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

                                   Form 10-QSB

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

                       For the quarterly period ended March 31, 2003


[ ] 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 0-14530


                        DAVIDSON INCOME REAL ESTATE, L.P.
             (Exact Name of Registrant as Specified in Its Charter)



         Delaware                                           62-1242144
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)

                          55 Beattie Place, PO Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)

                                 (864) 239-1000
                           (Issuer's telephone number)



                         PART I - FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS



                        DAVIDSON INCOME REAL ESTATE, L.P.

                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
                        (in thousands, except unit data)

                                 March 31, 2003

<TABLE>
<CAPTION>


Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $ 445
   Receivables and deposits                                                     610
   Restricted escrows                                                           185
   Other assets                                                                 176
   Investment properties:
       Land                                                  $ 3,523
       Buildings and related personal property                 17,760
                                                               21,283
       Less accumulated depreciation                          (11,804)        9,479
   Assets held for sale                                                       2,116
                                                                           $ 13,011
Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                          $ 126
   Tenant security deposit liabilities                                           66
   Accrued property taxes                                                       152
   Other liabilities                                                            166
   Due to affiliate                                                              72
   Deficit in joint venture                                                     797
   Mortgage notes payable                                                    10,757
   Liabilities related to assets held for sale                                1,837

Partners' Deficit
   General partners                                           $ (801)
   Limited partners (26,776 units issued and
      outstanding)                                               (161)         (962)
                                                                           $ 13,011

                See Accompanying Notes to Consolidated Financial Statements
</TABLE>

                        DAVIDSON INCOME REAL ESTATE, L.P.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                      (in thousands, except per unit data)

<TABLE>
<CAPTION>

                                                               Three Months Ended
                                                                    March 31,
                                                               2003          2002

                                                                          (Restated)
Revenues:
<S>                                                           <C>            <C>
   Rental income                                              $  848         $ 895
   Other income                                                   62            57
      Total revenues                                             910           952

Expenses:
   Operating                                                     358           350
   General and administrative                                     42            65
   Depreciation                                                  220           218
   Interest                                                      216           219
   Property taxes                                                 94           100
      Total expenses                                             930           952

Loss before equity in income (loss) of joint
   venture                                                       (20)           --
Equity in income (loss) of joint venture                           2           (39)
Loss from continuing operations                                  (18)          (39)
(Loss) gain from discontinued operations                        (106)           14
Net loss                                                      $ (124)       $ (25)

Net loss allocated to general partners (3%)                   $   (4)        $ (1)
Net loss allocated to limited partners (97%)                    (120)          (24)

                                                              $ (124)       $ (25)
Per limited partnership unit:
  Loss from continuing operations                             $(0.65)      $ (1.41)
  (Loss) gain from discontinued operations                     (3.84)         0.51
Net loss                                                      $(4.49)       $ (.90)


                See Accompanying Notes to Consolidated Financial Statements
</TABLE>


                        DAVIDSON INCOME REAL ESTATE, L.P.

                   CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
                                   (Unaudited)
                        (in thousands, except unit data)


<TABLE>
<CAPTION>

                                     Limited
                                   Partnership   General      Limited
                                      Units      Partners    Partners       Total

<S>                                   <C>          <C>        <C>         <C>
Original capital contributions        26,776       $ 1        $26,776     $ 26,777

Partners' deficit at
   December 31, 2002                  26,776      $ (797)     $ (41)       $ (838)


Net loss for the three months
   ended March 31, 2003                   --          (4)       (120)         (124)

Partners' deficit
   at March 31, 2003                  26,776      $ (801)     $ (161)      $ (962)


                See Accompanying Notes to Consolidated Financial Statements
</TABLE>

                        DAVIDSON INCOME REAL ESTATE, L.P.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                 Three Months Ended
                                                                     March 31,
                                                                   2003       2002

Cash flows from operating activities:
<S>                                                              <C>         <C>
  Net loss                                                       $ (124)     $ (25)
  Adjustments to reconcile net loss to net cash
   provided by operating activities:
   Depreciation                                                     280         274

   Amortization of discounts and loan costs                          18          16
   Equity in (income) loss of joint venture                         (2)          39
   Change in accounts:
      Receivables and deposits                                     (130)         83
      Other assets                                                  (3)         (108)
      Accounts payable                                               66          25

      Tenant security deposit liabilities                             7           1

      Accrued property taxes                                       (121)       (206)
      Other liabilities                                              49          79
       Net cash provided by operating activities                     40         178

Cash flows from investing activities:
  Property improvements and replacements                           (121)       (142)
  Net (deposits to) withdrawals from restricted escrows              (2)         41
       Net cash used in investing activities                       (123)        (101)

Cash flows from financing activities:
  Payments on mortgage notes payable                                (48)        (45)
       Net cash used in financing activities                        (48)        (45)

Net (decrease) increase in cash and cash equivalents               (131)         32

Cash and cash equivalents at beginning of period                    576         594
Cash and cash equivalents at end of period                       $ 445        $ 626

Supplemental disclosure of cash flow information and non-cash
transactions:
  Cash paid for interest                                         $ 242        $ 242

At March 31, 2003  receivables  and  deposits  included  approximately  $457,000
related to the  write-off of  investment  property and lost rents related to the
casualty event.

                See Accompanying Notes to Consolidated Financial Statements
</TABLE>

                        DAVIDSON INCOME REAL ESTATE, L.P.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Note A - Basis of Presentation

The accompanying  unaudited consolidated financial statements of Davidson Income
Real Estate,  L.P. (the  "Partnership"  or  "Registrant")  have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information  and  with the  instructions  to Form  10-QSB  and  Item  310(b)  of
Regulation  S-B.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements.  In the opinion of Davidson Diversified  Properties,  Inc.
(the  "Managing  General  Partner"),   all  adjustments  (consisting  of  normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included. Operating results for the three month period ended March 31, 2003, are
not  necessarily  indicative  of the results that may be expected for the fiscal
year  ending  December  31,  2003.  For  further   information,   refer  to  the
consolidated   financial  statements  and  footnotes  thereto  included  in  the
Partnership's  Annual  Report on Form 10-KSB for the fiscal year ended  December
31, 2002. The Managing  General Partner is a subsidiary of Apartment  Investment
and  Management  Company  ("AIMCO"),  a publicly  traded real estate  investment
trust.

Effective  January 1, 2002,  the  Partnership  adopted  Statement  of  Financial
Accounting  Standards  ("SFAS")  No.  144,  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets",  which  established  standards for the way that
public business  enterprises report information about long-lived assets that are
either  being held for sale or have  already  been  disposed of by sale or other
means.  The standard  requires that results of operations for a long-lived asset
that is being held for sale or has  already  been  disposed  of be  reported  as
discontinued  operations  on the  statement  of  operations.  As a  result,  the
accompanying  consolidated  statements  of  operations  have been restated as of
January 1, 2002 to reflect the  operations  of  Northsprings  Apartments as gain
from  discontinued  operations.  Northsprings  Apartments  was sold on April 15,
2003.

Note B - Transactions with Affiliated Parties

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  The Partnership Agreement provides for (i) payments to
affiliates for services and (ii)  reimbursement of certain expenses  incurred by
affiliates on behalf of the Partnership.

During  the three  months  ended  March 31,  2003 and  2002,  affiliates  of the
Managing  General Partner were entitled to receive 5% of gross receipts from all
of  the  Partnership's   properties  as  compensation  for  providing   property
management  services.  The  Partnership  paid to such  affiliates  approximately
$49,000  and  $64,000  for the  three  months  ended  March  31,  2003 and 2002,
respectively, which is included in operating expenses.

An  affiliate  of  the  Managing  General  Partner  received  reimbursements  of
accountable  administrative  expenses  amounting  to  approximately  $27,000 and
$48,000 for the three months ended March 31, 2003 and 2002, respectively,  which
is included in general and  administrative  expense and  investment  properties.
Included in these amounts are fees related to construction  management  services
provided by an affiliate of the Managing General Partner of approximately $1,000
and $6,000 for the three months ended March 31, 2003 and 2002, respectively. The
construction  management  service fees are based on a percentage of current year
additions to investment properties.

During the three months ended March 31, 2003 and 2002, the  Partnership  did not
receive or repay any advances to an affiliate of the Managing  General  Partner.
At March 31, 2003,  approximately  $72,000 in advances and accrued  interest was
due to an affiliate of the Managing General Partner, with interest being charged
at prime rate plus 2%, or 6.25%, in accordance  with the Partnership  Agreement.
During  the three  months  ended  March 31,  2003,  the  Partnership  recognized
interest expense of approximately  $1,000 relative to obligations to affiliates.
Subsequent to March 31, 2003, the obligation was repaid.

The  Partnership  insures its properties up to certain  limits through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the General
Partner. During 2003 and 2002, the Partnership's cost for insurance coverage and
fees  associated  with policy  claims  administration  provided by AIMCO and its
affiliates will be approximately $66,000 and $80,000, respectively.

Note C - Investment in Joint Venture

The  Partnership  owns a 17.5% interest in the Sterling Crest Joint Venture with
Davidson Growth Plus, L.P., an affiliate of the Managing General Partner,  which
owns the remaining 82.5% of the joint venture.

There were no  distributions  received from the joint  venture  during the three
months ended March 31, 2003 and 2002. For the three months ended March 31, 2003,
the Partnership recognized approximately $2,000 of equity in income of the joint
venture.  For the three months ended March 31, 2002, the Partnership  recognized
approximately $39,000 of equity in the loss of the joint venture,  which was net
of approximately $54,000 due to the loss incurred on the early extinguishment of
debt at the  joint  venture's  investment  property.  At  March  31,  2003,  the
Partnership  had  received  distributions  in excess of its general  partnership
interest and has an investment deficiency of approximately $797,000.

The  following  table  represents  net income  (loss) for the three months ended
March 31, 2003 and 2002 (in thousands):


                                                    Three Months Ended March 31,
                                                      2003                2002

Total revenues                                      $   606             $   651
Total expenses                                         (594)               (875)
Net income (loss)                                        12                (224)

Note D - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its General Partner and several of
their  affiliated  partnerships and corporate  entities.  The action purports to
assert  claims on behalf of a class of  limited  partners  and  derivatively  on
behalf of a number of limited partnerships (including the Partnership) which are
named as nominal defendants, challenging, among other things, the acquisition of
interests in certain General Partner entities by Insignia  Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia;  past
tender offers by the Insignia  affiliates to acquire limited  partnership units;
management of the  partnerships  by the Insignia  affiliates;  and the series of
transactions  which  closed on October 1, 1998 and  February  26,  1999  whereby
Insignia and Insignia  Properties Trust,  respectively,  were merged into AIMCO.
The plaintiffs seek monetary damages and equitable  relief,  including  judicial
dissolution of the  Partnership.  On June 25, 1998, the General  Partner filed a
motion seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs  filed an amended  complaint.  The General Partner filed demurrers to
the amended complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December  14,  1999,  the General  Partner  and its  affiliates  terminated  the
proposed settlement.  In February 2000, counsel for some of the named plaintiffs
filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated
the settlement.  On June 27, 2000, the Court entered an order disqualifying them
from the case and an appeal was taken  from the order on  October  5,  2000.  On
December 4, 2000, the Court  appointed the law firm of Lieff Cabraser  Heimann &
Bernstein  LLP as new  lead  counsel  for  plaintiffs  and the  putative  class.
Plaintiffs  filed a third  amended  complaint on January 19,  2001.  On March 2,
2001,  the  General  Partner  and its  affiliates  filed a demurrer to the third
amended  complaint.  On May 14, 2001,  the Court heard the demurrer to the third
amended  complaint.  On July 10,  2001,  the Court  issued  an order  sustaining
defendants'  demurrer on certain grounds.  On July 20, 2001,  Plaintiffs filed a
motion for  reconsideration  of the Court's July 10, 2001 order granting in part
and denying in part defendants' demurrer. On September 7, 2001, Plaintiffs filed
a fourth amended class and derivative action  complaint.  On September 12, 2001,
the Court denied Plaintiffs' motion for reconsideration. On October 5, 2001, the
General Partner and affiliated defendants filed a demurrer to the fourth amended
complaint,  which was heard on December 11, 2001. On February 2, 2002, the Court
served its order granting in part the demurrer.  The Court has dismissed without
leave  to amend  certain  of the  plaintiffs'  claims.  On  February  11,  2002,
plaintiffs  filed a motion seeking to certify a putative class  comprised of all
non-affiliated  persons  who own or have owned  units in the  partnerships.  The
General Partner and affiliated  defendants oppose the motion. On April 29, 2002,
the Court held a hearing on plaintiffs' motion for class  certification and took
the matter under submission after further briefing, as ordered by the court, was
submitted by the parties.  On July 10, 2002, the Court entered an order vacating
the trial date of  January  13,  2003 (as well as the  pre-trial  and  discovery
cut-off dates) and stayed the case in its entirety  through  November 7, 2002 so
that the parties could have an opportunity to discuss settlement. On October 30,
2002, the court entered an order  extending the stay in effect  through  January
10, 2003.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action  described below. On April
4, 2003, the Court preliminarily approved the settlement and scheduled a hearing
on final approval for June 2, 2003.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a Court  appointed
appraiser.  An affiliate of the General Partner has also agreed to make a tender
offer to purchase all of the partnership  interests in the  Partnerships  within
one year of final approval,  if it is granted,  and to provide partners with the
independent  appraisals at the time of these  tenders.  The proposed  settlement
also  provides  for the  limitation  of the  allowable  costs  which the General
Partner or its affiliates  will charge the  Partnerships in connection with this
litigation  and  imposes  limits  on the  class  counsel  fees and costs in this
litigation.  On April 11,  2003,  notice was  distributed  to  limited  partners
providing the details of the proposed settlement.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the General Partner and affiliated defendants
moved to strike the first  amended  complaint in its entirety for  violating the
Court's  July 10, 2001 order  granting  in part and denying in part  defendants'
demurrer in the Nuanes action, or  alternatively,  to strike certain portions of
the  complaint  based on the statute of  limitations.  Other  defendants  in the
action demurred to the fourth amended complaint,  and,  alternatively,  moved to
strike the  complaint.  On December  11, 2001,  the court heard  argument on the
motions and took the matters under  submission.  On February 4, 2002,  the Court
served  notice of its order  granting  defendants'  motion to strike  the Heller
complaint  as a violation  of its July 10, 2001 order in the Nuanes  action.  On
March 27, 2002, the plaintiffs  filed a notice  appealing the order striking the
complaint.  Before completing briefing on the appeal, the parties stayed further
proceedings  in the  appeal  pending  the  Court's  review  of the  terms of the
proposed settlement described above.

The  General  Partner  does not  anticipate  that any costs to the  Partnership,
whether legal or settlement costs,  associated with these cases will be material
to the Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.

Note E - Casualty Event

In December 2002, Bexley House Apartments  experienced a fire, causing damage to
32 units. As of March 31, 2003 the Partnership estimates the property damages to
be  approximately  $1,300,000 and lost rents to be  approximately  $300,000 as a
result of the fire.  Reconstruction  of the units is in  progress.  The expected
date for  completion of  reconstruction  is October 2003.  The Managing  General
Partner  expects  that the  damage  and lost  rents  will be  fully  covered  by
insurance proceeds during 2003. The Managing General Partner does not anticipate
a casualty loss.

Note F - Subsequent Event

On April 15, 2003, the Partnership sold Northsprings  Apartments to an unrelated
third party for approximately  $6,100,000.  Northsprings Apartments had revenues
of approximately $207,000 and $279,000 for the three months ended March 31, 2003
and 2002, respectively.  Northsprings Apartments had a net loss of approximately
$106,000  and net income of  approximately  $14,000 for the three  months  ended
March 31, 2003 and 2002,  respectively.  These  amounts  are  included in (loss)
income from  discontinued  operations  for the three months ended March 31, 2003
and 2002, respectively. The Partnership distributed approximately $99,000 to the
general partners and approximately  $3,195,000 to the limited partners from sale
proceeds in April 2003. The Partnership  anticipates  recognizing a gain on sale
from  discontinued  operations of  approximately  $3,605,000 and a loss on early
extinguishment  of debt of approximately  $24,000 which will be included in loss
from discontinued operations, during the second quarter of 2003.

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  The discussions of the  Registrant's
business  and  results  of  operations,   including  forward-looking  statements
pertaining to such matters,  do not take into account the effects of any changes
to the  Registrant's  business  and results of  operations.  Actual  results may
differ  materially  from those described in the  forward-looking  statements and
will  be  affected  by  a  variety  of  risks  and  factors  including,  without
limitation:  national and local economic  conditions;  the terms of governmental
regulations that affect the Registrant and interpretations of those regulations;
the competitive  environment in which the Registrant operates;  financing risks,
including the risk that cash flows from  operations may be  insufficient to meet
required  payments of  principal  and  interest;  real estate  risks,  including
variations  of real  estate  values and the  general  economic  climate in local
markets and competition for tenants in such markets; and possible  environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

The Partnership's investment properties consist of four apartment complexes. The
following table sets forth the average occupancy of the properties for the three
months ended March 31, 2003 and 2002:

                                                   Average Occupancy
      Property                                      2003       2002

      Northsprings Apartments                       87%        89%
         Atlanta, Georgia
      Lakeside Apartments                           88%        91%
         Charlotte, North Carolina (1)
      Bexley House Apartments                       49%        98%
         Columbus, Ohio (2)
      Covington Pointe Apartments                   95%        84%
         Dallas, Texas (3)

(1)      The Managing General Partner  attributes the decrease in occupancy to a
         decline in the market conditions in the Charlotte area.

(2)      The Managing  General  Partner  attributes the decrease in occupancy at
         Bexley House Apartments to a fire that destroyed  approximately half of
         the apartment units.

   (3)   The Managing  General  Partner  attributes the increase in occupancy at
         Covington Pointe Apartments to the lowering of rents to be in line with
         the competition in the Dallas area.

Results of Operations

The  Partnership's  net loss for the  three  months  ended  March  31,  2003 was
approximately  $124,000 as compared to a net loss of  approximately  $25,000 for
the three months ended March 31, 2002. On April 15, 2003, the  Partnership  sold
Northsprings   Apartments  to  an  unrelated  third  party,  for   approximately
$6,100,000.  A portion of the net proceeds  from the sale were used to repay the
mortgages  encumbering the investment  property and the Partnership  distributed
approximately  $99,000 to the general partners and  approximately  $3,195,000 to
the  limited  partners  in April  2003.  As a result  of this  transaction,  the
operations  of  Northsprings  Apartments  have  been  included  as  discontinued
operations  in the  accompanying  consolidated  statements  of  operations.  The
property's  operations,  net loss of  approximately  $106,000  and net income of
approximately  $14,000  for the three  months  ended  March  31,  2003 and 2002,
respectively,   including  revenues  of  approximately  $207,000  and  $279,000,
respectively, are included in (loss) gain from discontinued operations.

The  Partnership's  loss from  continuing  operations for the three months ended
March 31, 2003 was  approximately  $18,000 as  compared to loss from  continuing
operations of  approximately  $39,000 for the three months ended March 31, 2002.
The decrease in loss from  continuing  operations  is due to a decrease in total
expenses and an increase in equity in the income of the joint venture  partially
offset by a decrease in total revenues. The decrease in total revenues is due to
a decrease in rental  income  partially  offset by an increase in other  income.
Rental income  decreased  due to a decrease in occupancy at Lakeside  Apartments
and Bexley House Apartments, a decrease in the average rental rates at Covington
Pointe  Apartments  and Lakeside  Apartments  and an increase in  concessions at
Covington  Pointe  Apartments  partially  offset by an increase in  occupancy at
Covington Pointe Apartments.  Other income increased due to an increase in lease
cancellation  fees  at  Covington  Pointe  Apartments  and  Lakeside  Apartments
partially  offset by a decrease in interest  income as a result of lower average
cash balances maintained in Partnership cash accounts.

Total   expenses   decreased   primarily  due  to  a  decrease  in  general  and
administrative expenses. General and administrative expenses decreased primarily
due  to  a  decrease  in  the  cost  of  services  included  in  the  management
reimbursements  to the Managing General Partner as allowed under the Partnership
Agreement and to a decrease in  professional  fees. Also included in general and
administrative  expenses  are costs  associated  with the  quarterly  and annual
communications  with  investors  and  regulatory  agencies  and the annual audit
required by the Partnership Agreement.

The  Partnership  owns a 17.5%  interest in Sterling  Crest Joint  Venture  (the
"Joint  Venture").  For the three months ended March 31, 2003,  the  Partnership
recognized  equity in income of the joint  venture  of  approximately  $2,000 as
compared to equity in loss of the joint venture of approximately $39,000 for the
three  months  ended  March 31,  2002.  Equity  in  income of the joint  venture
increased  due  primarily  to a decrease  in total  expenses  offset by a slight
decrease in total revenues.

As part of the ongoing  business plan of the  Partnership,  the Managing General
Partner  monitors  the  rental  market  environment  of each  of its  investment
properties  to assess  the  feasibility  of  increasing  rents,  maintaining  or
increasing  occupancy  levels and protecting the  Partnership  from increases in
expenses. As part of this plan, the Managing General Partner attempts to protect
the Partnership  from the burden of  inflation-related  increases in expenses by
increasing rents and maintaining a high overall occupancy level. However, due to
changing market  conditions,  which can result in the use of rental  concessions
and  rental  reductions  to  offset  softening  market  conditions,  there is no
guarantee that the Managing General Partner will be able to sustain such a plan.

Liquidity and Capital Resources

At  March  31,  2003,  the  Partnership   had  cash  and  cash   equivalents  of
approximately $445,000 compared to approximately $626,000 at March 31, 2002. The
decrease in cash and cash  equivalents for the three months ended March 31, 2003
from the Partnership's year ended December 31, 2002, was approximately $131,000.
This  decrease  is due to  approximately  $123,000  of cash  used  in  investing
activities  and  approximately  $48,000 used in financing  activities  partially
offset by approximately $40,000 of cash provided by operating  activities.  Cash
used in investing activities consisted of property improvements and replacements
and net deposits to restricted escrows maintained by the mortgage lenders.  Cash
used in financing  activities  consisted  of payments of  principal  made on the
mortgages encumbering the Partnership's  investment properties.  The Partnership
invests its working capital reserves in interest bearing accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the investment  properties to adequately  maintain the
physical  assets and other operating needs of the Partnership and to comply with
Federal,  state,  and local  legal and  regulatory  requirements.  The  Managing
General  Partner  monitors  developments  in the  area of legal  and  regulatory
compliance and is studying new federal laws, including the Sarbanes-Oxley Act of
2002. The Sarbanes-Oxley Act of 2002 mandates or suggests additional  compliance
measures with regard to governance,  disclosure, audit and other areas. In light
of these changes,  the  Partnership  expects that it will incur higher  expenses
related  to  compliance,  including  increased  legal  and audit  fees.  Capital
improvements planned for the Partnership's properties are detailed below.

Northsprings Apartments

During  the  three  months  ended  March 31,  2003,  the  Partnership  completed
approximately  $27,000  of  capital  improvements  at  Northsprings  Apartments,
consisting primarily of plumbing  improvements and floor covering  replacements.
These  improvements  were  funded  from  operating  cash  flow  and  replacement
reserves. This property was sold to an unrelated third party in April 2003.

Lakeside Apartments

During  the  three  months  ended  March 31,  2003,  the  Partnership  completed
approximately $44,000 of capital improvements at Lakeside Apartments, consisting
primarily  of  floor  covering   replacements  and  plumbing   upgrades.   These
improvements  were funded  primarily from  operating  cash flow and  replacement
reserves.  The  Partnership  evaluates  the  capital  improvement  needs  of the
property  during  the year and  currently  expects  to  complete  an  additional
$286,000 in capital  improvements  during the remainder of 2003.  The additional
capital  improvements  will consist  primarily of floor  covering and  appliance
replacements,  structural  improvements  and HVAC upgrades.  Additional  capital
improvements may be considered and will depend on the physical  condition of the
property as well as the  anticipated  cash flow  generated  by the  property and
replacement reserves.

Bexley House Apartments

During  the  three  months  ended  March 31,  2003,  the  Partnership  completed
approximately  $37,000  of  capital  improvements  at Bexley  House,  consisting
primarily  of  HVAC,   plumbing   upgrades  and  appliance  and  floor  covering
replacements.  These  improvements  were funded from  operating  cash flow.  The
Partnership  is  reconstructing  this  property as a result of the fire casualty
discussed in "Note E" to the consolidated financial statements and expects these
costs to be fully covered by insurance proceeds during 2003.  Additional capital
improvements may be considered and will depend on the physical  condition of the
property as well as the anticipated cash flow generated by the property.

Covington Pointe Apartments

During  the  three  months  ended  March 31,  2003,  the  Partnership  completed
approximately  $13,000 of capital  improvements at Covington Pointe  Apartments,
consisting primarily of appliance and floor covering replacements and structural
improvements. These improvements were funded primarily from operating cash flow.
The Partnership  evaluates the capital  improvement needs of the property during
the year and  currently  expects to complete an  additional  $198,000 in capital
improvements  during the remainder of 2003. The additional capital  improvements
will consist  primarily of a new fitness  center,  floor  covering and appliance
replacements,  structural  improvements,  interior decoration and HVAC upgrades.
Additional  capital  improvements  may be  considered  and  will  depend  on the
physical  condition  of the  property  as  well  as the  anticipated  cash  flow
generated by the property and replacement reserves.

The additional  capital  expenditures will be incurred only if cash is available
from operations or from Partnership  reserves.  To the extent that such budgeted
capital improvements are completed,  the Partnership's  distributable cash flow,
if any, may be adversely affected at least in the short term.

The  Partnership's  assets are thought to be sufficient for any near-term  needs
(exclusive  of  capital   improvements)   of  the   Partnership.   The  mortgage
indebtedness of approximately  $12,535,000,  net of discounts, is amortized over
varying  periods,  with  approximately  $4,439,000 due at maturity for Covington
Pointe  Apartments  in  October  of 2003  and  approximately  $4,100,000  due in
November of 2003 for  Lakeside  Apartments.  The Managing  General  Partner will
attempt to refinance and/or sell the properties prior to such maturity dates. If
the  properties  cannot  be  refinanced  or sold for a  sufficient  amount,  the
Partnership may risk losing such properties through foreclosure.

The Partnership did not distribute any funds during the three months ended March
31, 2003 and 2002.  Subsequent to March 31, 2003,  the  Partnership  distributed
approximately  $99,000 to the general partners and  approximately  $3,195,000 to
the limited partners from the sale proceeds from  Northsprings  Apartments.  The
Partnership's  cash available for  distribution  is reviewed on a monthly basis.
Future cash  distributions  will depend on the levels of net cash generated from
operations,   the  availability  of  cash  reserves,  and  the  timing  of  debt
maturities,  refinancings  and/or  property  sales.  There can be no  assurance,
however,  that the Partnership  will generate  sufficient  funds from operations
after  required  capital  improvements  to permit further  distributions  to its
partners during the remainder of 2003 or subsequent  periods.  Distributions may
be restricted by the requirement to deposit net operating  income into a reserve
account until it is funded a minimum of $200 and a maximum of $400 per apartment
unit at Northsprings  Apartments and Covington Pointe  Apartments for a total of
approximately  $60,000 to  $120,000.  The reserve  account at March 31, 2003 was
approximately $110,000.

Other

In addition to its indirect  ownership of the general  partner  interests in the
Partnership,  AIMCO and its affiliates owned 11,916.50 limited partnership units
(the "Units") in the Partnership representing 44.50% of the outstanding Units at
March 31, 2003. A number of these Units were acquired  pursuant to tender offers
made by AIMCO or its  affiliates.  It is possible  that AIMCO or its  affiliates
will acquire additional units of limited partnership interest in the Partnership
in  exchange  for  cash or a  combination  of cash and  units  in the  operating
partnership of AIMCO either through  private  purchases or tender offers.  Under
the  Partnership  Agreement,  unitholders  holding a  majority  of the Units are
entitled to take action with respect to a variety of matters which would include
voting on certain  amendments to the Partnership  Agreement and voting to remove
the  Managing  General  Partner.  As a result of its  ownership of 44.50% of the
outstanding Units, AIMCO is in a position to influence all voting decisions with
respect to the Registrant.  Although the Managing General Partner owes fiduciary
duties to the limited partners of the Partnership,  the Managing General Partner
also owes fiduciary duties to AIMCO as its sole  stockholder.  As a result,  the
duties of the Managing  General Partner,  as managing  general  partner,  to the
Partnership  and its limited  partners may come into conflict with the duties of
the Managing General Partner to AIMCO, as it sole stockholder.

Critical Accounting Policies and Estimates

The consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the Partnership
to  make  estimates  and  assumptions.  The  Partnership  believes  that  of its
significant  accounting  policies,  the following may involve a higher degree of
judgment and complexity.

Impairment of Long-Lived Assets

Investment  properties  are  recorded at cost,  less  accumulated  depreciation,
unless  considered  impaired.  If  events  or  circumstances  indicate  that the
carrying  amount of a property may be  impaired,  the  Partnership  will make an
assessment of its  recoverability  by estimating  the  undiscounted  future cash
flows,  excluding  interest  charges,  of the property.  If the carrying  amount
exceeds the aggregate  future cash flows,  the  Partnership  would  recognize an
impairment  loss to the extent the carrying amount exceeds the fair value of the
property.

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's  investment  properties.  These  factors  include  changes  in the
national,  regional and local economic  climate;  local  conditions,  such as an
oversupply  of  multifamily   properties;   competition   from  other  available
multifamily  property  owners and changes in market  rental  rates.  Any adverse
changes in these factors could cause an impairment in the Partnership's assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
Rental income  attributable to leases is recognized  monthly as it is earned and
the Partnership  fully reserves all balances  outstanding  over thirty days. The
Partnership will offer rental concessions during  particularly slow months or in
response  to  heavy  competition  from  other  similar  complexes  in the  area.
Concessions are charged to income as incurred.

ITEM 3.     CONTROLS AND PROCEDURES

The principal  executive officer and principal financial officer of the Managing
General Partner, who are the equivalent of the Partnership's principal executive
officer and principal financial officer,  respectively,  have, within 90 days of
the filing date of this quarterly  report,  evaluated the  effectiveness  of the
Partnership's  disclosure  controls and  procedures  (as defined in Exchange Act
Rules 13a-14(c) and 15d-14(c)) and have determined that such disclosure controls
and  procedures  are  adequate.  There have been no  significant  changes in the
Partnership's  internal  controls or in other  factors that could  significantly
affect the  Partnership's  internal  controls since the date of evaluation.  The
Partnership does not believe any significant deficiencies or material weaknesses
exist in the Partnership's internal controls. Accordingly, no corrective actions
have been taken.

                           PART II - OTHER INFORMATION


ITEM 1.     LEGAL PROCEEDINGS


In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its General Partner and several of
their  affiliated  partnerships and corporate  entities.  The action purports to
assert  claims on behalf of a class of  limited  partners  and  derivatively  on
behalf of a number of limited partnerships (including the Partnership) which are
named as nominal defendants, challenging, among other things, the acquisition of
interests in certain General Partner entities by Insignia  Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia;  past
tender offers by the Insignia  affiliates to acquire limited  partnership units;
management of the  partnerships  by the Insignia  affiliates;  and the series of
transactions  which  closed on October 1, 1998 and  February  26,  1999  whereby
Insignia and Insignia  Properties Trust,  respectively,  were merged into AIMCO.
The plaintiffs seek monetary damages and equitable  relief,  including  judicial
dissolution of the  Partnership.  On June 25, 1998, the General  Partner filed a
motion seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs  filed an amended  complaint.  The General Partner filed demurrers to
the amended complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December  14,  1999,  the General  Partner  and its  affiliates  terminated  the
proposed settlement.  In February 2000, counsel for some of the named plaintiffs
filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated
the settlement.  On June 27, 2000, the Court entered an order disqualifying them
from the case and an appeal was taken  from the order on  October  5,  2000.  On
December 4, 2000, the Court  appointed the law firm of Lieff Cabraser  Heimann &
Bernstein  LLP as new  lead  counsel  for  plaintiffs  and the  putative  class.
Plaintiffs  filed a third  amended  complaint on January 19,  2001.  On March 2,
2001,  the  General  Partner  and its  affiliates  filed a demurrer to the third
amended  complaint.  On May 14, 2001,  the Court heard the demurrer to the third
amended  complaint.  On July 10,  2001,  the Court  issued  an order  sustaining
defendants'  demurrer on certain grounds.  On July 20, 2001,  Plaintiffs filed a
motion for  reconsideration  of the Court's July 10, 2001 order granting in part
and denying in part defendants' demurrer. On September 7, 2001, Plaintiffs filed
a fourth amended class and derivative action  complaint.  On September 12, 2001,
the Court denied Plaintiffs' motion for reconsideration. On October 5, 2001, the
General Partner and affiliated defendants filed a demurrer to the fourth amended
complaint,  which was heard on December 11, 2001. On February 2, 2002, the Court
served its order granting in part the demurrer.  The Court has dismissed without
leave  to amend  certain  of the  plaintiffs'  claims.  On  February  11,  2002,
plaintiffs  filed a motion seeking to certify a putative class  comprised of all
non-affiliated  persons  who own or have owned  units in the  partnerships.  The
General Partner and affiliated  defendants oppose the motion. On April 29, 2002,
the Court held a hearing on plaintiffs' motion for class  certification and took
the matter under submission after further briefing, as ordered by the court, was
submitted by the parties.  On July 10, 2002, the Court entered an order vacating
the trial date of  January  13,  2003 (as well as the  pre-trial  and  discovery
cut-off dates) and stayed the case in its entirety  through  November 7, 2002 so
that the parties could have an opportunity to discuss settlement. On October 30,
2002, the court entered an order  extending the stay in effect  through  January
10, 2003.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action  described below. On April
4, 2003, the Court preliminarily approved the settlement and scheduled a hearing
on final approval for June 2, 2003.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a Court  appointed
appraiser.  An affiliate of the General Partner has also agreed to make a tender
offer to purchase all of the partnership  interests in the  Partnerships  within
one year of final approval,  if it is granted,  and to provide partners with the
independent  appraisals at the time of these  tenders.  The proposed  settlement
also  provides  for the  limitation  of the  allowable  costs  which the General
Partner or its affiliates  will charge the  Partnerships in connection with this
litigation  and  imposes  limits  on the  class  counsel  fees and costs in this
litigation.  On April 11,  2003,  notice was  distributed  to  limited  partners
providing the details of the proposed settlement.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the General Partner and affiliated defendants
moved to strike the first  amended  complaint in its entirety for  violating the
Court's  July 10, 2001 order  granting  in part and denying in part  defendants'
demurrer in the Nuanes action, or  alternatively,  to strike certain portions of
the  complaint  based on the statute of  limitations.  Other  defendants  in the
action demurred to the fourth amended complaint,  and,  alternatively,  moved to
strike the  complaint.  On December  11, 2001,  the court heard  argument on the
motions and took the matters under  submission.  On February 4, 2002,  the Court
served  notice of its order  granting  defendants'  motion to strike  the Heller
complaint  as a violation  of its July 10, 2001 order in the Nuanes  action.  On
March 27, 2002, the plaintiffs  filed a notice  appealing the order striking the
complaint.  Before completing briefing on the appeal, the parties stayed further
proceedings  in the  appeal  pending  the  Court's  review  of the  terms of the
proposed settlement described above.

The  General  Partner  does not  anticipate  that any costs to the  Partnership,
whether legal or settlement costs,  associated with these cases will be material
to the Partnership's overall operations.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a) Exhibits:

                  3.1   Agreement  of Limited  Partnership  is  incorporated  by
                        reference  to  Exhibit  A  to  the   Prospectus  of  the
                        Registrant  dated  July  26,  1985  as  filed  with  the
                        Commission pursuant to July 424(b) under the Act.

                  3.2   Amendment to Partnership Agreement dated October 1, 1985
                        is  incorporated  by  reference  to  Exhibit  3A to  the
                        Registrant's  Annual  Report on Form 10-K for the fiscal
                        year ended December 31, 1987.

                  4.1   Certificate of Limited  Partnership dated April 29, 1985
                        is  incorporated  by  reference  to  Exhibit  4  to  the
                        Registrant's  Registration  Statement on Form S-11 dated
                        May 7, 1985.

                  4.2   Certificate  of  Amendment  to  Certificate  of  Limited
                        Partnership  dated  July  16,  1985 is  incorporated  by
                        reference   to   Exhibit  4B  in   Amendment   No  1  to
                        Registration Statement No. 2-97539, dated July 24, 1985.

                  99    Certification  Pursuant to 18 U.S.C.  Section  1350,  as
                        Adopted  Pursuant to Section  906 of the  Sarbanes-Oxley
                        Act of 2002.

            b) Reports on Form 8-K:

                  None filed during the quarter ended March 31, 2003.



                                   SIGNATURES



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



                                    DAVIDSON INCOME REAL ESTATE, L.P.


                                    By:   DAVIDSON DIVERSIFIED PROPERTIES, INC.
                                          Managing General Partner


                                    By:   /s/Patrick J. Foye
                                          Patrick J. Foye
                                          Executive Vice President


                                    By:   /s/Thomas C. Novosel
                                          Thomas C. Novosel
                                          Senior Vice President
                                          and Chief Accounting Officer


                                  Date:   May 15, 2003

                                  CERTIFICATION


I, Patrick J. Foye, certify that:


1. I have reviewed this quarterly  report on Form 10-QSB of Davidson Income Real
Estate, L.P.;


2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;


4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


      a)  Designed  such  disclosure  controls  and  procedures  to ensure  that
      material   information   relating  to  the   registrant,   including   its
      consolidated  subsidiaries,  is made  known to us by others  within  those
      entities, particularly during the period in which this quarterly report is
      being prepared;


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      quarterly report (the "Evaluation Date"); and


      c)  Presented  in  this  quarterly   report  our  conclusions   about  the
      effectiveness  of the  disclosure  controls  and  procedures  based on our
      evaluation as of the Evaluation Date;


5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: May 15, 2003

                                    /s/Patrick J. Foye
                                    Patrick J. Foye
                                    Executive   Vice   President  of  Davidson
                                    Diversified Properties,  Inc.,  equivalent
                                    of the chief executive officer of the
                                    Partnership

                                  CERTIFICATION


I, Paul J. McAuliffe, certify that:


1. I have reviewed this quarterly  report on Form 10-QSB of Davidson Income Real
Estate, L.P.;


2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;


4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


      a)  Designed  such  disclosure  controls  and  procedures  to ensure  that
      material   information   relating  to  the   registrant,   including   its
      consolidated  subsidiaries,  is made  known to us by others  within  those
      entities, particularly during the period in which this quarterly report is
      being prepared;


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      quarterly report (the "Evaluation Date"); and


      c)  Presented  in  this  quarterly   report  our  conclusions   about  the
      effectiveness  of the  disclosure  controls  and  procedures  based on our
      evaluation as of the Evaluation Date;


5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: May 15, 2003

                                    /s/Paul J. McAuliffe
                                    Paul J. McAuliffe
                                    Executive Vice President and Chief Financial
                                    Officer of Davidson Diversified  Properties,
                                    Inc., equivalent of the chief financial
                                    officer of the Partnership

Exhibit 99


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002



In connection  with the Quarterly  Report on Form 10-QSB of Davidson Income Real
Estate, L.P. (the "Partnership"),  for the quarterly period ended March 31, 2003
as filed with the  Securities  and Exchange  Commission  on the date hereof (the
"Report"),  Patrick J. Foye, as the equivalent of the chief executive officer of
the Partnership, and Paul J. McAuliffe, as the equivalent of the chief financial
officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that, to the best of his knowledge:

      (1)   The Report fully  complies  with the  requirements  of Section 13(a)
            or 15(d) of the Securities Exchange Act of 1934; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Partnership.


                                    /s/Patrick J. Foye
                              Name: Patrick J. Foye
                               Date: May 15, 2003


                                   /s/Paul J. McAuliffe
                             Name: Paul J. McAuliffe
                               Date: May 15, 2003


This  certification  accompanies  the  Report  pursuant  to  Section  906 of the
Sarbanes-Oxley  Act of 2002 and shall not,  except to the extent required by the
Sarbanes-Oxley  Act of 2002, be deemed filed by the  Partnership for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended.