<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                  QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000

                                   ----------

                       Commission file number: 33-49261-D

                        TRANSITION AUTO FINANCE II, INC.
        (EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)

          TEXAS                                         75-2753067
(State of incorporation)                 (I.R.S. employer identification number)

   8144 Walnut Hill Lane, SUITE 680,
             DALLAS, TEXAS                                 75231
(Address of principal executive offices)                 (Zip code)

                   Issuer's telephone number, including area code: (214)360-9966

Check 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 past 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 | | No |X|

State the number of shares outstanding of each of the issuer's classes of Common
equity, as of the latest practicable date: As September 30, 2000, the issuer'
had 1,000 shares of common stock

    TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMS (CHECK ONE): Yes | | No |X|

================================================================================
<PAGE>

                        TRANSITION AUTO FINANCE II, INC.

                                   FORM 10-QSB

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2000

<TABLE>
<CAPTION>
                                                                              Page No.
                                                                              --------
<S>                                                                           <C>
PART I.  FINANCIAL INFORMATION

    ITEM 1. Financial Statements

         Balance Sheets ...................................................      3
           September 30, 2000 (Unaudited) and December 31, 1999

         Statements of Income (Unaudited) .................................      5
           Quarter and nine months ended September 30, 2000 and
           September 30, 1999

         Statements of Cash Flows (Unaudited) .............................      6
           Nine Months ended September 30, 2000 and September 30, 1999

         Notes to d Financial Statements (Unaudited) ......................      7

    ITEM 2. Management's Discussion and Analysis of
            Financial Condition and Results of Operations .................     11

PART II. OTHER INFORMATION

    ITEM 1. Legal Proceedings .............................................     12

    ITEM 2. Changes in Securities and Use of Proceeds .....................     12

    ITEM 3. Defaults Upon Senior Securities ...............................     13

    ITEM 4. Submission of Matters to a Vote of Security Holders ...........     13

    ITEM 5. Other Information .............................................     13

    ITEM 6. Exhibits and Reports on Form 8-K ..............................     13

    Signatures ............................................................     14
</TABLE>

      In the opinion of management, all adjustments necessary to fair statement
of the results for interim periods presented have been reflected in these
financial statements.


                                       2
<PAGE>

                          PART I. FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

                        TRANSITION AUTO FINANCE II, INC.

                                 BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>
                                                                      9 months ended         FYE
                                                                         9/30/2000        12/31/1999
                                                                        (unaudited)      (See Note 1)
                                                                        -----------      ------------
<S>                                                                   <C>                <C>
CURRENT ASSETS
  Cash and cash equivalents                                             $   418,219      $ 2,483,593
  Accounts receivable                                                       298,145          310,338
  Vehicles held for sale                                                    235,118          213,052
                                                                        -----------      -----------
      Total Current Assets                                                  951,482        3,006,983
                                                                        -----------      -----------

PROPERTY, at cost
  Vehicles leased                                                         9,227,365        6,988,584
  Less accumulated depreciation                                          (2,277,998)      (1,890,738)
                                                                        -----------      -----------
      Net Property                                                        6,949,367        5,097,846
                                                                        -----------      -----------

OTHER ASSETS
  Debt issuance costs, net of amortization of $570,220 and $335,651         548,427          766,116
                                                                        -----------      -----------

TOTAL ASSETS                                                            $ 8,449,276      $ 8,870,945
                                                                        ===========      ===========
</TABLE>


                                       3
<PAGE>

                        TRANSITION AUTO FINANCE II, INC.

                           BALANCE SHEETS (Continued)

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                                             9 Months Ended         FYE
                                                                9/30/2000        12/31/1999
CURRENT LIABILITIES                                            (Unaudited)      (See Note 1)
                                                               -----------      ------------
<S>                                                          <C>                <C>
  Accrued liabilities                                         $     51,108      $    519,702
  Current portion of deferred revenue                              473,480           309,216
                                                              ------------      ------------
        Total Current Liabilities                                  524,588           828,918
                                                              ------------      ------------

OTHER LIABILITIES
  Due to affiliate                                                 171,707           210,569
  Deferred revenue                                                 710,221           446,332
  Investor notes payable                                        10,000,000        10,000,000
                                                              ------------      ------------
      Total Other Liabilities                                   10,881,928        10,656,901
                                                              ------------      ------------

TOTAL LIABILITIES                                               11,406,516        11,485,819
                                                              ------------      ------------

SUBORDINATED DEBT TO AFFILIATE                                     371,330           371,330
                                                              ------------      ------------

STOCKHOLDERS' EQUITY (DEFICIT)
   Common stock, $.10 par value, 1,000 shares authorized,
      issued and outstanding                                           100               100
   Additional paid-in capital                                          900               900
   Retained earnings (deficit)                                  (3,329,570)       (2,987,204)
                                                              ------------      ------------
       Total Stockholders' Equity (Deficit)                     (3,328,570)       (2,986,204)
                                                              ------------      ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
   (DEFICIT)                                                  $  8,449,276      $  8,870,945
                                                              ============      ============
</TABLE>

      Note 1: The balance sheet at December 31, 1999, as presented, is derived
      from the audited financial statements at that date.


                                       4
<PAGE>

                        TRANSITION AUTO FINANCE II, INC.

                              STATEMENTS OF INCOME

                                   (Unaudited)

<TABLE>
<CAPTION>
                                     Quarter Ended       Nine Months Ended       Quarter Ended       Nine Months Ended
                                   September 30, 2000    September 30, 2000    September 30, 1999    September 30, 1999
                                   ------------------    ------------------    ------------------    ------------------
<S>                                <C>                   <C>                   <C>                   <C>
REVENUES
  Vehicle monthly lease payments            $ 626,862           $ 1,834,470             $ 361,355           $   803,885
  Amortization of down payments               158,098               417,414                68,847               109,649
                                            ---------           -----------             ---------           -----------
        Total Revenues                        784,960             2,251,884               430,202               913,534
                                            ---------           -----------             ---------           -----------

OPERATING EXPENSES

  Operating costs                             123,007               538,313               130,221               300,834
  General and administrative                    4,942                20,288                27,395                40,808
  Depreciation and amortization               438,995             1,235,177               508,318               970,022
  Impairment loss                                 -0-                   -0-                   -0-                   -0-
                                            ---------           -----------             ---------           -----------

        Total Operating Expenses              566,944             1,793,778               665,934             1,311,664
                                            ---------           -----------             ---------           -----------

Operating Income (Loss)                       218,016               458,106              (235,732)             (398,130)
                                            ---------           -----------             ---------           -----------

OTHER INCOME (EXPENSE)
Investment income                               2,116                29,632                82,239               108,442
Other income (expense)                              1                17,685                   -0-                   -0-
Interest expense                             (275,100)             (825,330)             (198,186)             (605,470)
Loss on sale of inventory                     (19,615)              (22,460)              (86,731)              (86,731)
                                            ---------           -----------             ---------           -----------

    Total Other Income (Expense)             (292,598)             (800,473)             (438,410)             (583,759)
                                            ---------           -----------             ---------           -----------

Provision for Federal Income                      -0-                   -0-                   -0-                   -0-
Taxes                                       ---------           -----------             ---------           -----------

Net Loss                                    $ (74,582)          $  (342,367)            $(438,410)          $  (981,889)
                                            =========           ===========             =========           ===========

Loss per share (basic and                   $   74.58           $    342.37             $  438.41           $    981.89
diluted)
</TABLE>


                                       5
<PAGE>

                        TRANSITION AUTO FINANCE II, INC.

                            STATEMENTS OF CASH FLOWS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                9 Months Ended        9 Months Ended
                                                              September 30, 2000    September 30, 1999
                                                              ------------------    ------------------
<S>                                                           <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss                                                             $  (342,367)          $  (981,889)
Adjustments to reconcile net income to net cash provided by
  operating activities:
     Depreciation and amortization                                     1,235,177               970,022
     Amortization of down payments                                      (417,414)             (109,649)
     Impairment loss                                                         -0-                   -0-
     Provision for allowance for doubtful accounts                           -0-                   -0-
     (Gain) loss on sale of property                                      22,460                86,731
Net changes in operating assets and liabilities:
     Accounts receivable                                                  12,193              (163,451)
     Accrued liabilities                                                (468,594)              117,522
     Deferred revenue                                                    845,567               477,397
                                                                     -----------           -----------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES                         887,022               396,683
                                                                     -----------           -----------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of fixed assets                                           (3,222,933)           (5,125,218)
   Cash proceeds from sale of property                                   326,199               151,351
                                                                     -----------           -----------
NET CASH (USED) BY INVESTING ACTIVITIES                               (2,896,734)           (4,973,867)
                                                                     -----------           -----------

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from issuance of common stock                                    -0-                   -0-
   Net advances (payments) to affiliates                                 (38,862)             (129,539)
   Debt issuance costs                                                   (16,800)             (552,824)
   Proceeds from notes payable                                               -0-             5,220,000
                                                                     -----------           -----------
NET CASH PROVIDED  BY FINANCING ACTIVITIES                               (55,662)            4,537,637
                                                                     -----------           -----------

NET INCREASE (DECREASE)  IN CASH                                      (2,065,374)              (39,547)

CASH AND CASH EQUIVALENTS, beginning of period                         2,483,593             3,227,839
                                                                     -----------           -----------

CASH AND CASH EQUIVALENTS, end of period                             $   418,219           $ 3,188,292
                                                                     ===========           ===========

CASH PAID DURING THE YEAR FOR
   Interest                                                          $   825,300           $   273,680
                                                                     ===========           ===========
   Income taxes                                                      $       -0-           $       -0-
                                                                     ===========           ===========
</TABLE>

NON-CASH INVESTING ACTIVITIES

Vehicles purchased during the nine months ended September 30, 2000 with a net
book value of $235,118 were reclassified from vehicles leased to vehicles held
for sale.

                                       6
<PAGE>

                        TRANSITION AUTO FINANCE II, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

                               SEPTEMBER 30, 2000

NOTE 1: BUSINESS ACTIVITY

        The Company was established to purchase motor vehicles and automobile
        lease contracts, collect and service automobile lease contracts and
        remarket motor vehicles upon termination of their leases. A summary of
        the significant accounting policies consistently applied in the
        preparation of the accompanying financial statements follows.
        Transition Leasing Management, Inc. (TLMI) owns 100% of the Company's
        common stock.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        CASH AND CASH EQUIVALENTS

            For purposes of the statement of cash flows, the Company considers
            all highly liquid investments with a maturity of three months or
            less when purchased to be cash equivalents.

            The Company maintains cash balances at financial institutions in
            Dallas, Texas. Accounts at the institutions are insured by the
            Federal Deposit Insurance Corporation up to $100,000. The Company
            has not experienced any losses in such accounts and believes it is
            not exposed to any significant credit risk on cash and cash
            equivalents.

         REVENUE

            The vehicles are leased to individuals under leases with terms
            ranging from thirty-six to forty-two months. The leases are
            considered to be operating leases. At the end of the lease period,
            the lessee may purchase the equipment at the contractual residual
            value plus any other outstanding items due. Monthly lease payments
            are recognized as revenue in the month that the payments are due.
            The vehicle leases require a down payment from the lessee at the
            inception of the lease.

            The down payments are initially recorded as deferred revenue and
            then recognized as income over the term of the leases on a
            straight-line basis.

          VEHICLES HELD FOR SALE

            Vehicles held for sale are leased vehicles in which the lease term
            has expired or that have been repossessed. Vehicles held for sale
            are valued at the lower of book value or market value. Generally
            these vehicles will be sold at auction by the Company.


                                       7
<PAGE>

                        TRANSITION AUTO FINANCE II, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

                               SEPTEMBER 30, 2000

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

        EQUIPMENT AND LEASED VEHICLES

            Equipment and leased vehicles are stated at cost less accumulated
            depreciation. Depreciation is provided in amounts sufficient to
            relate the cost of depreciable assets to operations over their
            estimated service lives using the straight-line-method. Leased
            vehicle depreciation is calculated over the term of the vehicle
            lease, using the cost of the vehicle less the estimated residual
            value of the vehicle at the end of the lease. Present leases have
            terms ranging from thirty-six to forty-two months.

            The Company adopted Financial Accounting Standards Board issued
            Statement No. 121, Accounting for the Impairment of Long-Lived
            Assets and for Long-Lived Assets to Be Disposed Of, which requires
            impairment losses to be recorded on long-lived assets used in
            operations when indicators of impairment are present. An impairment
            loss of $617,684 has been recorded in these financial statements for
            the year ended December 31, 1999.

        OTHER ASSETS

            Other assets include debt issuance costs incurred in connection with
            the Company's offering of securities filed with the Securities and
            Exchange Commission. These costs are being amortized, on a
            straight-line basis, over the term of the debt securities which
            mature on June 30, 2002.

         DEFERRED REVENUE

            Deferred revenue consists of down payments made by lessees at the
            inception of the lease. The down payments are amortized over the
            lease term. Lease terms range from thirty-six to forty-two months.

         FAIR VALUE OF FINANCIAL INSTRUMENTS

            Fair values of financial instruments are estimated to approximate
            the related book value, unless otherwise indicated, based on market
            information available to the Company.


                                       8
<PAGE>

                        TRANSITION AUTO FINANCE II, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

                               SEPTEMBER 30, 2000

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

        USE OF ESTIMATES

            In preparing the Company's financial statements, management is
            required to make estimates and assumptions that affect the reported
            amounts of assets and liabilities, the 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 these estimates.

        CONCENTRATION OF CREDIT RISK

            A majority of the lessees are residents of the Dallas/Fort Worth
            Metroplex. Vehicles are used as collateral for leases.

NOTE 3: INVESTOR NOTES PAYABLE

        The Company has issued fixed rate redeemable asset-backed notes
        (Investor Notes) as of December 1999 in the amount of $10,000,000.

        These Investor Notes were issued pursuant to a public offering on Form
        SB-2 under the Securities Act of 1933. The Investor Notes bear interest
        at the rate of 11%. Interest is payable monthly on the 15th day of each
        month.

        The Investor Notes were issued at various times during 1999 and 1998,
        however the maturity date for all of the Investor Notes is June 30,
        2002. The Investor Notes are collateralized by the following:

            1.    Automobile contracts for the leasing of new or late model
                  automobiles.
            2.    The leased vehicles.


                                       9
<PAGE>

                        TRANSITION AUTO FINANCE II, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

                               SEPTEMBER 30, 2000

NOTE 4: INCOME TAXES

        The Company is a corporation subject to federal and state income taxes.
        The Company and its parent intend to file a consolidated tax return.
        Each company in the consolidated group determines its taxable income or
        loss, on a separate company basis, and the consolidated tax liability is
        allocated to each company with taxable income in proportion to the total
        of the taxable income amounts.

        The Company has a deferred tax asset as of December 31, 1999 (primarily
        from net operating loss carryforward), which has been completely offset
        by recognition of a valuation allowance.

        The Company has a net operating loss (NOL) carryforward of approximately
        $1,450,000 for the year ended December 31, 1999. The Company's NOL
        carryforward expires between December 31, 2011 and December 31, 2019.

NOTE 5: RELATED PARTIES

        The Company has entered into a Servicing Agreement with TLMI. TLMI will
        be entitled to a servicing fee of $20 per month per contract and a
        payment of $150 per contract purchased. TLMI will receive, as a
        marketing fee, 57.5% of the down payment made by the customers with
        respect to contracts it originates. TLMI will receive from the Company a
        Releasing Fee of 57.5% of the down payment with respect to a new
        contract following repossession of a leased vehicle.

NOTE 6: SUBORDINATED DEBT TO AFFILIATE

        The Company assumed a liability of $371,330 due to TLMI. This debt is
        subordinated to all other Company liabilities and can not be repaid
        before any other creditors or investors.


                                       10
<PAGE>

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

      The following discussions and analysis relates to factors that have
affected the operating results of the Company for the quarter and the nine
months ended September 30, 2000. The d balance sheet at December 31, 1999, as
presented, is derived from the audited financial statements at that date.

General.

      As of December 31, 1999, the Company had sold $10,000,000 of its 11%
Redeemable Secured Notes.

Results of Operations: Three months ended September 30, 2000, compared to the
three- months ended September 30, 1999.

      For the three months ended September 30, 2000 the Company had received
monthly contract lease payments of $626,862 and amortization of down payments of
$158,098. For the same period in 1999, the Company had contract lease income of
$361,355, amortization of down payments of $68,847. The increase in total
revenues of $354,758 for the three month period ended September 30, 2000,
compared to the same period in 1999, was the cumulative effect of lease activity
since September 30, 1999.

      Operating costs including general and administrative expenses were
$127,949 for the third quarter of 2000 compared to $157,616 for the same period
in 1999. The decrease in operating costs for the third quarter of 2000 was
$29,667 which represented lower operating costs and marketing fees paid during
the period.

      Depreciation and amortization was $438,995 for the three months ended
September 30, 2000, compared to $508,318 for the same period in 1999.

      Interest expense for the three months ended September 30, 2000, was
$275,100 compared to $ 198,186 for the same period in 1999. The increase in
interest expense for the third quarter of 2000 was due to a larger number of
notes outstanding than in 1999.

      Loss on sale of inventory for the third quarter of 2000 was $19,615
compared to a loss of $86,731 for the same period in 1999. The smaller loss on
inventory for 2000 reflects fewer repossessions than in the 1999 period. Loss on
sale of inventory occurs when the book value of the asset exceeds the market
value of the repossessed vehicle.

      The net loss for the third quarter ended September 30, 2000 was $ 74,582
compared to a loss of $ 438,410 for the same period in 1999. The lower loss for
the 2000 period reflects a higher number of new lease added and the marketing
fees paid on those leases.

Results of Operations: Nine- month period ended September 30, 2000 compared to
nine months ended September 30, 1999

      Total revenue for the nine months ended September 30, 2000 was $2,251,884
compared to $913,534 for the same period in 1999. The increase for the 2000
period represented a full years leasing activity for the Company.

      Operating costs and general and administrative expenses were $558,601 for
the nine month period ended September 30, 2000 compared to $341,642 for the same
period in 1999. The increase of $216,959 for the 2000 period was due to higher
marketing fees paid due to a higher level of lease activity than for the same
period in 1999.

      Depreciation and amortization for the nine months ended September 30, 2000
was $ 1,235,177 compared to $970,022 for the same period in 1999. The increase
in the 2000 period represents the additional lease activity during the nine
months ended September 30, 2000. .

      Interest expense for the nine months ended September 30, 2000 was $825,330
compared to $ 605, 470 for the same period in 1999. The increase in interest
expense for the nine months ended September 30, 2000 was due to the increase in
notes outstanding for that period.


                                       11
<PAGE>

      Loss on sale of inventory for the nine months ended September 30, 2000
was$22,460 compared to $86,731 for the same period in 1999. The loss on sale of
inventory was less in the 2000 period due to fewer repossessions than in the
1999 period.

      The Company had a loss of $342,367 for the nine months ended September 30,
2000 compared to a loss of $981,889 for the same period in 1999. The reduced
loss for the 2000 period was due to an increase in revenue of $1,338,350 over
the same period in 1999.

Liquidity and Capital Resources

      As of September 30, 2000, the Company used cash of $2,896,734 in its
investing activities and used $55,662 in its financing activities. For the
same period in 1999, the Company utilized cash of $4,973,867 in its investing
activities and received $4,537,637 in its financing activities.

      The Company's only source of liquidity in the future will be from its
monthly lease payments after interest and other allowed expenses.

      The Company's portfolio, which consisted of 504 leases, included 80 leases
which resulted in early terminations. The information on the Company's
experience with respect to early terminations is set forth below:

<TABLE>
<CAPTION>
                                                                    Vehicle                                      Total
                # of     Gross Cost    Misc.     Total    Down        Sale     Sales Tax  Warranty  Marketing    Amount     Profit
              Contracts  Of Vehicle  Expenses  Payments  Payment     Amount     Credit     Rebate   Fee Paid    Received    (Loss)
<S>           <C>        <C>         <C>       <C>       <C>       <C>         <C>        <C>       <C>        <C>         <C>
Repossession      36     $  694,628   $14,226  $308,284  $120,192  $  346,969   $20,484    $ 7,567  $ 65,316   $  738,180  $ 29,325
Early Payoff      44     $  983,532   $   457  $405,283  $188,365  $  729,124   $43,169    $ 8,050  $108,417   $1,265,573  $281,584
                  --     ----------   -------  --------  --------  ----------   -------    -------  --------   ----------  --------
Total             80     $1,678,160   $14,683  $713,567  $308,557  $1,076,093   $63,653    $15,617  $173,733   $2,003,753  $310,909
</TABLE>

Note: The above results on early termination does not include any allowance for
interest expense

      This report contains various forward looking statements and information
that are based on management's belief as well as assumptions made by and
information currently available to management. Although the Company believes
that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to have
been correct. Such statements are subject to certain risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary
materially from those expected. Among the key factors that may have a direct
bearing on the Company's operating results are fluctuations in the economy and
in the level of activity in the automobile and consumer finance industry, demand
for the Company's products, the impact of competition and interest rate
fluctuations.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      The Company is not a party to any material legal proceedings, and no
material legal proceedings have been threatened by or, to the best of the
Company's knowledge, instituted against the Company.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

      (a) Not Applicable
      (b) Not Applicable
      (c) Not Applicable
      (d) The company applied 90% of the gross proceeds from the sale of the
          Notes to the purchase or


                                       12
<PAGE>

            acquisition of the Leased Vehicles and the contracts. The Company
            paid to the Underwriter sales commissions of 6% of the principal
            amount of the Notes sold by the Underwriter. Additionally, the
            Company reimbursed the Underwriter for certain expenses incurred in
            connection with its due diligence activities with regard to the
            Offering of 2.5% of the aggregate principal amount of the Notes
            sold. The Company also used 1.5% of the gross proceeds from the sale
            of the Notes to pay offering and organizational expenses, including
            filing and registration fees, legal fees of the Company's counsel,
            accounting fees, trustee's fees, escrow agent's fees, "blue sky"
            expenses and printing expenses.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None

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

      No matters were submitted to a vote of the Company's sole stockholder
during the third quarter of 2000.

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)   Financial Statements

      The following financial statements are filed as a part of this Form
      10-KSB:

            The Index to Financial Statements is set out in Item 7 herein.

      Exhibits

      The following exhibits are filed as exhibits to this report on Form
      10-KSB:

            The information required is set forth in the Index to Exhibits
            accompanying this Form 10-QSB.

(b)   Reports on Form 8-K

      No reports on Form 8-K were filed during the nine months ended September
      30, 2000


                                       13
<PAGE>

                                   SIGNATURES

      In accordance with section 13 or 15(d) of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                            TRANSITION AUTO FINANCE II, INC.
                                        ----------------------------------------
                                                     (Registrant)


Date: March 19, 2002                             /s/ KENNETH C. LOWE
      --------------------              ----------------------------------------
                                              Kenneth C. Lowe, President/
                                              Chief Executive Officer


Date: March 19, 2002                             /s/ KENNETH C. LOWE
      --------------------              ----------------------------------------
                                              Kenneth C. Lowe, President/
                                              Chief Operating Officer


Date: March 19, 2002                             /s/ KENNETH C. LOWE
      --------------------              ----------------------------------------
                                              Kenneth C. Lowe, President/
                                              Chief Financial Officer


                                       14
<PAGE>

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                 DESCRIPTION
<S>         <C>
3.1         Articles of Incorporation of Transition Auto Finance II, Inc. *

3.2         Bylaws of Transition Auto Finance II, Inc. *

4.1         Form of Indenture between Transition Auto Finance II, Inc. and Trust
            Management, Inc., as Trustee ***

4.2         Form of Secured Note Due June 30, 2002 (included in Article Two of
            Indenture filed as Exhibit 4.1)

10.1        Form of Master Contract Purchase Agreement between Transition Auto
            Finance II, Inc. and Transition Leasing Management, Inc.**

10.2        Form of Servicing Agreement between Transition Leasing Management,
            Inc. and Transition Auto Finance II, Inc. **

</TABLE>

*     Incorporated by reference from Registration Statement on Form SB-2 of
      Transition Auto Finance II, Inc. Registration No. 33-49261-D, filed April
      2, 1998.

**    Incorporated by reference from Amendment No. 1 to Registration Statement
      on Form SB-2 of Transition Auto Finance II, Inc., Registration No.
      33-49261-D, filed June 19, 1998.

***   Incorporated by reference from Amendment No. 2 to Registration Statement
      on Form SB-2 of Transition Auto Finance II, Inc., Registration No.
      33-49261-D, filed July 9, 1998.



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