,832,652    $ 145,663,336
                                              ================= ================


                             See accompanying notes.


                                       12
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                            STATEMENTS OF OPERATIONS

                     YEARS ENDED DECEMBER 31, 2000 AND 1999


Revenues:                                          2000             1999
                                                   ----             ----
   Leasing activities:
      Operating leases                           $ 29,965,693      $ 8,212,649
      Direct financing leases                         810,501          347,764
      Gain on sales of assets                           1,453            3,017
Interest                                              175,029           95,948
Other                                                  94,809            1,275
                                             ----------------- ----------------
                                                   31,047,485        8,660,653
Expenses:
Depreciation and amortization                      22,588,276        5,392,504
Interest expense                                    7,365,041        1,340,804
Administrative cost reimbursements to
   Managing Member                                  1,408,523          767,386
Asset management fees to Managing Member            1,465,566          443,943
Professional fees                                     127,345          155,743
Other                                                 398,365          121,438
                                             ----------------- ----------------
                                                   33,353,116        8,221,818
                                             ----------------- ----------------
Net (loss) income                                $ (2,305,631)       $ 438,835
                                             ================= ================

Net (loss) income:
   Managing Member                                  $ 795,009        $ 199,415
   Other members                                   (3,100,640)         239,420
                                             ----------------- ----------------
                                                 $ (2,305,631)       $ 438,835
                                             ================= ================

Net (loss) income per Limited
   Liability Company Unit                             $ (0.29)          $ 0.06
Weighted average number of
   Units outstanding                                10,634,792        4,025,294



                             See accompanying notes.


                                       13
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                    STATEMENT OF CHANGES IN MEMBERS' CAPITAL

                  FOR THE PERIOD FROM JULY 31, 1998 (INCEPTION)
                      THROUGH DECEMBER 31, 1998 AND FOR THE
                     YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                                         Other Members                Managing
                                                         -------------
                                                    Units            Amount            Member            Total
                                                    -----            ------            ------            -----
<S>                                                  <C>            <C>                   <C>           <C>
Capital contributions                                       50             $ 500             $ 100            $ 600
                                               ---------------- ----------------- ----------------- ----------------
Balance December 31, 1998                                   50               500               100              600

Capital contributions                                7,744,276        77,442,760                 -       77,442,760
Less selling commissions to affiliates                                (7,357,062)                -       (7,357,062)
Other syndication costs to affiliates                                 (3,734,924)                -       (3,734,924)
Distributions to Managing Member                                               -          (199,515)        (199,515)
Distributions to other members ($0.61 per Unit)                       (2,460,684)                -       (2,460,684)
Net income                                                               239,420           199,415          438,835
                                               ---------------- ----------------- ----------------- ----------------
Balance December 31, 1999                            7,744,326        64,130,010                 -       64,130,010

Capital contributions                                5,825,862        58,258,620                 -       58,258,620
Less selling commissions to affiliates                                (5,534,569)                -       (5,534,569)
Other syndication costs to affiliates                                 (2,619,534)                -       (2,619,534)
Distributions to Managing Member                                               -          (795,009)        (795,009)
Distributions to other members ($0.92 per Unit)                       (9,795,386)                -       (9,795,386)
Net (loss) income                                                     (3,100,640)          795,009       (2,305,631)
                                               ---------------- ----------------- ----------------- ----------------
Balance December 31, 2000                           13,570,188      $101,338,501               $ -    $ 101,338,501
                                               ================ ================= ================= ================
</TABLE>


                             See accompanying notes.


                                       14
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                            STATEMENTS OF CASH FLOWS

                  FOR THE PERIOD FROM JULY 31, 1998 (INCEPTION)
                      THROUGH DECEMBER 31, 1998 AND FOR THE
                     YEARS ENDED DECEMBER 31, 2000 AND 1999


<TABLE>
<CAPTION>
                                                                     2000              1999             1998
                                                                     ----              ----             ----
Operating activities:
<S>                                                                 <C>               <C>                    <C>
Net (loss) income                                                  $ (2,305,631)        $ 438,835
Adjustments to reconcile net (loss) income to cash provided by
   operating activities:
   Gain on sales of assets                                               (1,453)           (3,017)
   Depreciation and amortization                                     22,588,276         5,392,504
   Changes in operating assets and liabilities:
      Accounts receivable                                            (3,214,783)       (2,124,786)
      Other assets                                                       30,000          (145,000)
      Accounts payable, Managing Member                                (115,739)          811,287
      Accounts payable, other                                           484,772             1,123
      Accrued interest                                                  153,221           114,602
      Unearned lease income                                             793,444         1,257,697
                                                               ----------------- -----------------
Net cash provided by operating activities                            18,412,107         5,743,245
                                                               ----------------- -----------------

Investing activities:
Purchases of equipment on operating leases                          (66,010,813)     (135,053,806)
Purchases of equipment on direct financing leases                    (9,367,277)       (9,992,009)
Reduction of net investment in direct financing leases                2,154,474           951,549
Payment of initial direct costs to Managing Member                     (844,058)         (753,607)
Proceeds from sales of assets                                             7,761            38,178
                                                               ----------------- -----------------
Net cash used in investing activities                               (74,059,913)     (144,809,695)
                                                               ----------------- -----------------

Financing activities:
Capital contributions received                                       58,258,620        77,442,760            $ 600
Payment of selling commissions and other syndication costs to
   Managing Member                                                   (8,154,103)      (11,091,986)               -
Proceeds of non-recourse debt                                         2,337,614         7,174,617                -
Repayments of non-recourse debt                                      (2,186,487)                -                -
Proceeds of other long-term debt                                     34,900,000        65,000,000                -
Repayments of other long-term debt                                  (12,906,000)         (326,000)               -
Repayments of line of credit                                        (36,055,729)      (69,141,662)               -
Borrowings under line of credit                                      28,555,729        76,641,662                -
Distributions to other members                                       (9,795,386)       (2,460,684)               -
Distributions to Managing Member                                       (795,009)         (199,515)               -
                                                               ----------------- ----------------- ----------------
Net cash provided by financing activities                            54,159,249       143,039,192              600
                                                               ----------------- ----------------- ----------------

Net (decrease) increase in cash and cash equivalents                 (1,488,557)        3,972,742              600
Cash and cash equivalents at beginning of period                      3,973,342               600                -
                                                               ----------------- ----------------- ----------------
Cash and cash equivalents at end of period                          $ 2,484,785       $ 3,973,342            $ 600
                                                               ================= ================= ================

Supplemental disclosures of cash flow information:
Cash paid during the period for interest                            $ 6,571,597       $ 1,340,804              $ -
                                                               ================= ================= ================
</TABLE>

                             See accompanying notes.


                                       15
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 2000


1.  Organization and Limited Liability Company matters:

ATEL Capital Equipment Fund VIII, LLC (the Company) was formed under the laws of
the State of California on July 31, 1998 for the purpose of acquiring  equipment
to engage in equipment  leasing and sales  activities.  The Company may continue
until  December 31, 2019.  The Managing  Member of the Company is ATEL Financial
Corporation  (ATEL),  a California  corporation.  Contributions in the amount of
$600 had been received as of December 31, 1998,  $100 of which  represented  the
Managing Member's (ATEL Financial  Corporation's)  (ATEL's) continuing interest,
and $500 of which  represented the Initial  Members'  capital  investment.  Each
Member's  personal  liability for  obligations of the Company  generally will be
limited  to  the  amount  of  their  respective   contributions  and  rights  to
undistributed profits and assets of the Company.

On January 13, 1999,  subscriptions  for the minimum  number of Units  (120,000,
$1,200,000) had been received. On that date, the Company commenced operations in
its primary business (leasing activities).

The Company, or the Managing Member on behalf of the Company,  incurred costs in
connection with the  organization,  registration  and issuance of the Units. The
amount of such  costs to be borne by the  Company  was  limited  to 15% of Gross
Proceeds of up to $25,000,000 and 14% of Gross Proceeds in excess of $25,000,000
(see Note 6).

The Company's  business  consists of leasing  various types of equipment.  As of
December 31, 2000,  the original  terms of the leases  ranged from six months to
nine years.

Pursuant to the Operating Agreement,  the Managing Member receives  compensation
and  reimbursements for services rendered on behalf of the Company (see Note 6).
The  Managing  Member is required to  maintain  in the Company  reasonable  cash
reserves for working capital, the repurchase of Units and contingencies.


2.  Summary of significant accounting policies:

Equipment on operating leases:

Equipment on operating leases is stated at cost.  Depreciation is being provided
by use of the  straight-line  method over the terms of the related leases to the
equipment's estimated residual values at the end of the leases.

Revenues  from  operating  leases are  recognized  evenly  over the lives of the
related leases.

Direct financing leases:

Income from direct financing lease  transactions is reported using the financing
method of accounting,  in which the Company's  investment in the leased property
is reported  as a  receivable  from the lessee to be  recovered  through  future
rentals.  The income  portion of each  rental  payment  is  calculated  so as to
generate a constant rate of return on the net receivable outstanding.

Investment in leveraged leases:

Leases which are financed  principally with non-recourse debt at lease inception
and which meet certain other  criteria are  accounted  for as leveraged  leases.
Leveraged lease contracts  receivable are stated net of the related non-recourse
debt service (which  includes  unpaid  principal and aggregate  interest on such
debt) plus estimated  residual values.  Unearned income represents the excess of
anticipated  cash flows (after  taking into account the related debt service and
residual  values)  over the  investment  in the lease and is  amortized  using a
constant rate of return  applied to the net investment  when such  investment is
positive.



                                       16
<PAGE>

                     ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 2000


2.  Summary of significant accounting policies (continued):

Statements of cash flows:

For purposes of the Statements of Cash Flows, cash and cash equivalents includes
cash in banks and cash equivalent investments with original maturities of ninety
days or less.

Income taxes:

The Company  does not  provide for income  taxes since all income and losses are
the liability of the  individual  partners and are allocated to the partners for
inclusion in their individual tax returns.

The tax basis of the  Company's  net  assets  and  liabilities  varies  from the
amounts presented in these financial statements (unaudited):

                                                   2000              1999
                                                   ----              ----
    Financial statement basis of net assets      $101,338,501      $ 64,130,010
    Tax basis of net assets                        79,812,598        61,162,734
                                             ----------------- -----------------
    Difference                                   $ 21,525,903       $ 2,967,276
                                             ================= =================

The  primary  differences  between  the tax basis of net assets and the  amounts
recorded in the financial statements are the result of differences in accounting
for syndication costs and differences  between the depreciation  methods used in
the financial statements and the Company's tax returns.

The following  reconciles the net income reported in these financial  statements
to the loss reported on the Company's federal tax return (unaudited):

                                                   2000              1999
                                                   ----              ----
  Net (loss) income per financial statements     $ (2,305,631)        $ 438,835
  Adjustment to depreciation expense              (29,978,571)      (16,401,065)
  Adjustments to lease revenues                     3,265,841         2,343,563
                                             ----------------- -----------------
  Net loss per federal tax return               $ (29,018,361)    $ (13,618,667)
                                             ================= =================

Per unit data:

Net (loss) income and distributions per unit are based upon the weighted average
number of units outstanding during the period.








                                       17
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 2000


2.  Summary of significant accounting policies (continued):

Credit risk:

Financial instruments which potentially subject the Company to concentrations of
credit risk  include cash and cash  equivalents  and  accounts  receivable.  The
Company   places  its  cash  deposits  and  temporary  cash   investments   with
creditworthy,  high quality  financial  institutions.  The concentration of such
deposits and temporary  cash  investments  is not deemed to create a significant
risk to the Company.  Accounts receivable  represent amounts due from lessees in
various  industries,  related to  equipment on  operating  and direct  financing
leases.  See Note 8 for a description  of lessees by industry as of December 31,
2000 and 1999.

Use of estimates:

The preparation of financial  statements in conformity  with generally  accepted
accounting principles 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 from those  estimates.  Such  estimates  primarily
relate to the determination of residual values at the end of the lease term.

Reserve for losses and impairments:

The Company  maintains a reserve on its  investments in equipment and leases for
losses and  impairments  which are  inherent in the  portfolio as of the balance
sheet date. The Managing Member's evaluation of the adequacy of the allowance is
a judgmental  estimate that is based on a review of individual leases, past loss
experience and other factors.  While the Managing  Member believes the allowance
is adequate to cover known losses, it is reasonably  possible that the allowance
may change in the near term.  However,  such  change is not  expected  to have a
material  effect on the financial  position or future  operating  results of the
Company.  It is the Company's policy to charge off amounts which, in the opinion
of the Managing  Member,  are not recoverable from lessees or the disposition of
the collateral.

Recent Accounting Pronouncement:

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standards ("SFAS") No. 133,  Accounting for Derivative
Instruments  and  Hedging  Activities,  which  established  new  accounting  and
reporting standards for derivative instruments. SFAS No. 133 has been amended by
SFAS No. 137, issued in June 1999, and by SFAS No. 138, issued in June 2000.

SFAS No. 133, as amended,  requires the Company to recognize all  derivatives as
either assets or liabilities in the balance sheet and measure those  instruments
at fair value.  It further  provides  criteria for derivative  instruments to be
designated as fair value, cash flow, or foreign currency hedges, and establishes
accounting  standards for reporting  changes in the fair value of the derivative
instruments.  Upon  adoption,  the Company  will be  required to adjust  hedging
instruments  to fair value in the balance  sheet and  recognize  the  offsetting
gains  or  losses  as  adjustments  to  be  reported  in  net  income  or  other
comprehensive income, as appropriate.

The Company will adopt SFAS No. 133, as amended, on January 1, 2001. The Company
enters into interest rate swaps (see Note 5). The Managing  Member believes that
the adoption of SFAS No. 133,  will not have a material  effect on the Company's
results of operations or financial position.



                                       18
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 2000


3.  Investments in equipment and leases:

The Company's investments in equipment and leases consist of the following:

<TABLE>
<CAPTION>
                                                                                  Depreciation
                                                                                   Expense or         Reclass-
                                               December 31,                       Amortization     ifications or     December 31,
                                                   1999           Additions        of Leases        Dispositions         2000
                                                   ----           ---------        ---------        ------------         ----
<S>                                             <C>                <C>             <C>                    <C>         <C>
Net investment in operating leases              $ 129,689,456      $66,010,813     $ (22,298,714)         $ (6,308)   $ 173,395,247
Net investment in direct financing leases           9,040,460        9,367,277        (2,154,474)                -       16,253,263
Initial direct costs, net of accumulated
   amortization of $354,638 in 2000 and
   $65,075 in 1999                                    690,292          844,058          (289,562)                -        1,244,788
                                              ---------------- ---------------- ----------------- ----------------- ----------------
                                                $ 139,420,208      $76,222,148     $ (24,742,750)         $ (6,308)   $ 190,893,298
                                              ================ ================ ================= ================= ================
</TABLE>

Operating leases:

Property on operating leases consists of the following:

<TABLE>
<CAPTION>
                                                                    Reclass-
                               December 31,                      ifications or      December 31,
                                   1999           Additions       Dispositions          2000
                                   ----           ---------       ------------          ----
<S>                             <C>              <C>             <C>               <C>
Manufacturing                  $   21,949,691      $26,077,588                     $    48,027,279
Transportation, rail               38,224,944        1,409,554                          39,634,498
Aircraft                           24,411,837        7,203,037                          31,614,874
Transportation, other              10,247,265       13,336,207                          23,583,472
Containers                         21,228,750                -                          21,228,750
Natural gas compressors             7,863,922        6,181,212                          14,045,134
Materials handling                  2,086,090        3,771,991                           5,858,081
Marine vessel                       3,952,500          361,531                           4,314,031
Other                               5,051,922        7,669,693          $ (9,652)       12,711,963
                              ---------------- ---------------- ----------------- -----------------
                                  135,016,921       66,010,813            (9,652)      201,018,082
Less accumulated depreciation      (5,327,465)     (22,298,714)            3,344       (27,622,835)
                              ---------------- ---------------- ----------------- -----------------
                                $ 129,689,456    $  43,712,099   $        (6,308)  $   173,395,247
                              ================ ================ ================= =================
</TABLE>

Direct financing leases:

As of December 31, 2000 and 1999, investment in direct financing leases consists
of anhydrous ammonia storage tanks, office automation  equipment,  point of sale
equipment,  refrigerated trailers and laundry equipment. The following lists the
components of the Company's investment in direct financing leases as of December
31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                                  2000              1999
                                                                  ----              ----
<S>                                                          <C>               <C>
Total minimum lease payments receivable                      $    15,045,821   $     9,500,631
Estimated residual values of leased equipment (unguaranteed)       4,810,693         1,247,559
                                                            ----------------- -----------------
Investment in direct financing leases                             19,856,514        10,748,190
Less unearned income                                              (3,603,251)       (1,707,730)
                                                            ----------------- -----------------
Net investment in direct financing leases                    $    16,253,263   $     9,040,460
                                                            ================= =================
</TABLE>

All of the  property  on leases  was  acquired  in 2000 and 1999.  There were no
significant dispositions of such property.



                                       19
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 2000


3.  Investments in equipment and leases (continued):

At December 31, 2000, the aggregate amounts of future minimum lease payments are
as follows:

                                              Direct
           Year ending     Operating        Financing
          December 31,      Leases            Leases            Total
          ------------      ------            ------            -----
                  2001    $  31,944,886    $    3,543,814   $    35,488,700
                  2002       29,997,219         3,021,377        33,018,596
                  2003       24,191,024         2,714,320        26,905,344
                  2004       14,894,640         1,903,003        16,797,643
                  2005       10,544,506         1,866,689        12,411,195
            Thereafter       15,583,110         1,996,618        17,579,728
                        ---------------- ----------------- -----------------
                           $127,155,385    $   15,045,821   $   142,201,206
                        ================ ================= =================

At December 31, 2000,  there were  commitments to purchase lease assets totaling
approximately $45,940,000.


4.  Non-recourse debt:

At December 31, 2000,  non-recourse  debt consists of notes payable to financial
institutions.  The notes are due in varying quarterly and semi-annual  payments.
Interest on the notes is at rates from 7.98% to 14.0%.  The notes are secured by
assignments of lease  payments and pledges of assets.  At December 31, 2000, the
carrying value of the pledged assets is $31,788,949.  The notes mature from 2001
through 2004.

Future minimum payments of non-recourse debt are as follows:

         Year ending
          December 31,      Principal        Interest           Total
                  2001       $ 1,310,780        $ 616,563       $ 1,927,343
                  2002           312,109          515,608           827,717
                  2003           397,915          483,617           881,532
                  2004         4,425,556          170,437         4,595,993
                  2005           418,256           77,737           495,993
            Thereafter           461,128           34,866           495,994
                         ---------------- ---------------- -----------------
                             $ 7,325,744      $ 1,898,828       $ 9,224,572
                         ================ ================ =================







                                       20
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 2000


5.  Other long-term debt:

In 1999, the Company entered into a $70 million receivables funding program (the
Program) (which was  subsequently  increased to $125 million) with a receivables
financing  company that issues  commercial  paper rated A1 by Standard and Poors
and  P1 by  Moody's  Investor  Services.  Under  the  Program,  the  receivables
financing  company  receives  a  general  lien  against  all  of  the  otherwise
unencumbered  assets of the Company.  The Program  provides  for  borrowing at a
variable interest rate (6.7527% at December 31, 2000).

The Program  requires the Managing  Member to enter into various  interest  rate
swaps with a financial  institution  (also rated A1/P1) to manage  interest rate
exposure  associated  with  variable  rate  obligations  under  the  Program  by
effectively converting the variable rate debt to fixed rates. As of December 31,
2000,  the  Company  receives  or  pays  interest  on a  notional  principal  of
$86,668,000, based on the difference between nominal rates ranging from 6.84% to
7.50% and the variable rate under the Program. No actual borrowing or lending is
involved.  The last of the swaps terminates in 2008. The differential to be paid
or received is accrued as interest  rates change and is recognized  currently as
an adjustment to interest expense related to the debt.

 Borrowings under the Program are as follows:
                                                               Variable Interest
                    Original          Balance        Rate on         Rate at
                     Amount        December 31,   Interest Swap    December 31,
 Date Borrowed      Borrowed           2000         Agreement          2000
 -------------      --------           ----         ---------          ----
  11/11/1999        $ 20,000,000      $15,066,000     6.84%          6.7527%
  12/21/1999          20,000,000       18,378,000     7.41%          6.7527%
  12/24/1999          25,000,000       20,490,000     7.44%          6.7527%
  4/17/2000            6,500,000        5,882,000     7.45%          6.7527%
  4/28/2000            1,900,000        1,610,000     7.72%          6.7527%
   8/3/2000           19,000,000       17,958,000     7.50%          6.7527%
  10/31/2000           7,500,000        7,284,000     7.13%          6.7527%
                 ---------------- ----------------
                    $ 99,900,000      $86,668,000
                 ================ ================

Other  long-term debt borrowings  mature from 2004 through 2009.  Future minimum
principal payments of long-term debt are as follows:

    Year ending
    December 31,        Principal        Interest           Total
    ------------        ---------        --------           -----
              2001      $ 17,940,000      $ 5,757,526      $ 23,697,526
              2002        18,263,000        4,433,150        22,696,150
              2003        16,133,000        3,155,676        19,288,676
              2004        11,174,000        2,131,491        13,305,491
        Thereafter         8,537,000        1,425,790         9,962,790
        Thereafter        14,621,000        1,420,623        16,041,623
                     ---------------- ---------------- -----------------
                        $ 86,668,000      $18,324,256      $104,992,256
                     ================ ================ =================



                                       21
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 2000

6.  Related party transactions:

The terms of the Limited Company  Operating  Agreement provide that the Managing
Member  and/or  Affiliates  are entitled to receive  certain fees for  equipment
acquisition, management and resale and for management of the Company.

The Limited Liability  Company Operating  Agreement allows for the reimbursement
of costs incurred by the Managing Member in providing administrative services to
the  Company.  Administrative  services  provided  include  Company  accounting,
investor  relations,  legal counsel and lease and equipment  documentation.  The
Managing Member is not reimbursed for services where it is entitled to receive a
separate  fee as  compensation  for  such  services,  such  as  acquisition  and
management of equipment.  Reimbursable costs incurred by the Managing Member are
allocated to the Company based upon actual time incurred by employees working on
Company  business and an allocation of rent and other costs based on utilization
studies.

Substantially  all  employees of the  Managing  Member  record time  incurred in
performing administrative services on behalf of all of the Companies serviced by
the Managing Member.  The Managing Member believes that the costs reimbursed are
the lower of actual  costs  incurred  on behalf of the Company or the amount the
Company   would  be  required  to  pay   independent   parties  for   comparable
administrative  services in the same geographic location and are reimbursable in
accordance with the Limited Liability Company Operating Agreement.

The  Managing   Member   and/or   Affiliates   earned  fees,   commissions   and
reimbursements, pursuant to the Limited Liability Company Agreement as follows:

<TABLE>
<CAPTION>
                                                                                      2000             1999
                                                                                      ----             ----
<S>                                                                                  <C>              <C>
Selling commissions (equal to 9.5% of the selling price of the Limited Liability
   Company units, deducted from Other Members' capital)                              $ 5,534,569      $ 7,357,062
Reimbursement of other syndication costs to Managing Member                            2,619,534        3,734,924
Initial direct costs paid to Managing Member                                             844,058          753,607
Administrative costs reimbursed to Managing Member                                     1,408,523          767,386
Asset management fees to Managing Member                                               1,465,566          443,943
                                                                                ----------------- ----------------
                                                                                    $ 11,872,250     $ 13,056,922
                                                                                ================= ================
</TABLE>


7.  Members' capital:

As of December  31,  2000,  13,570,188  Units were issued and  outstanding.  The
Company is authorized  to issue up to 15,000,000  Units in addition to the Units
issued to the initial members (50 Units).

The  Company's Net Income,  Net Losses,  and  Distributions  are to be allocated
92.5% to the Members and 7.5% to ATEL.

An  additional  allocation of income has been made to the Managing  Member.  The
amount  allocated  was  determined so as to bring the Managing  Member's  ending
capital account balance to the amount of capital contributions that the Managing
Member will be required to make in a future period.



                                       22
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 2000


8.  Concentration of credit risk and major customers:

The Company leases  equipment to lessees in diversified  industries.  Leases are
subject to the Managing Member's credit committee review. The leases provide for
the return of the equipment upon default.

As of December 31, 2000 and 1999 there were concentrations (greater than 10%) of
equipment  leased to lessees in certain  industries  (as a  percentage  of total
equipment cost) as follows:

                                                      2000              1999
                                                      ----              ----
               Transportation, rail                    20%              27%
               Manufacturing, other                    15%              15%
               Transportation, air                     15%              17%
               Transportation, other                   13%               *
               Transportation, containers              10%              15%
               Manufacturing, electronics              10%               *

               * Less than 10%

During 2000, one customer  comprised 10% of the Company's  revenues from leases.
During 1999,  four  customers  comprised  31%, 12%, 12% and 10% of the Company's
revenues from leases.


9.  Line of credit:

The  Company  participates  with  ATEL  and  certain  of  its  Affiliates  in  a
$77,500,000  revolving credit  agreement with a group of financial  institutions
which expires on July 28, 2001. The agreement  includes an acquisition  facility
and a warehouse  facility which are used to provide bridge  financing for assets
on leases.  Draws on the  acquisition  facility by any  individual  borrower are
secured only by that borrower's assets,  including equipment and related leases.
Borrowings  on the  warehouse  facility are  recourse  jointly to certain of the
Affiliates, the Company and the Managing Member.

The Company borrowed $28,555,729 and $76,641,662 under the line of credit during
2000 and 1999,  respectively.  Repayments on the line of credit were $36,055,729
and  $69,141,662  during 2000 and 1999,  respectively.  At December 31, 2000, no
amounts remained outstanding.  Interest on the line of credit is based on either
the thirty day LIBOR rate or the bank's prime rate.

The credit agreement  includes certain  financial  covenants  applicable to each
borrower.  The Company was in  compliance  with its covenants as of December 31,
2000. At December 31, 2000, $39,969,040 was available under this agreement.



                                       23
<PAGE>

                      ATEL CAPITAL EQUIPMENT FUND VIII, LLC

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 2000


10.  Fair value of financial instruments:

The following  methods and  assumptions  were used to estimate the fair value of
each class of financial  instrument for which it is practicable to estimate that
value.

Cash and cash equivalents:

The carrying amount of cash and cash equivalents approximates fair value because
of the short-term maturity of these instruments.

Non-recourse debt:

The fair value of the Company's  non-recourse debt is estimated using discounted
cash flow analyses,  based on the Company's current incremental  borrowing rates
for similar types of borrowing  arrangements.  The  estimated  fair value of the
Company's non-recourse debt at December 31, 2000 is $7,301,244.

Other long-term debt:

The  fair  value  of the  Company's  other  long-term  debt is  estimated  using
discounted cash flow analyses, based on the Company's current variable borrowing
rate for the facility.  The estimated fair value of the other  long-term debt at
December 31, 2000 is $87,094,049.

Line of credit:

The carrying amounts of the Company's variable rate line of credit  approximates
fair value.

Interest rate swaps:

The fair value of interest rate swaps is estimated by discounting the fixed cash
flows paid under each swap using the rate at which the Company  could enter into
new swaps of similar maturities. The carrying amounts of the interest rate swaps
approximate fair value at December 31, 2000.




                                       24
<PAGE>

Item 9.  CHANGES IN AND DISAGREEMENTS WITH AUDITORS ON
           ACCOUNTING AND FINANCIAL DISCLOSURES

None


                                    PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS

The registrant is a Limited Liability Company and, therefore, has no officers or
directors.

All of the outstanding capital stock of ATEL Financial Corporation (the Managing
Member) is held by ATEL  Capital  Group  ("ACG"),  a holding  company  formed to
control ATEL and affiliated  companies.  The outstanding voting capital stock of
ATEL Capital Group is owned 75% by A. J. Batt and 25% by Dean Cash.

Each of ATEL Leasing Corporation  ("ALC"),  ATEL Equipment  Corporation ("AEC"),
ATEL  Investor  Services  ("AIS") and ATEL  Financial  Corporation  ("AFC") is a
wholly-owned  subsidiary  of ATEL Capital  Group and  performs  services for the
Company.  Acquisition  services are performed for the Company by ALC,  equipment
management, lease administration and asset disposition services are performed by
AEC,  investor  relations and  communications  services are performed by AIS and
general  administrative  services  for the Company are  performed  by AFC.  ATEL
Securities  Corporation  ("ASC") is a wholly-owned  subsidiary of ATEL Financial
Corporation.

The officers  and  directors of ATEL  Capital  Group and its  affiliates  are as
follows:

A. J. Batt                   Chairman of the Board of Directors of ACG, AFC,
                              ALC, AEC, AIS and ASC; President and Chief
                              Executive Officer of ACG, AFC and AEC

Dean L. Cash                 Director, Executive Vice President and Chief
                              Operating Officer of ACG, AFC, and AEC; Director,
                              President and Chief Executive Officer of ALC, AIS
                              and ASC

Paritosh K. Choksi           Director, Senior Vice President and Chief Financial
                              Officer of ACG, AFC, ALC, AEC and AIS

Donald E. Carpenter          Vice President and Controller of ACG, AFC, ALC, AEC
                              and AIS; Chief Financial Officer of ASC

Vasco H. Morais              Senior Vice President, Secretary and General
                              Counsel for ACG, AFC, ALC, AIS and AEC

A. J. Batt, age 64, founded ATEL in 1977 and has been its president and chairman
of the  board of  directors  since  its  inception.  From  1973 to 1977,  he was
employed by GATX  Leasing  Corporation  as  manager-data  processing  and equity
placement for the lease underwriting department, which was involved in equipment
financing  for  major  corporations.  From  1967 to 1973  Mr.  Batt was a senior
technical representative for General Electric Corporation, involved in sales and
support  services for computer  time-sharing  applications  for corporations and
financial  institutions.  Prior to that time, he was employed by North  American
Aviation as an  engineer  involved in the Apollo  project.  Mr. Batt  received a
B.Sc.  degree with honors in  mathematics  and physics  from the  University  of
British Columbia in 1961.



                                       25
<PAGE>

Dean L. Cash,  age 50, joined ATEL as director of marketing in 1980 and has been
a vice president since 1981,  executive vice president since 1983 and a director
since  1984.   Prior  to  joining  ATEL,   Mr.  Cash  was  a  senior   marketing
representative for Martin Marietta Corporation, data systems division, from 1979
to 1980.  From 1977 to 1979,  he was employed by General  Electric  Corporation,
where he was an applications  specialist in the medical  systems  division and a
marketing  representative in the information  services division.  Mr. Cash was a
systems  engineer  with  Electronic  Data  Systems  from  1975 to 1977,  and was
involved in maintaining and developing software for commercial applications. Mr.
Cash received a B.S.  degree in psychology and mathematics in 1972 and an M.B.A.
degree with a  concentration  in finance in 1975 from Florida State  University.
Mr. Cash is an arbitrator with the American Arbitration Association.

Paritosh K.  Choksi,  age 47,  joined  ATEL in 1999 as a  director,  senior vice
president and its chief financial officer. Prior to joining ATEL, Mr. Choksi was
chief  financial  officer at Wink  Communications,  Inc. from 1997 to 1999. From
1977 to 1997,  Mr. Choksi was with Phoenix  American  Incorporated,  a financial
services and  management  company,  where he held various  positions  during his
tenure, and was senior vice president, chief financial officer and director when
he left the company. Mr. Choksi was involved in all corporate matters at Phoenix
and was  responsible  for Phoenix's  capital market needs. He also served on the
credit  committee  overseeing all corporate  investments,  including its venture
lease  portfolio.  Mr. Choksi was a part of the executive  management team which
caused  Phoenix's  portfolio  to increase  from $50 million in assets to over $2
billion.  Mr.  Choksi  received a bachelor of  technology  degree in  mechanical
engineering  from the Indian  Institute  of  Technology,  Bombay;  and an M.B.A.
degree from the University of California, Berkeley.

Donald E. Carpenter, age 52, joined ATEL in 1986 as controller. Prior to joining
ATEL, Mr. Carpenter was an audit supervisor with Laventhol & Horwath,  certified
public accountants in San Francisco, California, from 1983 to 1986. From 1979 to
1983,  Mr.  Carpenter  was an  audit  senior  with  Deloitte,  Haskins  & Sells,
certified public accountants,  in San Jose,  California.  From 1971 to 1975, Mr.
Carpenter was a Supply Corp officer in the U. S. Navy. Mr. Carpenter  received a
B.S. degree in mathematics  (magna cum laude) from California State  University,
Fresno in 1971 and completed a second major in accounting in 1978. Mr. Carpenter
has been a California certified public accountant since 1981.

Vasco H. Morais, age 42, joined ATEL in 1989 as general counsel to provide legal
support in the  drafting  and  reviewing  of lease  documentation,  advising  on
general corporate law matters, and assisting on securities law issues. From 1986
to 1989,  Mr.  Morais was  employed  by the  BankAmeriLease  Companies,  Bank of
America's  equipment leasing  subsidiaries,  providing in-house legal support on
the  documentation  of  tax-oriented  and non-tax  oriented direct and leveraged
lease transactions, vendor leasing programs and general corporate matters. Prior
to the BankAmeriLease  Companies,  Mr. Morais was with the Consolidated  Capital
Companies in the corporate and securities legal department  involved in drafting
and reviewing  contracts,  advising on corporate law matters and  securities law
issues.  Mr.  Morais  received  a B.A.  degree  in 1982 from the  University  of
California in Berkeley,  a J.D.  degree in 1986 from Golden Gate  University Law
School and an M.B.A.  (Finance) in 1997 from Golden Gate University.  Mr. Morais
has been an active member of the State Bar of California since 1986.


Item 11.  EXECUTIVE COMPENSATION

The registrant is a Limited Liability Company and, therefore, has no officers or
directors.

Set forth hereinafter is a description of the nature of remuneration paid and to
be paid to ATEL and its Affiliates. The amount of such remuneration paid in 2000
and 1999 is set  forth in Item 8 of this  report  under the  caption  "Financial
Statements and Supplementary Data - Notes to the Financial  Statements - Related
party transactions," at Note 6 thereof, which information is hereby incorporated
by reference.



                                       26
<PAGE>

Selling Commissions

The Company paid selling commissions in the amount of 9.5% of Gross Proceeds, as
defined, to ATEL Securities Corporation, an affiliate of ATEL.

Through December 31, 2000, $12,891,631 of such commissions had been paid to ATEL
or  its  affiliates.  Of  that  amount,  $11,050,485  was  re-allowed  to  other
broker/dealers.

Asset Management Fee

The Company will pay ATEL an Asset  Management Fee in an amount equal to 4.5% of
Operating Revenues,  which will include Gross Lease Revenues and Cash From Sales
or Refinancing.  The Asset  Management Fee will be paid on a monthly basis.  The
amount of the Asset  Management Fee payable in any year will be reduced for that
year to the extent it would otherwise  exceed the Asset Management Fee Limit, as
described below. The Asset Management Fee will be paid for services  rendered by
ATEL and its  Affiliates  in  determining  portfolio and  investment  strategies
(i.e.,  establishing and maintaining the composition of the Equipment  portfolio
as a whole and the Company's  overall debt structure) and generally  managing or
supervising the management of the Equipment.

ATEL will supervise performance of among others activities,  collection of lease
revenues,  monitoring  compliance by lessees with the lease terms, assuring that
Equipment  is  being  used  in  accordance   with  all   operative   contractual
arrangements,  paying operating expenses and arranging for necessary maintenance
and  repair  of  Equipment  in the  event a lessee  fails  to do so,  monitoring
property,  sales and use tax compliance and  preparation of operating  financial
data.  ATEL  intends  to  delegate  all or a portion of its duties and the Asset
Management  Fee to one or more of its  Affiliates  who  are in the  business  of
providing such services.

Asset Management Fee Limit:

The Asset  Management Fee will be subject to the Asset Management Fee Limit. The
Asset  Management  Fee Limit will be  calculated  each year during the Company's
term by  calculating  the total fees that would be paid to ATEL if the  Managing
Member were to be compensated on the basis of an  alternative  fee schedule,  to
include an Equipment  Management  Fee,  Incentive  Management Fee, and Equipment
Resale/Re-Leasing  Fee, plus ATEL's Carried Interest, as described below. To the
extent that the amount paid to ATEL as the Asset Management Fee plus its Carried
Interest for any year would exceed the aggregate amount of fees calculated under
this  alternative  fee schedule for the year,  the Asset  Management  Fee and/or
Carried  Interest  for that year will be reduced to equal the maximum  aggregate
fees under the alternative fee schedule.

To the extent any such fees are reduced,  the amount of such  reduction  will be
accrued and deferred,  and such accrued and deferred  compensation would be paid
to ATEL in a subsequent period, but only if and to the extent that such deferred
compensation  would be  payable  within the Asset  Management  Fee Limit for the
subsequent  period.  Any deferred fees which cannot be paid under the applicable
limitations  in any subsequent  period through the date of liquidation  would be
forfeited by ATEL upon liquidation.

Alternative Fee Schedule:

For purposes of the Asset  Management  Fee Limit,  the Company will calculate an
alternative schedule of fees, including a hypothetical Equipment Management Fee,
Incentive Management Fee, Equipment Resale/Re- Leasing Fee, and Carried Interest
as follows:

An Equipment  Management  Fee will be calculated to equal the lesser of (i) 3.5%
of annual Gross Revenues from  Operating  Leases and 2% of annual Gross Revenues
from Full Payout  Leases which contain Net Lease  Provisions),  or (ii) the fees
customarily  charged by others  rendering  similar services as an ongoing public
activity in the same geographic location and for similar types of equipment.  If
services with respect to certain Operating Leases are performed by nonaffiliated
persons under the active  supervision of ATEL or its Affiliate,  then the amount
so calculated shall be 1% of Gross Revenues from such Operating Leases.



                                       27
<PAGE>

An Incentive  Management Fee will be calculated to equal 4% of  Distributions of
Cash from  Operations  until  Holders have  received a return of their  Original
Invested Capital plus a Priority Distribution, and, thereafter, to equal a total
of 7.5%  of  Distributions  from  all  sources,  including  Sale or  Refinancing
Proceeds.  In  subordinating  the increase in the Incentive  Management Fee to a
cumulative  return of a  Holder's  Original  Invested  Capital  plus a  Priority
Distribution,  a Holder  would  be  deemed  to have  received  Distributions  of
Original  Invested  Capital only to the extent that  Distributions to the Holder
exceed the amount of the Priority Distribution.

An Equipment  Resale/Re-Leasing Fee will be calculated in an amount equal to the
lesser of (i) 3% of the sale price of the Equipment, or (ii) one-half the normal
competitive equipment sale commission charged by unaffiliated parties for resale
services.  Such fee would apply only after the Holders have received a return of
their Original Invested Capital plus a Priority Distribution. In connection with
the  releasing  of  Equipment to lessees  other than  previous  lessees or their
Affiliates,  the fee  would  be in an  amount  equal  to the  lesser  of (i) the
competitive rate for comparable  services for similar  equipment,  or (ii) 2% of
the gross rental payments  derived from the re-lease of such Equipment,  payable
out of each rental payment received by the Company from such re-lease.

A Carried  Interest equal to 7.5% of all  Distributions  of Cash from Operations
and Cash from Sales or Refinancing.

See Note 6 to the financial statements included in Item 8 for amounts paid.

Managing Member's Interest in Operating Proceeds

Net income,  net loss and  investment  tax credits  are  allocated  92.5% to the
Members and 7.5% to ATEL. See financial statements included in Item 8, Part I of
this report for amounts allocated to the Managing Member in 2000 and 1999.


Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
            MANAGEMENT

Security Ownership of Certain Beneficial Owners

At December 31, 2000, no investor is known to hold  beneficially more than 5% of
the issued and outstanding Units.

Security Ownership of Management

The  shareholders  of ATEL are beneficial  owners of Limited  Liability  Company
Units as follows:

<TABLE>
<CAPTION>
            (1)                       (2)                               (3)                          (4)
                                      Name and Address of                Amount and Nature of      Percent
       Title of Class                   Beneficial Owner                 Beneficial Ownership     of Class
       --------------                   ----------------                 --------------------     --------

<S>                               <C>                             <C>                                  <C>
Limited Liability Company Units   A. J. Batt                          Initial Limited Liability        0.0002%
                                   235 Pine Street, 6th Floor      Company Units
                                    San Francisco, CA 94104       25 Units ($250)
                                                                   (owned by wife)

Limited Liability Company Units    Dean Cash                          Initial Limited Liability        0.0002%
                                   235 Pine Street, 6th Floor      Company Units
                                    San Francisco, CA 94104       25 Units ($250)
                                                                   (owned by wife)
</TABLE>



                                       28
<PAGE>

Changes in Control

The Members have the right,  by vote of the Members  owning more than 50% of the
outstanding Limited Liability Company Units, to remove a Managing Member.

ATEL may at any time  call a meeting  of the  Members  or a vote of the  Members
without a meeting, on matters on which they are entitled to vote, and shall call
such  meeting  or for vote  without a  meeting  following  receipt  of a written
request  therefore  of  Limited  Partners  holding  10% or  more  of  the  total
outstanding Limited Liability Company Units.


Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  responses  to Item 1 of this report  under the caption  "Equipment  Leasing
Activities," Item 8 of this report under the caption  "Financial  Statements and
Supplemental  Data  -  Notes  to  the  Financial   Statements  -  Related  party
transactions"  at Note 6 thereof,  and Item 11 of this report  under the caption
"Executive Compensation," are hereby incorporated by reference.


                                     PART IV

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

                         (a)Financial Statements and Schedules
                         1.  Financial Statements
                             Included in Part II of this report:

                             Report of Independent Auditors

                             Balance Sheets at December 31, 2000 and 1999

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

                             Statements of Changes in Members' Capital for the
                             period from July 31, 1998 (inception) through
                             December  31,  1998 and for the years ended
                             December 31, 2000 and 1999

                             Statements of Cash Flows for the period from July
                             31, 1998 (inception) through December  31,  1998
                             and  for the years ended December 31, 2000 and 1999

                             Notes to Financial Statements

                         2.  Financial Statement Schedules
                             All schedules for  which  provision  is made in the
                                applicable   accounting   regulations   of   the
                                Securities  and  Exchange   Commission  are  not
                                required under the related  instructions  or are
                                inapplicable and, therefore, have been omitted.

                         (b)Reports on Form 8-K for the fourth quarter of 2000
                             None

                         (c)Exhibits
                             (3)and (4) Agreement of Limited Liability  Company,
                                included   as  Exhibit  B  to   Prospectus,   is
                                incorporated  herein by  reference to the report
                                on Form 10K for the period  ended  December  31,
                                1998 (File Number 333-62477) (Exhibit 28.1)



                                       29
<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.



Date:  3/23/2001

                        ATEL Capital Equipment Fund VIII, LLC
                         (Registrant)


  By:  ATEL Financial Corporation,
       Managing Member of Registrant



                  By:   /s/  A. J. Batt
                        ---------------------------------------------------
                        A. J. Batt,
                        President and Chief Executive Officer of ATEL Financial
                        Corporation (Managing Member)





                  By:    /s/ Dean Cash
                        ---------------------------------------------------
                        Dean Cash,
                        Executive vice President of ATEL Financial Corporation
                        (Managing Member)








                                       30
<PAGE>

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


           SIGNATURE                     CAPACITIES                   DATE



/s/  A. J. Batt            President and Chief Executive Officer of 3/23/2001
-------------------------- ATEL Financial Corporation (Managing Member)
A. J. Batt







 /s/ Dean Cash             Executive Vice President of ATEL         3/23/2001
-------------------------- Financial Corporation (Managing Member)
Dean Cash




/s/ Paritosh K. Choksi     Principal financial officer of           3/23/2001
-------------------------- registrant; principal financial officer
Paritosh K. Choksi         and director of ATEL Financial
                           Corporation (Managing Member)





/s/ Donald E. Carpenter    Principal accounting officer of          3/23/2001
-------------------------- registrant; principal accounting officer
Donald E. Carpenter        of ATEL Financial Corporation (Managing
                           Member)






Supplemental  Information to be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to
Section 12 of the Act:


No proxy  materials  have been or will be sent to  security  holders.  An annual
report will be furnished to security  holders  subsequent  to the filing of this
report on Form 10-K, and copies thereof will be furnished  supplementally to the
Commission when forwarded to the security holders.

                                       31
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