<PAGE>

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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, D.C. 20549-1004

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

                                   FORM 10-Q

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

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

  FOR THE PERIOD ENDED JUNE 30, 2001

                                      OR

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

  FOR THE TRANSITION PERIOD FROM  TO

  COMMISSION FILE NUMBER 0-15538

               FIRST CAPITAL INCOME PROPERTIES, LTD.--SERIES XI
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

              ILLINOIS                                 36-3364279
   (STATE OR OTHER JURISDICTION OF                  (I.R.S. EMPLOYER
   INCORPORATION OR ORGANIZATION)                  IDENTIFICATION NO.)

     TWO NORTH RIVERSIDE PLAZA,                        60606-2607
             SUITE 700,                                (ZIP CODE)
          CHICAGO, ILLINOIS
   (ADDRESS OF PRINCIPAL EXECUTIVE
              OFFICES)

                                (312) 207-0020
             (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 registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [_]

DOCUMENTS INCORPORATED BY REFERENCE:

The First Amended and Restated Certificate and Agreement of Limited
Partnership filed as Exhibit A to the Partnership's Prospectus dated September
12, 1985, included in the Partnership's Registration Statement on Form S-11,
is incorporated herein by reference in Part I of this report.

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<PAGE>

BALANCE SHEETS
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                                June 30,
                                                  2001      December 31,
                                               (Unaudited)      2000
------------------------------------------------------------------------
<S>                                            <C>          <C>
ASSETS
Investment in commercial rental property:
 Land                                          $ 1,879,500  $ 1,879,500
 Buildings and improvements                     17,825,800   17,522,100
------------------------------------------------------------------------
                                                19,705,300   19,401,600
 Accumulated depreciation and amortization      (8,798,300)  (8,552,900)
------------------------------------------------------------------------
 Total investment property, net of accumulated
  depreciation and amortization                 10,907,000   10,848,700
Cash and cash equivalents                        6,481,400    6,468,400
Rents receivable                                   223,100      596,500
------------------------------------------------------------------------
                                               $17,611,500  $17,913,600
------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
 Mortgage loan payable                         $   364,300  $   568,400
 Front-End Fees Loan payable to Affiliate        8,295,200    8,295,200
 Accounts payable and accrued expenses             759,200      752,200
 Due to Affiliates                                   3,200        1,300
 Prepaid rent                                           --       61,700
 State income taxes payable                         16,000       25,000
 Distribution payable                              230,500      230,600
 Security deposits                                  82,800       84,200
 Other liabilities                                 198,600      194,200
------------------------------------------------------------------------
                                                 9,949,800   10,212,800
------------------------------------------------------------------------
Partners' capital
 General Partner                                 1,408,800    1,404,600
 Limited Partners (57,621 Units issued and
  outstanding)                                   6,252,900    6,296,200
------------------------------------------------------------------------
                                                 7,661,700    7,700,800
------------------------------------------------------------------------
                                               $17,611,500  $17,913,600
------------------------------------------------------------------------
</TABLE>
STATEMENTS OF PARTNERS' CAPITAL
For the six months ended June 30, 2001 (Unaudited)
and the year ended December 31, 2000
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                     General    Limited
                                     Partner    Partners     Total
----------------------------------------------------------------------
<S>                                 <C>        <C>         <C>
Partners' capital, January 1, 2000  $1,389,100 $5,686,400  $7,075,500
Net income for
 the year ended December 31,
 2000                                   15,500  1,531,900   1,547,400
Distributions for
 the year ended December 31,
 2000                                            (922,100)   (922,100)
----------------------------------------------------------------------
Partners' capital, December 31,
 2000                                1,404,600  6,296,200   7,700,800
Net income for
 the six months ended June 30,
 2001                                    4,200    417,700     421,900
Distributions for
 the six months ended June 30,
 2001                                            (461,000)   (461,000)
----------------------------------------------------------------------
Partners' capital,
 June 30, 2001                      $1,408,800 $6,252,900  $7,661,700
----------------------------------------------------------------------
</TABLE>
    The accompanying notes are an integral part of the financial statements
                                                                               4
<PAGE>

STATEMENTS OF INCOME AND EXPENSES
For the six months ended June 30, 2001 and 2000
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)

<TABLE>
<CAPTION>
                                                      2001       2000
------------------------------------------------------------------------
<S>                                                <C>        <C>
Income:
 Rental                                            $1,876,600 $1,972,400
 Interest                                             160,900    198,200
------------------------------------------------------------------------
                                                    2,037,500  2,170,600
------------------------------------------------------------------------
Expenses:
 Interest:
  Nonaffiliates                                        18,800     45,500
 Depreciation and amortization                        245,400    252,200
 Property operating:
  Affiliates                                            3,500      9,700
  Nonaffiliates                                       691,100    659,100
 Real estate taxes                                    280,000    271,900
 Insurance--Affiliate                                  52,600     55,100
 Repairs and maintenance                              239,700    243,200
 General and administrative:
  Affiliates                                            4,000      5,800
  Nonaffiliates                                        57,000     53,000
------------------------------------------------------------------------
                                                    1,592,100  1,595,500
------------------------------------------------------------------------
Income before state income tax expense                445,400    575,100
State income tax expense                               23,500     19,800
------------------------------------------------------------------------
Net income                                         $  421,900 $  555,300
------------------------------------------------------------------------
Net income allocated to General Partner            $    4,200 $    5,600
------------------------------------------------------------------------
Net income allocated to Limited Partners           $  417,700 $  549,700
------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit
 (57,621 Units outstanding)                        $     7.25 $     9.54
------------------------------------------------------------------------
</TABLE>

STATEMENTS OF INCOME AND EXPENSES
For the quarters Ended June 30, 2001 and 2000
(Unaudited)
(All dollars rounded to nearest 00s
except per Unit amounts)

<TABLE>
<CAPTION>
                                                             2001      2000
------------------------------------------------------------------------------
<S>                                                        <C>      <C>
Income:
 Rental                                                    $854,300 $  930,000
 Interest                                                    70,200    103,900
------------------------------------------------------------------------------
                                                            924,500  1,033,900
------------------------------------------------------------------------------
Expenses:
 Interest:
  Nonaffiliates                                               8,400     21,500
 Depreciation and amortization                              124,900    126,100
 Property operating:
  Affiliates                                                  1,600      3,700
  Nonaffiliates                                             306,700    296,900
 Real estate taxes                                          140,100    136,000
 Insurance--Affiliate                                        34,300     32,800
 Repairs and maintenance                                    115,200     94,700
 General and administrative:
  Affiliates                                                  2,200      3,100
  Nonaffiliates                                              30,900     32,100
------------------------------------------------------------------------------
                                                            764,300    746,900
------------------------------------------------------------------------------
Income before state income tax expense                      160,200    287,000
State income tax expense                                      8,000      5,000
------------------------------------------------------------------------------
Net income                                                 $152,200 $  282,000
------------------------------------------------------------------------------
Net income allocated to General Partner                    $  1,500 $    2,900
------------------------------------------------------------------------------
Net income allocated to Limited Partners                   $150,700 $  279,100
------------------------------------------------------------------------------
Net income allocated to Limited Partners per Unit (57,621
 Units outstanding)                                        $   2.62 $     4.84
------------------------------------------------------------------------------
</TABLE>
STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2001 and 2000
(Unaudited)
(All dollars rounded to nearest 00s)

<TABLE>
<CAPTION>
                                                           2001        2000
-------------------------------------------------------------------------------
<S>                                                     <C>         <C>
Cash flows from operating activities:
 Net income                                             $  421,900  $  555,300
 Adjustments to reconcile net income
  to net cash provided by
  operating activities:
  Depreciation and amortization                            245,400     252,200
  Changes in assets and liabilities:
   Decrease in rents receivable                            373,400     283,700
   Decrease in other assets                                              6,600
   Increase (decrease) in accounts payable and accrued
    expenses                                                 7,000     (25,600)
   Increase (decrease) in due to Affiliates                  1,900      (4,000)
   (Decrease) in prepaid rent                              (61,700)    (90,300)
   (Decrease) in state income
    taxes payable                                           (9,000)   (285,000)
   Increase in other liabilities                             4,400         600
-------------------------------------------------------------------------------
    Net cash provided by
     operating activities                                  983,300     693,500
-------------------------------------------------------------------------------
Cash flows from investing activities:
 Decrease in investments in debt securities                            964,200
 Payments for capital and tenant improvements             (303,700)    (43,400)
-------------------------------------------------------------------------------
   Net cash (used for) provided by investing activities   (303,700)    920,800
-------------------------------------------------------------------------------
Cash flows from financing activities:
 Principal payments on mortgage
  loans payable                                           (204,100)   (275,500)
 Distributions paid to Partners                           (461,100)   (230,500)
 (Decrease) increase in security deposits                   (1,400)        300
-------------------------------------------------------------------------------
    Net cash (used for)
     financing activities                                 (666,600)   (505,700)
-------------------------------------------------------------------------------
Net increase in cash and cash equivalents                   13,000   1,108,600
Cash and cash equivalents at the beginning of the
 period                                                  6,468,400   5,566,500
-------------------------------------------------------------------------------
Cash and cash equivalents at the end of
 the period                                             $6,481,400  $6,675,100
-------------------------------------------------------------------------------
Supplemental information:
 Interest paid to nonaffiliates                         $   18,800  $   45,500
-------------------------------------------------------------------------------
</TABLE>
    The accompanying notes are an integral part of the financial statements
5
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(Unaudited)
June 30, 2001

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

DEFINITION OF SPECIAL TERMS:
Capitalized terms used in this report have the same meaning as those terms have
in the Partnership's Registration Statement filed with the Securities and
Exchange Commission on Form S-11. Definitions of these terms are contained in
Article III of the First Amended and Restated Certificate and Agreement of
Limited Partnership, which is included in the Registration Statement and
incorporated herein by reference.

ACCOUNTING POLICIES:
The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States ("GAAP"). The Partnership
utilizes the accrual method of accounting. Under this method, revenues are
recorded when earned and expenses are recorded when incurred. The Partnership
recognizes rental income, which is contingent upon tenants' achieving specified
targets only to the extent that such targets are attained.

Preparation of the Partnership's financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

The financial information included in these financial statements is unaudited;
however, in management's opinion, all adjustments (consisting of only normal,
recurring accruals) necessary for a fair presentation of the results of
operations for the periods included have been made. Results of operations for
the quarter and six months ended June 30, 2001 are not necessarily indicative
of the operating results for the year ending December 31, 2001.

The Partnership has one reportable segment as the Partnership is in the
disposition phase of its life cycle, wherein it is seeking to liquidate its
remaining operating asset. Management's focus, therefore, is to prepare its
asset for sale and find a purchaser for the remaining asset when market
conditions warrant such an action.

Commercial rental property held for investment is recorded at cost, net of any
provisions for value impairment, and depreciated (exclusive of amounts
allocated to land) on the straight-line method over its estimated useful life.
Upon classifying a commercial rental property as Held for Disposition, no
further depreciation or amortization of such property is provided for in the
financial statements. Lease acquisition fees are recorded at cost and amortized
on the straight-line method over the life of each respective lease. Repair and
maintenance costs are expensed as incurred; expenditures for improvements are
capitalized and depreciated on the straight-line method over the estimated life
of such improvements.

The Partnership evaluates its commercial rental property for impairment when
conditions exist which may indicate that it is probable that the sum of
expected future cash flows (undiscounted) from a property is less than its
carrying basis. Upon determination that an impairment has occurred, the
carrying basis in the rental property is reduced to its estimated fair value.
Management was not aware of any indicator that would result in a significant
impairment loss during the periods reported.

Loan acquisition costs are amortized over the term of the mortgage loan made in
connection with the acquisition of Partnership properties or refinancing of
Partnership loans. When a property is disposed of or a loan is refinanced, the
related loan acquisition costs and accumulated amortization are removed from
the respective accounts and any unamortized balance is expensed.

Cash equivalents are considered all highly liquid investments with a maturity
of three months or less when purchased.

Reference is made to the Partnership's Annual Report for the year ended
December 31, 2000, for a description of other accounting policies and
additional details of the Partnership's financial condition, results of
operations, changes in Partners' capital and changes in cash balances for the
year then ended. The details provided in the notes thereto have not changed
except as a result of normal transactions in the interim or as otherwise
disclosed herein.

2. RELATED PARTY TRANSACTIONS:

In accordance with the Partnership Agreement, Net Profits and Net Losses
(exclusive of Net Profits and Net Losses from the sale, disposition or
provision for value impairment of Partnership properties) shall be allocated 1%
to the General Partner and 99% to the Limited Partners. Net Profits from the
sale or disposition of a Partnership property are allocated: first, prior to
giving effect to any distributions of Sale or Refinancing Proceeds from the
transaction, to the General Partner and Limited Partners with negative balances
in their Capital Accounts, pro rata in proportion to such respective negative
balances, to the extent of the total of such negative balances; second, to each
Limited Partner in an amount, if any, necessary to make the positive balance in
its Capital Account equal to the Sale or Refinancing Proceeds to be distributed
to such Limited Partner with respect to the sale or disposition of such
property; third, to the General Partner in an amount, if any, necessary to make
the positive balance in its Capital Account equal to the Sale or Refinancing
Proceeds to be distributed to the General Partner with respect to the sale or
disposition of such property; and fourth, the balance, if any, 25% to the
General Partner and 75% to the Limited Partners. Net Losses from the sale,
disposition or provision for value impairment of Partnership properties are
allocated: first, after giving effect to any distributions of Sale or
Refinancing Proceeds from the transaction, to the General Partner and Limited
Partners with positive balances in their Capital Accounts, pro rata in
proportion to such respective positive balances, to the extent of the total
amount of such positive balances; and second, the balance, if any, 1% to the
General Partner and 99% to the Limited Partners. Notwithstanding anything to
the contrary, there shall be allocated to the General Partner not less than 1%
of all items of Partnership income, gain, loss, deduction and credit during the
existence of the Partnership. For the quarter and six months ended June 30,
2001 the General Partner was allocated Net Profits of $1,500 and $4,200,
respectively. For the quarter and six months ended June 30, 2000, the General
Partner was allocated Net Profits of $2,900 and $5,600, respectively.

                                                                               6
<PAGE>

Fees and reimbursements paid and payable by the Partnership to Affiliates
during the quarter and six months ended June 30, 2001 were as follows:

<TABLE>
<CAPTION>
                                                   Paid
                                              ---------------
                                                        Six
                                              Quarter Months  Payable
---------------------------------------------------------------------
<S>                                           <C>     <C>     <C>
Asset management fees                         $ 1,600 $ 3,500   None
Reimbursement of property insurance premiums   34,300  52,600   None
Reimbursement of expenses, at cost:
 --Investor communications                      1,000   2,100 $3,200
---------------------------------------------------------------------
                                              $36,900 $58,200 $3,200
---------------------------------------------------------------------
</TABLE>

3. FRONT-END FEES LOAN PAYABLE TO AFFILIATE:

The Partnership borrowed $8,295,200 from an Affiliate of the General Partner,
an amount needed for the payment of securities sales commissions, Offering and
Organizational Expenses and other Front-End Fees, other than Acquisition Fees.
Repayment of the principal amount of the Front-End Fees loan is subordinated
(the "Subordination") to payment to the Limited Partners of 100% of their
Original Capital Contribution from Sale or Refinancing Proceeds (as defined in
the Partnership Agreement). In the event that the Front-End Fees loan is not
repaid, such amount will be written off to Partners' Capital.

Pursuant to a modification of this loan agreement, beginning January 1, 1996,
the Partnership elected to defer payment of interest of the Front-End Fees
Loan. During the year ended December 31, 1999, the Affiliate of the General
Partner elected to waive the Partnership's obligation for all outstanding
deferred interest on this loan and charge no interest in the future.

4. MORTGAGE LOAN PAYABLE:

Mortgage loan payable at June 30, 2001 and December 31, 2000 consisted of the
following non-recourse loan:

<TABLE>
<CAPTION>
   Property                          Average
  Pledged as    Principal Balance at Interest Maturity
  Collateral    6/30/2001 12/31/2000   Rate     Date
---------------------------------------------------------
<S>             <C>       <C>        <C>      <C>
Marquette Mall  $364,300   $568,400   7.75%   7/1/2002(a)
---------------------------------------------------------
</TABLE>
(a) Upon 30 days written notice by Lender, loan is due in full.

For additional information regarding the mortgage loan payable, see notes to
the financial statements in the Partnership's Annual Report for the year ended
December 31, 2000.
TRANSFER AGENT AND REGISTRAR
MMS ESCROW & TRANSFER AGENCY, INC.
P.O. Box 7090
Troy, Michigan 48007-7090
(800) 447-7364
<PAGE>

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

Reference is made to the Partnership's Annual Report for the year ended
December 31, 2000 for a discussion of the Partnership's business.

Statements contained in this Management's Discussion and Analysis of Financial
Condition and Results of Operations, which are not historical facts, may be
forward-looking statements. Such statements are subject to certain risks and
uncertainties, which could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of the date hereof.

One of the Partnership's objectives is to dispose of its properties when market
conditions allow for the achievement of the maximum possible sales price. The
Partnership, in addition to being in the operation of properties phase, is in
the disposition phase of its life cycle. During the disposition phase of the
Partnership's life cycle, comparisons of operating results are complicated due
to the timing and effect of property sales. Components of the Partnership's
operating results are generally expected to decline as real property interests
are sold since the Partnership no longer realizes income nor incurs expenses
from such real property interests.

OPERATIONS
The table below is a recap of the Partnership's share of Marquette Mall and
Office Building ("Marquette") for the quarters and six months ended June 30,
2001 and 2000. The discussion following the table should be read in conjunction
with the financial statements and notes thereto appearing in this report.

<TABLE>
<CAPTION>
                        Comparative Operating Results (a)
                     For the Quarters   For the Six Months
                           Ended               Ended
                     6/30/01  6/30/00   6/30/01    6/30/00
------------------------------------------------------------
<S>                  <C>      <C>      <C>        <C>
MARQUETTE MALL AND OFFICE BUILDING
Rental revenues      $854,300 $933,100 $1,873,100 $1,978,100
------------------------------------------------------------
Property net income  $123,200 $213,500 $  342,000 $  433,500
------------------------------------------------------------
Average occupancy         78%      81%        78%        81%
------------------------------------------------------------
</TABLE>
(a) Excludes certain income and expense items which are not directly related to
    individual property operating results such as interest income, interest
    expense on the Partnership's Front-End Fees loan and general and
    administrative expenses or are related to properties disposed of by the
    Partnership prior to the periods under comparison.

Net income for the Partnership decreased by $129,800 and $133,400 for the
quarter and six months ended June 30, 2001 when compared to the quarter and six
months ended June 30, 2000, respectively. The decreases were primarily due to
the decline in operating results at Marquette. In addition the decreases were
due to a decrease in interest earned on the Partnership's short-term
investments, which was due to a decrease in the rates earned on those
investments.

The following comparative discussion includes only the operating results of
Marquette.

Rental revenues decreased by $78,800 or 8.4% and $105,000 or 5.3 for the
quarter and six months ended June 30, 2001 when compared to the quarter and six
months ended June 30, 2000, respectively. The decreases were primarily due to
the decrease in base rental income, which was partially offset by an increase
in short-term rental income.

Interest expense on the Partnership's mortgage loans decreased by $13,100 and
$26,700 for the quarter and six months ended June 30, 2001 when compared to the
quarter and six months ended June 30, 2000, respectively. The decreases were
primarily due to the 2000 repayment of the mortgage loan collateralized by
Marquette Office Building.

Property operating expenses increased by $25,700 for the six-months ended June
30, 2001 when compared to the six-months ended June 30, 2000. The increase was
primarily due to an increase in utility costs, which was partially offset by a
decrease in advertising. Property operating expenses remained relatively
unchanged for the quarterly periods under comparison.

Repair and maintenance expenses increased by $20,500 for the quarter ended June
30, 2001 when compared to the quarter ended June 30, 2000. The increase was
primarily due to an increase in repairs to the exterior and interior of
Marquette. Repair and maintenance expenses remained relatively unchanged for
the six-month periods under comparison.

To increase and/or maintain occupancy levels at the Partnership's remaining
property, the General Partner, through its asset and property management
groups, continues to take the following actions: 1) implementation of marketing
programs, including hiring of third-party leasing agents or providing on-site
leasing personnel, advertising, direct mail campaigns and development of
property brochures; 2) early renewal of existing tenants' leases and addressing
any expansion needs these tenants may have; 3) promotion of local broker events
and networking with local brokers; 4) networking with national level retailers;
5) cold-calling other businesses and tenants in the market area and 6)
providing rental concessions or competitively pricing rental rates depending on
market conditions.

LIQUIDITY AND CAPITAL RESOURCES
One of the Partnership's objectives is to dispose of its property when market
conditions allow for the achievement of the maximum possible sales price. In
the interim, the Partnership continues to manage and maintain its property.
Notwithstanding the Partnership's intention relative to property sales, another
primary objective of the Partnership is to provide cash distributions to
Partners from Partnership operations. To the extent cumulative cash
distributions exceed net income, such excess distributions will be treated as a
return of capital. Cash Flow (as defined in the Partnership Agreement) is
generally not equal to net income or cash flows as determined by accounting
principles generally accepted in the United States ("GAAP"), since certain
items are treated differently under the Partnership Agreement than under GAAP.
Management believes that to facilitate a clear understanding of the
Partnership's operations, an analysis of Cash Flow (as defined in the
Partnership Agreement) should be examined in conjunction with an analysis of
net income or cash flows as determined by GAAP. The following table includes a
reconciliation of Cash Flow (as defined in the Partnership Agreement) to cash
flow provided by operating activities as determined by GAAP. Such amounts are
not indicative of actual distributions to Partners and should not be considered
as an alternative to the results disclosed in the Statements of Income and
Expenses and Statements of Cash Flow.

                                                                               2
<PAGE>

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

<TABLE>
<CAPTION>
                             Comparative Cash Flow Results
                               For the Six Months Ended
                               6/30/2001       6/30/2000
------------------------------------------------------------
<S>                          <C>             <C>
Cash Flow (as defined in
 the Partnership Agreement)  $      463,200  $      532,000
Items of reconciliation:
 Scheduled principal
  payments on mortgage
  loans payable                     204,100         275,500
 Decrease in current
  assets                            373,400         290,300
 (Decrease) in current
  liabilities                       (57,400)       (404,300)
------------------------------------------------------------
Net cash provided by
 operating activities        $      983,300  $      693,500
------------------------------------------------------------
Net cash (used for)
 provided by
 investing activities        $     (303,700) $      920,800
------------------------------------------------------------
Net cash (used for)
 financing activities        $     (666,600) $     (505,700)
------------------------------------------------------------
</TABLE>

Cash Flow (as defined in the Partnership Agreement) decreased by $68,800 for
the six months ended June 30, 2001 when compared to the six months ended June
30, 2000. The decrease was primarily the result of the decrease in net income.
The decrease was partially offset by a decrease in principal payments on the
Partnership's mortgage loan obligations.

The net increase in the Partnership's cash position of $13,000 for the six
months ended June 30, 2001 was due to net cash provided by operating activities
exceeding cash distributed to Limited Partners, payments for capital and tenant
improvements and payments made on the Partnership's mortgage loan payable.
Liquid assets of the Partnership as of June 30, 2001 were comprised of amounts
held for working capital purposes.

The increase in net cash provided by operating activities for the comparable
six-month periods of $289,800 was primarily due to the timing of the payment of
certain Partnership expenses as well as the timing of the receipt of rental
income at Marquette. The increase was partially offset by the decrease in net
income as previously discussed.

Net cash provided by investing activities changed from $920,800 for the six
months ended June 30, 2000 to $(303,700) for the six months ended June 30,
2001. The change was primarily due to the 2000 maturities of certain of the
Partnership's investments in debt securities.

The Partnership maintains working capital reserves to pay for capital
expenditures such as building and tenant improvements and leasing costs. During
the six months ended June 30, 2001, the Partnership spent $303,700 for capital
and tenant improvements and leasing costs and has projected to spend
approximately $300,000 during the remainder of 2001. Actual amounts expended
may vary depending on a number of factors including actual leasing activity,
results of property operations and other market conditions throughout the year.
The General Partner believes that these improvements and leasing costs are
necessary in order to increase and/or maintain occupancy levels in a very
competitive market, maximize rental rates charged to new and renewing tenants
and to prepare the remaining property for eventual disposition.

The Partnership has no financial instruments for which there are significant
risks.

Net cash used for financing activities increased by $160,900 for the six months
ended June 30, 2001 when compared to the six months ended June 30, 2000. The
increase was primarily due to an increase in distributions to Limited Partners,
which was due to the reinstatement of Cash Flow (as defined in the Partnership
Agreement) distributions in 2000. The increase was partially offset by a
decrease in principal payments on the Partnership's mortgage obligations.

Pursuant to a modification of the Partnership's Front-End Fees loan agreement,
the Affiliate of the General Partner has elected to waive the Partnership's
obligation for all deferred interest on this loan and charge no interest in the
future.

The Partnership's mortgage loan outstanding is callable upon thirty days notice
from lender.

The General Partner continues to take a conservative approach to projections of
future rental income in its determination of adequate levels of cash reserves
due to the anticipated capital, tenant improvement and leasing costs. The
General Partner believes that Cash Flow (as defined in the Partnership
Agreement) is the best and least expensive source of cash. As a result, cash
continues to be retained to supplement working capital reserves. For the six
months ended June 30, 2001, Cash Flow (as defined in the Partnership Agreement)
retained to supplement working capital reserves amounted to $2,200.

Distributions to Limited Partners for the quarter ended June 30, 2001 were
declared in the amount of $230,500 or $4.00 per Unit. Cash distributions are
made 60 days after the last day of each fiscal quarter. The amount of future
distributions to Limited Partners will ultimately be dependent upon the
performance of Marquette as well as the General Partner's determination of the
amount of cash necessary to supplement working capital reserves to meet future
liquidity requirements of the Partnership. Accordingly, there can be no
assurance as to the amounts of cash for future distributions to Limited
Partners.

Based upon the current estimated value of its assets, net of its outstanding
liabilities, together with its expected operating results and capital
expenditure requirements, the General Partner believes that the Partnership's
cumulative distributions to its Limited Partners from inception through the
termination of the Partnership will be substantially less than such Limited
Partners' Original Capital Contribution.

3
<PAGE>

PART II. OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:

(a) Exhibits: None

(b) Reports on Form 8-K:

There were no reports filed on Form 8-K for the three months ended June 30,
2001.

8
<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.

                                     FIRST CAPITAL INCOME PROPERTIES, LTD.--
                                     SERIES XI

                                     By: FIRST CAPITAL FINANCIAL LLC
                                        GENERAL PARTNER

                                               /s/ DOUGLAS CROCKER II
Date: August 14, 2001                By: ______________________________________
                                                   DOUGLAS CROCKER II
                                         PRESIDENT AND CHIEF EXECUTIVE OFFICER

                                               /s/ PHILIP G. TINKLER
Date: August 14, 2001                By:  _____________________________________
                                                   PHILIP G. TINKLER
                                         VICE PRESIDENT--FINANCE AND TREASURER

                                                                               9