================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q
              [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended: June 30, 1998
                                       OR
          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
               For the transition period from ________ to ________

                         -------------------------------

                         Commission file number: 1-9029
                          TRUMP'S CASTLE FUNDING, INC.
             (Exact name of registrant as specified in its charter)

               NEW JERSEY                                     11-2739203
     (State or other jurisdiction of                       (I.R.S. Employer
     incorporation or organization)                       Identification No.)
  Huron Avenue and Brigantine Boulevard
        Atlantic City, New Jersey                                08401
(Address of principal executive offices)                      (Zip Code)

                                 (609) 441-6060
              (Registrant's telephone number, including area code)

                                 Not Applicable
              (Former name, former address and former fiscal year,
                         if changed since last report)

                         Commission file number: 1-9029

                         TRUMP'S CASTLE ASSOCIATES, L.P.
             (Exact name of registrant as specified in its charter)

               NEW JERSEY                                     22-2608426
     (State or other jurisdiction of                       (I.R.S. Employer
     incorporation or organization)                       Identification No.)
  Huron Avenue and Brigantine Boulevard
        Atlantic City, New Jersey                                08401
(Address of principal executive offices)                      (Zip Code)

                                 (609) 441-6060
              (Registrant's telephone number, including area code)

                                 Not Applicable
              (Former name, former address and former fiscal year,
                         if changed since last report)

                         -------------------------------

         Indicate  by check  mark  whether  the  registrants  (1) have filed all
  reports required to be filed by Section 13 or 15(d) of the Securities Exchange
  Act of 1934 during the  preceding 12 months (or for such  shorter  period that
  the registrants were required to file such reports), and (2) have been subject
  to such filing requirements for the past 90 days. Yes _X_  No___

     As of August 14,  1998,  there were 200 shares of Trump's  Castle  Funding,
Inc.'s Common Stock, par value $.01 per share, outstanding.

     Trump's  Castle  Funding,  Inc.  meets the  conditions set forth in General
Instructions H(1)(a) and (b) of From 10-Q and is therefore filing this form with
the reduced disclosure format.

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



                                  TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY


                                                INDEX TO FORM 10-Q

<TABLE>
<CAPTION>
                                                                                                          Page No.
                                                                                                          --------
<S>                                                                                                         <C>
  PART I - FINANCIAL INFORMATION
     ITEM 1 - Financial Statements

      Condensed Consolidated Balance Sheets of Trump's Castle Associates, L.P. and Subsidiary as of
           June 30, 1998 (unaudited) and December 31, 1997..............................................     1

      Condensed Consolidated Statements of Operations of Trump's Castle Associates, L.P. and Subsidiary
            for the Three and Six Months Ended June 30, 1998 and 1997 (unaudited).......................     2

      Condensed Consolidated Statement of Partners' Capital of Trump's Castle Associates, L.P. and
            Subsidiary for the Six Months Ended June 30, 1998 (unaudited)...............................     3

      Condensed Consolidated Statements of Cash Flows of Trump's Castle Associates, L.P. and Subsidiary
            for the Six Months Ended June 30, 1998 and 1997 (unaudited).................................     4

      Notes to Condensed Consolidated Financial Statements of Trump's Castle
            Associates, L.P. and Subsidiary (unaudited) ................................................     5

     ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations.....     7

     ITEM 3 - Quantitative and Qualitative Disclosures About Market Risk................................    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...........................................................    12

     ITEM 4 - Submission of Matters to a Vote of Security Holders.......................................    12

     ITEM 5 - Other Information.........................................................................    12

     ITEM 6 - Exhibits and Reports on Form 8-K..........................................................    12

  SIGNATURES
      Signature - Trump's Castle Funding, Inc...........................................................    13
      Signature - Trump's Castle Associates, L.P........................................................    14
</TABLE>



<PAGE>


                                   PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                           TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
                               CONDENSED CONSOLIDATED BALANCE SHEETS
                                           (in thousands)
                                               ASSETS
<TABLE>
<CAPTION>
                                                                            June 30,  December 31,
                                                                              1998       1997     
                                                                            --------   --------
                                                                          (unaudited)
<S>                                                                         <C>        <C>
CURRENT ASSETS:
   Cash and cash equivalents ............................................   $ 19,148   $ 14,472
   Receivables, net .....................................................      8,704      8,028
   Inventories ..........................................................      2,905      3,090
   Other current assets .................................................      2,367      1,713
                                                                            --------   --------
         Total current assets ...........................................     33,124     27,303
PROPERTY AND EQUIPMENT, NET .............................................    492,462    499,513
OTHER ASSETS ............................................................     16,489     14,590
                                                                            --------   --------
         Total assets ...................................................   $542,075   $541,406
                                                                            ========   ========

                               LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
   Current maturities-other borrowings ..................................   $  1,963   $  7,954
   Accounts payable and accrued expenses ................................     28,871     25,742
   Due to affiliates ....................................................     21,100     23,949
   Accrued interest payable .............................................      5,044      4,020
                                                                            --------   --------
         Total current liabilities ......................................     56,978     61,665
MORTGAGE NOTES
   (Net of unamortized discount of $28,551 and $30,170, respectively) ...    213,590    211,971
PIK NOTES
   (Net of unamortized discount of $7,012 and $7,197, respectively) .....     79,496     73,699
OTHER BORROWINGS ........................................................     67,801     55,673
OTHER LONG TERM LIABILITIES .............................................      3,540      4,730
                                                                            --------   --------
         Total liabilities ..............................................    421,405    407,738
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL .......................................................    120,670    133,668
                                                                            --------   --------
         Total liabilities and capital ..................................   $542,075   $541,406
                                                                            ========   ========
</TABLE>

              The accompanying notes are an integral part of these
                     condensed consolidated balance sheets.

                                        1

<PAGE>



                 TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                   (unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>
                                        Three Months              Six Months
                                       Ended June 30,            Ended June 30,
                                   ----------------------    ----------------------
                                      1998         1997         1998         1997
                                   ---------    ---------    ---------    ---------
<S>                                <C>          <C>          <C>          <C>      
REVENUES:
   Gaming ......................   $  61,163    $  68,545    $ 123,776    $ 132,519
   Rooms .......................       3,904        4,842        7,461        8,779
   Food and beverage ...........       8,047        8,613       15,541       16,532
   Other .......................       2,713        3,162        4,598        5,368
                                   ---------    ---------    ---------    ---------
      Gross revenues ...........      75,827       85,162      151,376      163,198
Less-promotional allowances ....       8,986       10,123       17,932       19,735
                                   ---------    ---------    ---------    ---------
   Net revenues ................      66,841       75,039      133,444      143,463
                                   ---------    ---------    ---------    ---------
COSTS AND EXPENSES:
   Gaming ......................      38,727       44,449       78,604       85,483
   Rooms .......................         931          691        1,599        1,299
   Food and beverage ...........       2,522        2,497        4,354        4,620
   General and administrative ..      13,682       16,049       28,691       32,222
   Depreciation and amortization       4,148        3,684        8,198        8,725
                                   ---------    ---------    ---------    ---------
   Total costs and expenses ....      60,010       67,370      121,446      132,349
                                   ---------    ---------    ---------    ---------
      Income from operations ...       6,831        7,669       11,998       11,114
INTEREST INCOME ................         153           91          381          160
INTEREST EXPENSE ...............     (12,762)     (12,330)     (25,377)     (24,528)
                                   ---------    ---------    ---------    ---------
   Net loss ....................   $  (5,778)   $  (4,570)   $ (12,998)   $ (13,254)
                                   =========    =========    =========    =========
</TABLE>



              The accompanying notes are an integral part of these
                       condensed consolidated statements.



                                        2

<PAGE>



                 TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
              CONDENSED CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
                     FOR THE SIX MONTHS ENDED JUNE 30, 1998
                                   (unaudited)
                                 (in thousands)


                                         Partners'     Partners'
                                          Capital       Deficit          Total
                                         ---------     ---------      ---------
Balance at December 31, 1997 .......     $ 175,395     $ (41,727)     $ 133,668
Net loss ...........................          --         (12,998)       (12,998)
                                         ---------     ---------      ---------
Balance at June 30, 1998 ...........     $ 175,395     $ (54,725)     $ 120,670
                                         =========     =========      =========


               The accompanying notes are an integral part of this
                       condensed consolidated statement.




                                        3

<PAGE>



                 TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                   (unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>
                                                                                Six Months
                                                                              Ended June 30, 
                                                                           --------------------
                                                                             1998        1997 
                                                                           --------    --------
<S>                                                                        <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss ............................................................   $(12,998)   $(13,254)
   Adjustments to reconcile net loss to net cash flows provided
     by operating activities-
       Noncash charges-
          Depreciation and amortization ................................      8,198       8,725
          Accretion of bond discount ...................................      1,804       1,543
          Issuance of debt in exchange for accrued interest ............      5,612       4,908
          Provision for losses on receivables ..........................        536         744
          Valuation allowance-CRDA investments .........................        528         576
          Increase in receivables ......................................     (1,212)     (2,347)
          Decrease (increase) in inventories ...........................        185      (1,270)
          Increase in other current assets .............................       (614)     (1,369)
          Increase in other assets .....................................       (888)     (3,412)
          Increase in current liabilities ..............................      4,153       3,248
          (Decrease) increase in amounts due to affiliates .............       (321)     10,125
          Decrease in other liabilities ................................     (1,190)        (75)
                                                                           --------    --------
               Net cash flows provided by operating activities .........      3,793       8,142
                                                                           --------    --------
CASH FLOWS FROM INVESTING ACTIVITIES:
          Purchases of property and equipment, net .....................     (1,147)     (1,397)
          Purchase of CRDA investments .................................     (1,539)     (1,672)
                                                                           --------    --------
               Net cash flows used in investing activities .............     (2,686)     (3,069)
                                                                           --------    --------
CASH FLOWS FROM FINANCING ACTIVITIES:
          Repayment of note payable to affiliate .......................     (2,550)     (2,000)
          Repayment of other borrowings ................................    (60,881)     (2,120)
          Proceeds of other borrowings .................................     67,000        --   
                                                                           --------    --------
               Net cash flows provided by (used in) financing activities      3,569      (4,120)
                                                                           --------    --------
               Net increase in cash and cash equivalents ...............      4,676         953
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD .......................     14,472      15,380
                                                                           --------    --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD .............................   $ 19,148    $ 16,333
                                                                           ========    ========
SUPPLEMENTAL INFORMATION:
   Cash paid for interest ..............................................   $ 16,874    $ 18,025
                                                                           ========    ========
</TABLE>



              The accompanying notes are an integral part of these
                       condensed consolidated statements.

                                        4

<PAGE>



                 TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

(1)  Organization and Operations

     The accompanying  condensed consolidated financial statements include those
of Trump's  Castle  Associates,  L.P.,  a New Jersey  limited  partnership  (the
"Partnership"), and its wholly owned subsidiary, Trump's Castle Funding, Inc., a
New Jersey  corporation  ("Funding").  The  Partnership is wholly owned by Trump
Hotels & Casino Resorts Holdings,  L.P., a Delaware limited  partnership  ("THCR
Holdings").  THCR Holdings is currently a 63.4% owned subsidiary of Trump Hotels
& Casino Resorts, Inc. ("THCR").

     All significant intercompany balances and transactions have been eliminated
in the condensed consolidated financial statements.

     The  Partnership  operates  Trump Marina Hotel Casino ("Trump  Marina"),  a
luxury casino hotel located in the Marina District of Atlantic City, New Jersey.
The primary  portion of Trump  Marina's  revenues  are  derived  from its gaming
operations.  Competition  in the Atlantic  City gaming market is intense and the
Partnership  believes  that the  competition  will  continue due to expansion by
existing operators and new entrants to the gaming industry becoming operational.

     Funding was  incorporated  solely to serve as a financing  company to raise
funds through the issuance of bonds to the public. Since Funding has no business
operations,  its  ability to repay the  principal  and  interest  on the 10 1/4%
Senior  Secured  Notes due 2003 (the "New Senior  Notes"),  the 11 3/4% Mortgage
Notes due 2003 (the  "Mortgage  Notes")  and its  Increasing  Rate  Subordinated
Pay-in-Kind  Notes due 2005 (the "PIK Notes") is completely  dependent  upon the
operations  of the  Partnership.  (See Note 3 regarding  refinancing  of the Old
Senior Notes.)

     The  accompanying  condensed  consolidated  financial  statements have been
prepared by the Partnership  without audit.  In the opinion of the  Partnership,
all adjustments,  consisting of only normal recurring  adjustments  necessary to
present fairly the financial position,  results of operations and cash flows for
the periods presented have been made.

     The  accompanying  condensed  consolidated  financial  statements have been
prepared  by the  Partnership  pursuant  to the  rules  and  regulations  of the
Securities and Exchange Commission (the "SEC"). Accordingly, certain information
and note disclosures  normally included in the financial  statements prepared in
conformity with generally accepted accounting principles have been omitted.

     These  condensed  consolidated  financial  statements  should  be  read  in
conjunction  with  the  consolidated  financial  statements  and  notes  thereto
included in the annual report on Form 10-K for the year ended  December 31, 1997
filed with the SEC by the Partnership and Funding.

     Certain  reclassifications  have been made to conform prior year  financial
information to the current year presentation.

     The casino  industry in Atlantic  City is seasonal in nature;  accordingly,
the results of operations  for the three and six month  periods  ending June 30,
1998 are not necessarily indicative of the operating results for a full year.

  (2) Property and Equipment

     During the second quarter of 1997, the Partnership revised its estimates of
the useful lives of buildings,  building improvements and furniture and fixtures
which  were  acquired  in  1996.   Buildings  and  building   improvements  were
reevaluated to have a forty year life and furniture and fixtures were determined
to have a five to seven year life. The  Partnership  believes these changes more
appropriately  reflect the timing of the economic  benefits to be received  from
these assets during their estimated  useful lives. For the six months ended June
30,  1998,  the net effect of applying  these new lives was to decrease  the net
loss by  $1,409,000.  There was no  effect  to net loss as a result of  applying
these new estimates of useful lives for the three months ended June 30, 1998.

  (3) Long Term Debt and Subsequent Event

     On April 17, 1998,  Funding refinanced its 11 1/2% Senior Secured Notes due
2000 (the "Old Senior Notes")

                                        5

<PAGE>



                 TRUMP'S CASTLE ASSOCIATES, L.P. AND SUBSIDIARY
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                                   (unaudited)

and its term loan with a bank (the "Term Loan") by issuing the New Senior Notes.
The New Senior Notes have a priority  mortgage  lien ahead of the  Partnership's
Mortgage  Notes and are further  secured by virtually  all of the  Partnership's
assets.  The  proceeds  from the  issuance of the New Senior  Notes were used to
redeem  all of the  issued and  outstanding  Old  Senior  Notes at 100% of their
principal  amount and to repay the Term Loan in full. In  conjunction  with this
refinancing,  Trump's Castle Hotel & Casino Inc., a New Jersey  corporation  and
the general  partner of the  Partnership  ("TCHI"),  obtained a working  capital
credit facility (the "Working Capital Loan").  Both the New Senior Notes and the
Working Capital Loan are guaranteed by the Partnership.

     The New Senior Notes have an  outstanding  principal  amount of $62,000,000
and bear interest at the rate of 10 1/4% per annum,  payable  semi-annually each
April and  October.  The New  Senior  Notes  mature  on April  17,  2003 and are
included in Other Borrowings in the Partnership's condensed consolidated balance
sheet.

     The Working Capital Loan has an outstanding  principal amount of $5,000,000
and bears interest at the rate of 10 1/4% per annum, payable  semi-annually each
April and October.  The entire  principal  balance of the Working  Capital Loan,
which  matures on April 17,  2003,  is payable to TCHI and is  included in Other
Borrowings on the Partnership's condensed consolidated balance sheet.

     On July 8, 1998, the  Partnership  received a bank  commitment to refinance
its  Mortgage  Notes,  New Senior Notes and the Working  Capital  Loan. A tender
offer was made to existing  mortgage  note holders on July 9, 1998 offering $940
per $1,000 of principal  amount,  plus  accrued  interest.  Consummation  of the
tender offer is conditioned upon, among other things, a minimum tender of 98% of
the principal  amount of the mortgage notes.  The expiration of the tender offer
was extended to August 14, 1998.  Although it is the Partnership's  intention to
complete  this  transaction,  no  assurances  can be  made  as to  the  ultimate
consummation of the  refinancing,  or on the terms as are currently  outlined in
the existing tender offer and bank commitment.

(4)  Financial Information of Funding

         Financial information relating to Funding is as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                      June 30,  December 31,
                                                                                        1998       1997    
                                                                                      --------   --------
<S>                                                                                   <C>        <C>
Total Assets (including Mortgage Notes Receivable of $242,141, net  of
unamortized  discount of $28,551 and $30,170 at June 30, 1998 and December 31,
1997, PIK Notes Receivable of $86,508, net of unamortized  discount of $7,012
at June 30, 1998 and  $80,896, net of unamortized discount of $7,197 at
December 31, 1997, New Senior Notes Receivable of $62,000 at June 30,
1998 and Old Senior Notes Receivable of $27,000 at December 31, 1997) .............   $355,086   $312,670
                                                                                      ========   ========

Total Liabilities and Capital (including Mortgage Notes Payable of $242,141, net of
unamortized discount of $28,551 and $30,170 at June 30, 1998 and December
31, 1997, PIK Notes Payable of $86,508, net of unamortized discount of
$7,012 at June 30, 1998 and $80,896, net of unamortized discount of $7,197
at December 31, 1997, New Senior Notes Payable of $62,000 at June 30, 1998
and Old Senior Notes Payable of $27,000 at December 31, 1997) .....................   $355,086   $312,670
                                                                                      ========   ========
</TABLE>


                                                              Six Months
                                                             Ended June 30,   
                                                      --------------------------
                                                        1998               1997 
                                                      -------            -------
Interest Income ..........................            $23,917            $22,243
Interest Expense .........................             23,917             22,243
                                                      -------            -------
Net Income ...............................            $  --              $  --  
                                                      =======            =======

                                        6

<PAGE>



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

  Capital Resources and Liquidity

     Cash flow from operating  activities is the Partnership's  principal source
of liquidity.  For the six months ended June 30 1998, the Partnership's net cash
flow provided by operating activities was $3,793,000.

     In addition to funding operations, the Partnership's principal uses of cash
are capital expenditures and debt service.

     Capital   expenditures   for  1998  are  anticipated  to  be  approximately
$5,000,000 and principally consist of hotel room renovations, as well as ongoing
casino floor improvements.

     At June 30, 1998, the Partnership's debt consisted primarily of (i) the New
Senior Notes, (ii) the Mortgage Notes,  (iii) the PIK Notes and (iv) the Working
Capital Loan.

     The Mortgage Notes have an outstanding  principal  amount of  approximately
$242,141,000,  bear  interest  at the rate of 11 3/4% per  annum  and  mature on
November 15, 2003.

     The PIK  Notes  have  an  outstanding  principal  amount  of  approximately
$86,508,000  and mature on November  15,  2005.  Interest is  currently  payable
semi-annually at the rate of 13 7/8%. On or prior to November 15, 2003, interest
on the PIK Notes may be paid in cash or through the issuance of  additional  PIK
Notes. During the second quarter of 1998 interest in the amount of approximately
$5,612,000  was paid  through  the  issuance  of  additional  PIK  Notes and the
Partnership  anticipates that additional  interest due during the fourth quarter
of approximately  $6,002,000 will be paid through the issuance of additional PIK
Notes.

     On April 17,  1998,  Funding  refinanced  its Old Senior Notes and its Term
Loan by issuing the New Senior Notes.  The proceeds from the issuance of the New
Senior  Notes were used to redeem all of the issued and  outstanding  Old Senior
Notes at 100% of their  principal  amount and to repay the Term Loan in full. In
conjunction  with this  refinancing,  TCHI  obtained  a working  capital  credit
facility  (the  "Working   Capital   Loan")  and  loaned  the  proceeds  to  the
Partnership.

     The New Senior Notes have an  outstanding  principal  amount of $62,000,000
and bear interest at the rate of 10 1/4% per annum,  payable  semi-annually each
April and October. The New Senior Notes mature on April 17, 2003.

     The Working Capital Loan has an outstanding  principal amount of $5,000,000
and bears interest at the rate of 10 1/4% per annum, payable  semi-annually each
April and  October.  The entire  principal  balance of the Working  Capital Loan
matures on April 17, 2003.

     On July 8, 1998, the  Partnership  received a bank  commitment to refinance
its  Mortgage  Notes,  New Senior Notes and the Working  Capital  Loan. A tender
offer was made to existing  mortgage  note holders on July 9, 1998 offering $940
per $1,000 of principal  amount,  plus  accrued  interest.  Consummation  of the
tender offer is conditioned upon, among other things, a minimum tender of 98% of
the principal  amount of the mortgage notes.  The expiration of the tender offer
was extended to August 14, 1998.  Although it is the Partnership's  intention to
complete  this  transaction,  no  assurances  can be  made  as to  the  ultimate
consummation of the  refinancing,  or on the terms as are currently  outlined in
the existing tender offer and bank commitment.

     The  Partnership's  total cash debt service  requirement was  approximately
$20,880,000  during  the six  months  ended  June 30,  1998 and the  Partnership
anticipates that  approximately  $18,859,000 in cash will be required during the
remainder of 1998 to meet its debt service obligations.  The Partnership has the
authority to obtain a working  capital  facility of up to $10,000,000  (of which
approximately  $5,437,000 is  outstanding),  although  there can be no assurance
that such financing will be available or on terms acceptable to the Partnership.

Results of Operations: Operating Revenues and Expenses

     The financial  information presented below reflects the financial condition
and  results  of  operations  of the  Partnership.  Funding  is a  wholly  owned
subsidiary of the  Partnership  and conducts no business  other than  collecting
amounts  due under  certain  intercompany  notes  from the  Partnership  for the
purpose  of  paying  principal  of,  premium,   if  any,  and  interest  on  its
indebtedness, which Funding issued as a nominee for the Partnership.


                                        7

<PAGE>



ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS - (Continued)


Comparison of Results of  Operations  for the Three Month Periods Ended June 30,
1998 and 1997.

     Gaming  revenues are the primary source of the  Partnership's  revenues and
primarily  consist of slot  machine and table  games win.  The  following  table
details activity for the major components of gaming revenues:


                                                   Three Months Ended June 30,
                                                   ---------------------------
                                                    1998                 1997
                                                    ----                 ----
                                                       (dollars in thousands)

Table Game Revenue ......................           $15,131             $18,799
Decrease from Prior Period ..............           ($3,668)
Table Game Drop .........................          $100,776            $128,355
Decrease from Prior Period ..............          ($27,579)
Table Game Win Percentage ...............              15.0%               14.6%
Increase from Prior Period ..............          0.4 pts.
Number of Table Games ...................                91                  96
Decrease from Prior Period ..............                (5)

Slot Revenue ............................           $45,503             $49,210
Decrease from Prior Period ..............           ($3,707)
Slot Handle .............................          $561,710            $590,006
Decrease from Prior Period ..............          ($28,296)
Slot Win Percentage .....................               8.1%                8.3%
Decrease from Prior Period ..............        (0.2 pts.)
Number of Slot Machines .................             2,163               2,168
Decrease from Prior Period ..............                (5)

Poker Revenue ...........................              --                  $131
Decrease from Prior Period ..............             ($131)
Number of Poker Tables ..................              --                     6
Decrease from Prior Period ..............                (6)

Other Gaming Revenue ....................              $529                $405
Increase from Prior Period ..............              $124

Total Gaming Revenues ...................           $61,163             $68,545
Decrease from Prior Period ..............           ($7,382)




                                        8

<PAGE>



ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS - (Continued)

     Table  game and slot  revenues  decreased  by  $3,668,000  and  $3,707,000,
respectively,  for the three  months  ended June 30, 1998  compared to the prior
year.  These  decreases  are a result of the  increased  gaming  capacity in the
Atlantic  City market as well as  management's  decision  to reduce  promotional
gaming  costs in an effort to eliminate  less  profitable  programs.  Table game
revenues  represent the amount retained by the Partnership  from amounts wagered
at table games.  The table game win percentage  tends to be fairly constant over
the long term, but may vary significantly in the short term, due to large wagers
by "high  rollers." The Atlantic City industry table game win  percentages  were
14.9% and  14.7%  for the three  month  periods  ended  June 30,  1998 and 1997,
respectively.

     Non  gaming  revenues,   in  the  aggregate,   decreased  by  approximately
$1,953,000 or 11.8% to $14,664,000 for the three months ended June 30, 1998 from
$16,617,000 for the three months ended June 30, 1997, primarily as a result of a
decrease in complimentary room rates as well as a decrease in complimentary food
and beverage activity.  The complimentary room rate was reduced by management to
more closely conform to current industry practice. Industry-wide room rates have
recently  decreased as a result of increased room inventory in the Atlantic City
market.

     The  majority  of the  decrease  in  non-gaming  revenues  was  offset by a
decrease  in  promotional   allowances.   Promotional  allowances  decreased  by
approximately  $1,137,000 or 11.2% to $8,986,000 for the three months ended June
30, 1998 from $10,123,000 for the three months ended June 30, 1997, primarily as
a result of a decrease  in  complimentary  food and rooms  related to  marketing
activities.  This  decrease is  primarily  the result of a decrease in promotion
spending activity in an effort to control costs.

     Gaming costs decreased approximately $5,722,000 or 12.9% to $38,727,000 for
the three months ended June 30, 1998 from $44,449,000 for the three months ended
June  30,  1997.  This  decrease  is  primarily  the  result  of a  decrease  in
promotional and  complimentary  expenses achieved by eliminating less profitable
programs.

     General and administrative expenses decreased  approximately  $2,367,000 or
14.7% for the three  months  ended  June 30,  1998 from the same  period in 1997
primarily  due to reduced  payroll and other  benefits  related to Trump  Casino
Services,  L.L.C.  ("TCS"),  a wholly owned  subsidiary of THCR Holdings,  which
provides  administrative  support  services  to all of the Trump  Atlantic  City
properties.







                                        9

<PAGE>



ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS - (Continued)

Comparison  of Results of  Operations  for the Six Month  Periods Ended June 30,
1998 and 1997.

     Gaming  revenues are the primary source of the  Partnership's  revenues and
primarily  consist of slot  machine and table  games win.  The  following  table
details activity for the major components of gaming revenues:

                                                     Six Months Ended June 30,
                                                     -------------------------
                                                     1998                 1997
                                                     ----                 ----
                                                       (dollars in thousands)

Table Game Revenue ......................           $32,809             $37,343
Decrease from Prior Period ..............           ($4,534)
Table Game Drop .........................          $212,620            $244,905
Decrease from Prior Period ..............          ($32,285)
Table Game Win Percentage ...............              15.4%               15.2%
Increase from Prior Period ..............           0.2 pts.
Number of Table Games ...................                93                  95
Decrease from Prior Period ..............                (2)

Slot Revenue ............................           $90,155             $94,353
Decrease from Prior Period ..............           ($4,198)
Slot Handle .............................        $1,113,553          $1,137,893
Decrease from Prior Period ..............          ($24,340)
Slot Win Percentage .....................               8.1%                8.3%
Decrease from Prior Period ..............         (0.2 pts.)
Number of Slot Machines .................             2,159               2,250
Decrease from Prior Period ..............               (91)

Poker Revenue ...........................           $  --                  $256
Decrease from Prior Period ..............             ($256)
Number of Poker Tables ..................              --                     6
Decrease from Prior Period ..............                (6)

Other Gaming Revenue ....................              $812                $567
Increase from Prior Period ..............              $245

Total Gaming Revenues ...................          $123,776            $132,519
Decrease from Prior Period ..............           ($8,743)






                                       10

<PAGE>



ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS - (Continued)

     Table game revenues  represent the amount retained by the Partnership  from
amounts wagered at table games. The table game win percentage tends to be fairly
constant over the long term, but may vary  significantly  in the short term, due
to large wagers by "high  rollers." The Atlantic  City  industry  table game win
percentages  were 15.2% and 15.1% for the six month  periods ended June 30, 1998
and 1997, respectively.

     Non  gaming  revenues,   in  the  aggregate,   decreased  by  approximately
$3,079,000 or 10.0% to  $27,600,000  for the six months ended June 30, 1998 from
$30,679,000  for the six months ended June 30, 1997,  primarily as a result of a
decrease in complimentary room rates.

     Promotional  allowances  decreased by  approximately  $1,803,000 or 9.1% to
$17,932,000 for the six months ended June 30, 1998 from  $19,735,000 for the six
months ended June 30, 1997, primarily as a result of a decrease in complimentary
food and rooms related to marketing  activities.  This decrease is primarily the
result of a decrease in  promotional  spending  activity in an effort to control
costs.

     Gaming costs decreased approximately  $6,879,000 or 8.0% to $78,604,000 for
the six months  ended June 30, 1998 from  $85,483,000  for the six months  ended
June  30,  1997.  This  decrease  is  primarily  the  result  of a  decrease  in
promotional and complimentary expenses.

     General and administrative expenses decreased  approximately  $3,531,000 or
11.0%  for the six  months  ended  June 30,  1998  from the same  period in 1997
primarily  due to reduced  advertising  expenses and payroll and other  benefits
related to TCS which  provides  administrative  support  services  to all of the
Trump Atlantic City properties.

Seasonality

     The casino  industry in Atlantic  City is seasonal in nature;  accordingly,
the results of operations  for the three and six month  periods  ending June 30,
1998 are not necessarily indicative of the operating results for a full year.

Important Factors Relating to Forward Looking Statements

     The  Private  Securities  Litigation  Reform  Act of 1995  provides a "safe
harbor"  for  forward-looking   statements  so  long  as  those  statements  are
identified as  forward-looking  and are  accompanied  by  meaningful  cautionary
statements  identifying  important  factors that could cause  actual  results to
differ  materially from those projected in such  statements.  In connection with
certain  forward-looking  statements  contained in this Quarterly Report on Form
10-Q  and  those  that  may  be  made  in  the  future  by or on  behalf  of the
Registrants,  the  Registrants  note that there are various  factors  that could
cause  actual  results  to differ  materially  from  those set forth in any such
forward-looking  statements.  The  forward-looking  statements  contained in the
Quarterly  Report were prepared by management  and are qualified by, and subject
to,  significant   business,   economic,   competitive,   regulatory  and  other
uncertainties  and  contingencies,  all of which are  difficult or impossible to
predict  and  many  of  which  are  beyond  the  control  of  the   Registrants.
Accordingly,  there  can be no  assurance  that the  forward-looking  statements
contained in this Quarterly  Report will be realized or that actual results will
not be  significantly  higher or lower. The statements have not been audited by,
examined by,  compiled by or subjected to agreed-upon  procedures by independent
accountants,  and no  third-party  has  independently  verified or reviewed such
statements.  Readers of this  Quarterly  Report should  consider  these facts in
evaluating  the  information  contained  herein.  In addition,  the business and
operations of the  Registrants  are subject to substantial  risks which increase
the uncertainty  inherent in the  forward-looking  statements  contained in this
Quarterly Report. The inclusion of the forward-looking  statements  contained in
this  Quarterly  Report  should  not  be  regarded  as a  representation  by the
Registrants or any other person that the forward-looking statements contained in
this Quarterly  Report will be achieved.  In light of the foregoing,  readers of
this  Quarterly  Report  are  cautioned  not  to  place  undue  reliance  on the
forward-looking statements contained herein.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Pursuant to the General  Instructions  to Rule 305 of  Regulation  S-K, the
quantitative and qualitative  disclosures  called for by this Item 3 and by Rule
305 of Regulation S-K are inapplicable to the Registrants at this time.

                                       11

<PAGE>



                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

     The  Partnership,  its partners,  certain  members of the former  Executive
Committee,  Funding and certain of their employees are involved in various legal
proceedings.  Such persons and entities are vigorously defending the allegations
against  them and  intend to contest  vigorously  any  future  proceedings.  The
Partnership  and Funding have agreed to indemnify  such persons  against any and
all losses, claims, damages, expenses (including reasonable costs, disbursements
and  counsel  fees) and  liabilities  (including  amounts  paid or  incurred  in
satisfaction of settlements, judgments, fines and penalties) incurred by them in
said legal proceedings.

     Various legal  proceedings  are now pending  against the  Partnership.  The
Partnership considers all such proceedings to be ordinary litigation incident to
the character of its business.  Management believes that the resolution of these
claims  will not,  individually  or in the  aggregate,  have a material  adverse
effect on the financial condition or results of operations of the Partnership.

     From  time  to  time,   the   Partnership   may  be   involved  in  routine
administrative proceedings involving alleged violations of certain provisions of
the New Jersey Casino Control Act.  However,  the Partnership  believes that the
final  outcome of these  proceedings  will not,  either  individually  or in the
aggregate,  have a material  adverse effect on the Partnership or on its ability
to otherwise retain or renew any casino or other licenses required under the New
Jersey Casino Control Act for the operation of Trump Marina.

ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS

     None.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

     None.

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

     None.

ITEM 5 - OTHER INFORMATION

     None.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

     a.   Exhibits:

     Exhibit No.      Description of Exhibit
     -----------      ----------------------

         27.1     Financial Data Schedule of Trump's Castle Funding, Inc.

         27.2     Financial Data Schedule of Trump's Castle Associates, L.P.

     b.   Current Reports on Form 8-K:

                  None.



                                       12

<PAGE>




                                   SIGNATURES

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




                                      TRUMP'S CASTLE FUNDING, INC.
                                            (Registrant)

Date: August 14, 1998
                                        By:  /s/ NICHOLAS L. RIBIS          
                                             ----------------------------------
                                        Nicholas L. Ribis
                                        President and Chief Executive Officer
                                        (Duly Authorized Officer and
                                        Principal Financial Officer)




                                       13

<PAGE>



                                   SIGNATURES

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




                                     TRUMP'S CASTLE ASSOCIATES, L.P.
                                            (Registrant)
                                       By:   Trump's Castle Hotel & Casino, Inc.
                                             its general partner
Date: August 14, 1998
                                       By:  /s/ NICHOLAS L. RIBIS         
                                            -----------------------------------
                                       Nicholas L. Ribis
                                       President and Chief Executive Officer
                                       (Duly Authorized Officer and
                                       Principal Financial Officer)






                                       14