UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, DC.  20549
                                   
                               FORM 10-Q
                                   
(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended            September 30, 1998
                               ---------------------------------------  
                                  or

[   ]  TRANSITION  REPORT  PURSUANT TO SECTION  13  OR  15(d)  OF  THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________________ to _____________

Commission file number                  0-14934
                       -----------------------------------------------
                      DIVERSIFIED HISTORIC INVESTORS
----------------------------------------------------------------------
        (Exact name of registrant as specified in its charter)

       Pennsylvania                                      23-2312037
-------------------------------                    -------------------
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization                      Identification No.)

                1609 Walnut Street, Philadelphia, PA  19103
----------------------------------------------------------------------
  (Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code  (215) 557-9800

                                  N/A
-----------------------------------------------------------------------
 (Former name, former address and former fiscal year, if changed since
                             last report)

Indicate  by  check  mark whether the Registrant  (1)  has  filed  all
reports  required to be filed by Section 13 or 15(d) of the Securities
Exchange  Act  of  1934 during the preceding 12 months  (or  for  such
shorter period that the Registrant was required to file such reports),
and  (2) has been subject to such filing requirements for the past  90
days.                                      Yes    X        No
<PAGE>
                    PART I - FINANCIAL INFORMATION

Item 1.        Financial Statements.

             Consolidated Balance Sheets - September 30, 1998
             (unaudited) and December 31, 1997
             Consolidated Statements of Operations - Three Months and
             Nine Months Ended September 30, 1998 and 1997 (unaudited)
             Consolidated Statements of Cash Flows - Nine Months Ended
             September 30, 1998 and 1997 (unaudited)
             Notes to Consolidated Financial Statements (unaudited)

Item 2.        Management's Discussion and Analysis of
               Financial Condition and Results of Operations.

(1)    Liquidity

                     At  September 30, 1998, Registrant  had  cash  of
approximately  $12,146.   Cash  generated  from  operations  is   used
primarily  to fund operating expenses and debt service.  If cash  flow
proves  to  be insufficient, the Registrant will attempt to  negotiate
with   the  various  lenders  in  order  to  remain  current  on   all
obligations.  The Registrant is not aware of any additional sources of
liquidity.

                      As   of  September  30,  1998,  Registrant   had
restricted  cash  of $72,972 consisting primarily  of  funds  held  as
security deposits, replacement reserves and escrows for taxes.   As  a
consequence of these restrictions as to use, Registrant does not  deem
these funds to be a source of liquidity.

                     In  recent  years  the  Registrant  has  realized
significant losses, including the foreclosure of five properties and a
portion  of  a  sixth  property, due to the properties'  inability  to
generate sufficient cash flow to pay their operating expenses and debt
service.  The Registrant has first mortgages in place in each  of  its
remaining  three properties that are basically "cash-flow"  mortgages,
requiring all available cash after payment of operating expenses to be
paid to the first mortgage holder.  Therefore it is unlikely that  any
cash  will  be  available to the Registrant to  pay  its  general  and
administrative  expenses,  to  pay  debt  service  on   the   past-due
subordinate mortgage with respect to the Third Quarter or to  pay  any
debt  service  on  the two accrual mortgages with  respect  to  Wistar
Alley.

                     It  is the Registrant's intention to continue  to
hold  the  properties until they can no longer meet the  debt  service
requirements  (or with respect to the Third Quarter and Wistar  Alley,
the  lenders  on the past due subordinate mortgages seek payment)  and
the  properties are foreclosed, or the market value of the  properties
increases  to  a  point where they can be sold at  a  price  which  is
sufficient to repay the underlying indebtedness.

               (2)  Capital Resources

                     Due  to the relatively recent rehabilitations  of
the   properties,  any  capital  expenditures  needed  are   generally
replacement  items  and  are funded out of  cash  from  operations  or
replacement  reserves, if any.  The Registrant is  not  aware  of  any
factors  which would cause historical capital expenditures levels  not
to   be   indicative  of  capital  requirements  in  the  future   and
accordingly,  does  not believe that it will have to  commit  material
resources  to capital investment for the foreseeable future.   If  the
need  for  capital expenditures does arise, the first mortgage  holder
for  Third Quarter, Wistar Alley and Smythe Stores has agreed to  fund
capital expenditures at terms similar to the first mortgage.

               (3)  Results of Operations

                     During  the  third  quarter of  1998,  Registrant
incurred a net loss of $159,263 ($13.58 per limited partnership  unit)
compared  to  a  net loss of $181,338 ($15.46 per limited  partnership
unit) for the same period in 1997.  For the first nine months of 1998,
the  Registrant  incurred a net loss of $554,666 ($47.30  per  limited
partnership  unit)  compared to a net loss  of  $613,427  ($52.31  per
limited partnership unit) for the same period in 1997.

                     Rental income increased $16,546 from $108,786  in
the third quarter of 1997 to $125,332 in the same period in 1998.  The
increase  resulted from increases in rental income  at  Wistar  Alley,
Third  Quarter  and  Smythe  Stores due to increases  in  the  average
occupancy  and increases in the average rental rates at Third  Quarter
and Wistar Alley.

                     Rental income increased $44,654 from $317,323 for
the first nine months of 1997 to $361,977 for the same period in 1998.
The increase resulted from increases in rental income at Wistar Alley,
Third  Quarter  and  Smythe  Stores due to increases  in  the  average
occupancy and increases in the average rental rates.

                     Expense for rental operations decreased by $3,698
from  $53,916  in  the third quarter of 1997 to $50,218  in  the  same
period  in  1998.  The decrease in the loss from the third quarter  of
1997  to  the  same period in 1998 is due to a decrease in commissions
expense  at  Wistar Alley due to a lower turnover of  apartment  units
partially offset by an increase in maintenance expense due to a higher
turnover  of apartments units in 1998 at both Smythe Stores and  Third
Quarter.

                    Expense for rental operations decreased by $16,831
from  $230,545 for the first nine months of 1997 to $213,714  for  the
same  period in 1998.  The decrease in the expense from the first nine
months  of  1997 to the same period in 1998 is due to  a  decrease  in
condominium  fees  due  to  a  special  assessment  charged   by   the
condominium association in 1997 (which was not repeated in  1998)  for
capital improvements to the building at Smythe Stores partially offset
by  an  increase  in maintenance expense due to a higher  turnover  of
apartments units in 1998 at both Smythe Stores and Third Quarter.  The
decrease  was also the result of a decrease in commissions expense  at
Wistar Alley due to a lower turnover of apartment units.

                     Losses incurred during the third quarter  at  the
Registrant's properties amounted to $133,000, compared to  a  loss  of
approximately  $153,000 for the same period in 1997.   For  the  first
nine  months of 1998 the Registrant's properties incurred  a  loss  of
$476,000  compared to approximately $530,000 for the  same  period  in
1997.

                     In the third quarter of 1998, Registrant incurred
a  loss  of $84,000 at the Smythe Stores Condominium complex including
$18,000 of depreciation expense, compared to a loss of $84,000 in  the
third  quarter  of  1997, including $18,000 of  depreciation  expense.
Although  there  was  no overall change in the  loss  from  the  third
quarter  of 1997 to the same period in 1998, there was in an  increase
in  rental income due to an increase in the average occupancy (89%  to
97%)  partially offset by an increase in maintenance expense due to  a
higher turnover of apartments units in 1998.

                For the first nine months of 1998, Registrant incurred
a  loss of $270,000 at the Smythe Stores Condominium complex including
$55,000  of  depreciation expense, compared to a loss of $285,000  for
the  same  period in 1997, including $55,000 of depreciation  expense.
The decrease in the loss for the first nine months of 1997 to the same
periods in 1998 is the result of an increase in rental income  due  to
an  increase  in the average rental rates combined with a decrease  in
condominium  fees  partially  offset by  an  increase  in  maintenance
expense.   Condominium  fees decreased due  to  a  special  assessment
charged   by   the  condominium  association  in  1997   for   capital
improvements to the building and maintenance expense increased due  to
a  higher  turnover of apartments units in the first  nine  months  of
1998.

                     In the third quarter of 1998, Registrant incurred
a  loss  of $33,000 at Third Quarter Apartments, including $18,000  of
depreciation expense, compared to a loss of $39,000 including  $18,000
of depreciation expense in the third quarter of 1997 and for the first
nine months of 1998, Registrant incurred a loss of $126,000, including
$54,000  of  depreciation expense, compared to a loss of $130,000  for
the  same  period in 1997, including $54,000 of depreciation  expense.
The decrease in the loss for both the third quarter and the first nine
months  of  1997  to  the same periods in 1998 is  the  result  of  an
increase  in  rental  income  partially  offset  by  an  increase   in
maintenance  expense  due  to a higher turnover  of  apartment  units.
Rental  income  increased due to an increase in the average  occupancy
(82% to 92%) for the third quarter and (82% to 95%) for the first nine
months combined with an increase in the average rental rates.

                     In the third quarter of 1998, Registrant incurred
a  loss  of $16,000 at Wistar Alley, including $22,000 of depreciation
expense,   compared  to  a  loss  of  $30,000  including  $21,000   of
depreciation  expense in the third quarter of 1997 and for  the  first
nine  months of 1998, Registrant incurred a loss of $80,000, including
$66,000  of  depreciation expense, compared  to  a  loss  of  $115,000
including $64,000 of depreciation expense for the same period in 1997.
The decrease in the loss for both the third quarter and the first nine
months  of  1997  to  the same periods in 1998 is  the  result  of  an
increase  in rental income due to an increase in the average occupancy
(85% to 96%) for the third quarter and (87% to 95%) for the first nine
months  and  an increase in the average rental rates combined  with  a
decrease  in commissions expense due to a lower turnover of  apartment
units.
<PAGE>

                                   
                    DIVERSIFIED HISTORIC INVESTORS
                 (a Pennsylvania limited partnership)
                                   
                      CONSOLIDATED BALANCE SHEETS
                                   
                                Assets

                                       September 30, 1998     December 31, 1997
                                          (Unaudited)
Rental properties, at cost:                                           
Land                                      $  310,833               $  310,833
Buildings and improvements                 5,721,049                5,721,048
Furniture and fixtures                       128,329                  128,329
                                           ---------                ---------
                                           6,160,211                6,160,210
Less - Accumulated depreciation           (3,230,937)              (3,056,549)
                                           ---------                --------- 
                                           2,929,274                3,103,661
                                                                      
Cash and cash equivalents                     12,146                      710
Restricted cash                               72,972                   68,887
Accounts receivable                           15,907                   12,469
Other  assets  (net  of  amortization   of                            
$30,510 at September 30, 1998 and December                            
31, 1997)                                          0                        0
                                           ---------                --------- 
       Total                              $3,030,299               $3,185,727
                                           =========                =========

                   Liabilities and Partners' Equity

Liabilities:
Debt obligations                          $5,877,928               $5,877,215
Accounts payable:                                                     
       Trade                                 468,730                  373,122
       Related parties                       390,270                  362,739
Interest payable                           1,493,000                1,230,141
Tenant security deposits                      41,893                   37,948
Other liabilities                             11,119                    2,537
                                           ---------                ---------  
       Total liabilities                   8,282,940                7,883,702
                                           ---------                ---------  
Partners' equity                          (5,252,641)              (4,697,975)
                                           ---------                --------- 
       Total                              $3,030,299               $3,185,727
                                           =========                =========

The accompanying notes are an integral part of these financial statements.
<PAGE>
                    DIVERSIFIED HISTORIC INVESTORS
                 (a Pennsylvania limited partnership)
                                   
                 CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months and Nine Months Ended September 30, 1998 and 1997
                              (Unaudited)

                                    Three months              Nine months
                                  Ended September 30,      Ended September 30,
                                    1998        1997        1998        1997

Revenues:                      
   Rental income                  $125,332    $108,786    $361,977    $317,323
   Interest income                     220         182         924         414
                                   -------     -------     -------     -------
   Total revenues                  125,552     108,968     362,901     317,737
                                   -------     -------     -------     -------
Costs and expenses:                       
   Rental operations                50,218      53,916     213,714     230,545
   General and administrative       17,460      17,460      52,380      52,380
   Interest                        159,008     161,720     477,085     476,608
   Depreciation and                   
      Amortization                  58,129      57,210     174,388     171,631
                                   -------     -------     -------     -------
   Total costs and expenses        284,815     290,306     917,567     931,164
                                   -------     -------     -------     -------
Net loss                         ($159,263)  ($181,338)  ($554,666)  ($613,427)
                                   =======     =======     =======     =======
Net loss per limited                                                       
   partnership unit              ($  13.58)  ($  15.46)  ($  47.30)  ($  52.31)
                                   =======     =======     =======     ======= 

The accompanying notes are an integral part of these financial statements.
<PAGE>

                    DIVERSIFIED HISTORIC INVESTORS
                 (a Pennsylvania limited partnership)
                                   
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
         For the Nine Months Ended September 30, 1998 and 1997
                              (Unaudited)

                                                           Nine months ended
                                                             September 30,
                                                           1998         1997

Cash flows from operating activities:                                         
 Net loss                                              ($554,666)    ($613,427)
 Adjustments to reconcile net loss to net cash 
   provided by (used in) operating activities:                        
 Depreciation and amortization                           174,388       171,631
 Changes in assets and liabilities:                                           
 (Increase) decrease in restricted cash                   (4,085)       10,370
 (Increase) decrease in accounts receivable               (3,438)       45,842
 Increase in accounts payable - trade                     95,607        77,509
 Increase in accounts payable - related parties           27,531        29,821
 Increase in interest payable                            262,859       258,138
 Increase in accrued liabilities                           8,582           376
 Increase in tenant security deposits                      3,945         1,516
                                                         -------       ------- 
Net cash provided by (used in) operating activities       10,723       (18,224)
                                                         -------       ------- 
Cash flows from investing activities:                                         
 Capital expenditures                                          0       (18,030)
                                                         -------       ------- 
Net cash used in investing activities                          0       (18,030)
                                                         -------       ------- 
Cash flows from financing activities:                                         
 Proceeds from debt financing                                713        36,364
                                                         -------       ------- 
Net cash provided by financing activities                    713        36,364
                                                         -------       ------- 
Increase in cash and cash equivalents                     11,436           110
                                                                              
Cash and cash equivalents at beginning of period             710         4,017
                                                         -------       -------
Cash and cash equivalents at end of period              $ 12,146      $  4,127
                                                         =======       ======= 

The accompanying notes are an integral part of these financial statements.
<PAGE>
                                                                            
                    DIVERSIFIED HISTORIC INVESTORS
                 (a Pennsylvania limited partnership)

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              (Unaudited)


NOTE 1 - BASIS OF PRESENTATION

The   unaudited  consolidated  financial  statements  of   Diversified
Historic  Investors  (the "Registrant") and related  notes  have  been
prepared  pursuant to the rules and regulations of the Securities  and
Exchange  Commission.  Accordingly, certain information  and  footnote
disclosures  normally  included in financial  statements  prepared  in
accordance  with  generally accepted accounting principles  have  been
omitted  pursuant  to  such rules and regulations.   The  accompanying
consolidated financial statements and related notes should be read  in
conjunction  with the audited financial statements in  Form  10-K  and
notes thereto, in the Registrant's Annual Report on Form 10-K for  the
year ended December 31, 1997.

The  information furnished reflects, in the opinion of management, all
adjustments, consisting of normal recurring accruals, necessary for  a
fair presentation of the results of the interim periods presented.

                      PART II - OTHER INFORMATION

Item 1.             Legal Proceedings

                To  the best of its knowledge, Registrant is not party
to,  nor  is any of its property the subject of, any pending  material
legal proceedings.

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

                No matter was submitted during the quarter covered  by
this report to a vote of security holders.

Item 6.           Exhibits and Reports on Form 8-K

             (a)  Exhibit        Document
                  Number

                    3            Registrant's  Amended and Restated  Certificate
                                 of   Limited   Partnership  and  Agreement   of
                                 Limited  Partnership, previously filed as  part
                                 of    Amendment    No.   2   of    Registrant's
                                 Registration  Statement  on  Form   S-11,   are
                                 incorporated herein by reference.
                                                
                   21            Subsidiaries  of the Registrant are  listed  in
                                 Item  2.  Properties on Form  10-K,  previously
                                 filed and incorporated herein by reference.

             (b)   Reports on Form 8-K:

                   No  reports  were  filed  on  Form  8-K  during  the
                   quarter      ended     September      30,      1998.
<PAGE>                  
                                   
                              SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of
1934,  Registrant  has duly caused this report to  be  signed  on  its
behalf by the undersigned, thereunto duly authorized.

Date: November 30, 1998       DIVERSIFIED HISTORIC INVESTORS
      -----------------
                              By: Diversified Historic Advisors, General Partner
                                         
                                  By: EPK, Inc., Partner
                                          
                                      By:  /s/ Spencer Wertheimer
                                           -----------------------
                                           SPENCER WERTHEIMER
                                           President and Treasurer