FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                  For the quarterly period ended June 30, 1999
   --------------------------------------------------------------------------

                                       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
                                     0-23968
                     ---------------------------------------


                           CNL Income Fund XIII, Ltd.
 -----------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>

<S> <C>
                       Florida                                                        59-3143094
------------------------------------------------------              ------------------------------------------------
(State or other jurisdiction of                                                    (I.R.S. Employer
incorporation or organization)                                                    Identification No.)


400 East South Street
Orlando, Florida                                                                         32801
------------------------------------------------------              ------------------------------------------------
      (Address of principal executive offices)                                        (Zip Code)


Registrant's telephone number
(including area code)                                                               (407) 650-1000
                                                                    ------------------------------------------------

</TABLE>

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  13 or 15(d)  of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes X No _________




<PAGE>


                                    CONTENTS





Part I                                                                     Page

   Item 1.    Financial Statements:

                  Condensed Balance Sheets

                  Condensed Statements of Income

                  Condensed Statements of Partners' Capital

                  Condensed Statements of Cash Flows

                  Notes to Condensed Financial Statements

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

   Item 3.   Quantitative and Qualitative Disclosures About Market
                  Risk

Part II

   Other Information


<PAGE>
                           CNL INCOME FUND XIII, LTD.
                         (A Florida Limited Partnership)
                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>


                                                                               June 30,              December 31,
                                                                                 1999                    1998
                                                                          -------------------     -------------------
<S> <C>
                               ASSETS

   Landand  buildings on operating  leases,  less
       accumulated  depreciation  of $2,299,486 and
       $2,107,624, respectively, and allowance for loss
       on building   of $297,885 in 1999 and 1998                               $ 22,393,406            $ 22,945,358
   Net investment in direct financing leases                                       7,508,202               6,951,890
   Investment in joint ventures                                                    2,447,615               2,451,336
   Cash and cash equivalents                                                         682,240                 766,859
   Receivables, less allowance for doubtful
       accounts of $1,734 and $532, respectively                                      78,930                 121,119
   Prepaid expenses                                                                   16,322                   8,453
   Lease costs, less accumulated
       amortization of $887 in 1999                                                   34,863                  17,875
   Accrued rental income                                                           1,532,130               1,424,603
                                                                          -------------------     -------------------

                                                                                $ 34,693,708            $ 34,687,493
                                                                          ===================     ===================

                  LIABILITIES AND PARTNERS' CAPITAL

   Accounts payable                                                               $   88,908              $    4,068
   Accrued construction costs payable                                                600,000                      --
   Accrued and escrowed real estate taxes payable                                      8,229                   6,923
   Distributions payable                                                             850,002                 850,002
   Due to related parties                                                             48,066                  22,529
   Rents paid in advance and deposits                                                 34,318                  54,568
                                                                          -------------------     -------------------
       Total liabilities                                                           1,629,523                 938,090

   Commitments and Contingencies (Note 3)

   Partners' capital                                                              33,064,185              33,749,403
                                                                          -------------------     -------------------

                                                                                $ 34,693,708            $ 34,687,493
                                                                          ===================     ===================

</TABLE>


           See accompanying notes to condensed financial statements.


<PAGE>


                           CNL INCOME FUND XIII, LTD.
                         (A Florida Limited Partnership)
                         CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>


                                                                  Quarter Ended                    Six Months Ended
                                                                     June 30,                          June 30,
                                                              1999             1998             1999             1998
                                                           ------------     ------------     ------------     -------------
<S> <C>
Revenues:
    Rental income from operating leases                      $ 600,198        $ 613,911       $1,196,643      $ 1,232,426
    Adjustments to accrued rental income                            --         (311,118 )             --         (311,118  )
    Earned income from direct financing leases                 196,996          198,185          389,946          415,220
    Contingent rental income                                    69,638           75,085          110,243          141,008
    Interest and other income                                    6,225           12,991           12,993           33,186
                                                           ------------     ------------     ------------     -------------
                                                               873,057          589,054        1,709,825        1,510,722
                                                           ------------     ------------     ------------     -------------

Expenses:
    General operating and administrative                        33,055           40,490           74,574           70,584
    Professional services                                        8,954            6,230           20,993           14,635
    Bad debt expense                                               615               --              615               --
    Management fees to related party                             9,181            8,821           17,777           17,774
    Real estate taxes                                            4,979            2,888           13,319            2,888
    State and other taxes                                           --              231           21,476           16,184
    Depreciation and amortization                               96,830           97,995          200,671          196,413
    Transaction costs                                           80,702               --          113,883               --
                                                           ------------     ------------     ------------     -------------
                                                               234,316          156,655          463,308          318,478
                                                           ------------     ------------     ------------     -------------

Income Before Equity in Earnings of Joint
    Ventures and Loss on Demolition of Building                638,741          432,399        1,246,517        1,192,244

Equity in Earnings of Joint Ventures                            60,327           57,175          120,554          121,482

Loss on Demolition of Building                                (352,285 )             --         (352,285 )             --
                                                           ------------     ------------     ------------     -------------

Net Income                                                   $ 346,783        $ 489,574       $1,014,786      $ 1,313,726
                                                           ============     ============     ============     =============

Allocation of Net Income:
    General partners                                          $  5,348         $  4,895         $ 12,028        $  13,137
    Limited partners                                           341,435          484,679        1,002,758        1,300,589
                                                           ------------     ------------     ------------     -------------

                                                             $ 346,783        $ 489,574       $1,014,786      $ 1,313,726
                                                           ============     ============     ============     =============

Net Income Per Limited Partner Unit                           $   0.09         $   0.12         $   0.25        $    0.33
                                                           ============     ============     ============     =============

Weighted Average Number of Limited Partner
    Units Outstanding                                        4,000,000        4,000,000        4,000,000        4,000,000
                                                           ============     ============     ============     =============
</TABLE>



           See accompanying notes to condensed financial statements.

<PAGE>


                           CNL INCOME FUND XIII, LTD.
                         (A Florida Limited Partnership)
                    CONDENSED STATEMENTS OF PARTNERS' CAPITAL
<TABLE>
<CAPTION>


                                                                           Six Months Ended              Year Ended
                                                                               June 30,                 December 31,
                                                                                 1999                       1998
                                                                        -----------------------     ----------------------
<S> <C>
General partners:
    Beginning balance                                                            $     163,874               $    137,207
    Net income                                                                          12,028                     26,667
                                                                        -----------------------     ----------------------
                                                                                       175,902                    163,874
                                                                        -----------------------     ----------------------

Limited partners:
    Beginning balance                                                               33,585,529                 34,516,349
    Net income                                                                       1,002,758                  2,469,188
    Distributions ($0.43 and $0.85 per
       limited partner unit, respectively)                                          (1,700,004 )               (3,400,008 )
                                                                        -----------------------     ----------------------
                                                                                    32,888,283                 33,585,529
                                                                        -----------------------     ----------------------

Total partners' capital                                                         $   33,064,185             $   33,749,403
                                                                        =======================     ======================
</TABLE>


           See accompanying notes to condensed financial statements.

<PAGE>


                           CNL INCOME FUND XIII, LTD.
                         (A Florida Limited Partnership)
                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                  Six Months Ended
                                                                                      June 30,
                                                                              1999                 1998
                                                                         ----------------     ---------------
<S> <C>
Increase (Decrease) in Cash and Cash Equivalents

    Net Cash Provided by Operating Activities                                 $1,633,260          $1,733,901
                                                                         ----------------     ---------------

    Cash Flows from Investing Activities:
       Payment of lease costs                                                    (17,875 )                --
                                                                         ----------------     ---------------
          Net cash used in investing activities                                  (17,875 )                --
                                                                         ----------------     ---------------

    Cash Flows from Financing Activities:
       Distributions to limited partners                                      (1,700,004 )        (1,700,004 )
                                                                         ----------------     ---------------
              Net cash used in financing activities                           (1,700,004 )        (1,700,004 )
                                                                         ----------------     ---------------

Net Increase (Decrease) in Cash and Cash Equivalents                             (84,619 )            33,897

Cash and Cash Equivalents at Beginning of Period                                 766,859             907,980
                                                                         ----------------     ---------------

Cash and Cash Equivalents at End of Period                                     $ 682,240           $ 941,877
                                                                         ================     ===============

Supplemental Schedule of Non-Cash Investing
    and Non-Cash Financing Activities:

       Construction costs incurred and unpaid at end of
          period                                                               $ 600,000              $   --
                                                                         ================     ===============

       Distributions declared and unpaid at end of
          period                                                               $ 850,002           $ 850,002
                                                                         ================     ===============
</TABLE>


           See accompanying notes to condensed financial statements.


<PAGE>

                           CNL INCOME FUND XIII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
              Quarters and Six Months Ended June 30, 1999 and 1998


1.       Basis of Presentation:

         The accompanying  unaudited  condensed  financial  statements have been
         prepared in accordance  with the  instructions  to Form 10-Q and do not
         include  all  of the  information  and  note  disclosures  required  by
         generally  accepted  accounting  principles.  The financial  statements
         reflect all adjustments,  consisting of normal  recurring  adjustments,
         which are, in the opinion of management,  necessary to a fair statement
         of the results for the interim periods presented. Operating results for
         the quarter and six months ended June 30, 1999,  may not be  indicative
         of the results  that may be expected  for the year ending  December 31,
         1999.  Amounts as of  December  31,  1998,  included  in the  financial
         statements,  have been derived from audited financial  statements as of
         that date.

         These unaudited financial statements should be read in conjunction with
         the financial statements and notes thereto included in Form 10-K of CNL
         Income Fund XIII, Ltd. (the  "Partnership") for the year ended December
         31, 1998.

2.       Land and Buildings:

         In November  1998,  the  Partnership  entered  into a new lease for the
         property in Tampa, Florida with a new tenant to operate the property as
         a Steak-N-Shake restaurant. In connection with the new lease agreement,
         during the six months ended June 30, 1999, the building  located on the
         Partnership's  property was demolished.  As a result, the undepreciated
         cost  of the  building  of  $352,285  was  charged  to net  income  for
         financial reporting purposes.

3.       Commitments and Contingencies:

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
         of Merger with CNL American Properties Fund, Inc. ("APF"),  pursuant to
         which the Partnership would be merged with and into a subsidiary of APF
         (the  "Merger").  As  consideration  for the Merger,  APF has agreed to
         issue 1,943,093  shares of its common stock,  par value $0.01 per share
         (the "APF  Shares")  which,  for the  purposes  of  valuing  the merger
         consideration,  have been  valued by APF at $20.00 per APF  Share,  the
         price  paid by APF  investors  (after an  adjustment  for a one for two
         reverse stock split effective on June 3, 1999) in three previous public
         offerings,  the most recent of which was completed in December 1998. In
         order to assist the general  partners in evaluating the proposed merger
         consideration,  the general partners retained Valuation  Associates,  a
         nationally  recognized  real estate  appraisal  firm,  to appraise  the
         Partnership's   restaurant  property  portfolio.   Based  on  Valuation
         Associates'  appraisal,  the Partnership's property portfolio and other
         assets were valued on a going  concern basis  (meaning the  Partnership
         continues  unchanged) at  $38,283,180  as of December 31, 1998. The APF
         Shares  are  expected  to be listed  for  trading on the New York Stock
         Exchange concurrently with the consummation


<PAGE>


                           CNL INCOME FUND XIII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
              Quarters and Six Months Ended June 30, 1999 and 1998


3.       Commitments and Contingencies - Continued:

         of the Merger, and therefore, would be freely tradable at the option of
         the former limited partners.  At a special meeting of the partners that
         is expected to be held in the fourth quarter of 1999,  limited partners
         holding  in  excess  of 50% of the  Partnership's  outstanding  limited
         partnership  interests must approve the Merger prior to consummation of
         the transaction. If the limited partners at the special meeting approve
         the  Merger,  APF will  own the  properties  and  other  assets  of the
         Partnership.  The general partners intend to recommend that the limited
         partners of the  Partnership  approve the Merger.  In  connection  with
         their recommendation,  the general partners will solicit the consent of
         the limited  partners at the special  meeting.  If the limited partners
         reject  the  Merger,  the  Partnership  will  bear the  portion  of the
         transaction  costs  based upon the  percentage  of "For"  votes and the
         general partners will bear the portion of such transaction  costs based
         upon the percentage of "Against" votes and abstentions.

         On May 11,  1999,  four  limited  partners in several of the CNL Income
         Funds  served  a  lawsuit  against  the  general  partners  and  APF in
         connection  with the proposed  Merger.  On July 8, 1999, the plaintiffs
         amended  the  complaint  to add three  additional  limited  partners as
         plaintiffs.  Additionally,  on June 22,  1999,  a  limited  partner  in
         certain of the CNL Income  Funds  served a lawsuit  against the general
         partners, APF and CNL Fund Advisors, Inc. and certain of its affiliates
         in connection with the proposed  Merger.  The general  partners and APF
         believe  that the  lawsuits  are  without  merit  and  intend to defend
         vigorously against the claims. See Part II - Item 1. Legal Proceedings.

         In May 1999, the Partnership  entered into a new lease for the property
         in  Philadelphia,  Pennsylvania,  with  a new  tenant  to  operate  the
         property  as  an  Arby's  restaurant.   In  connection  therewith,  the
         Partnership  agreed to pay up to $433,000 in renovation  costs, none of
         which have been incurred as of June 30, 1999.

4.       Subsequent Event:

         In July 1999, the Partnership sold its property in Houston, Texas, to a
         third  party  for   $1,073,887  and  received  net  sales  proceeds  of
         $1,063,318,  resulting  in a gain of $176,159 for  financial  reporting
         purposes.




<PAGE>


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

         CNL Income Fund XIII,  Ltd. (the  "Partnership")  is a Florida  limited
partnership  that was  organized  on September  25,  1992,  to acquire for cash,
either directly or through joint venture  arrangements,  both newly  constructed
and existing  restaurants,  as well as properties upon which restaurants were to
be constructed  (the  "Properties"),  which are leased primarily to operators of
national and regional  fast-food and family-style  restaurant chains. The leases
are generally triple-net leases, with the lessees generally  responsible for all
repairs and maintenance, property taxes, insurance and utilities. As of June 30,
1999,  the  Partnership  owned 47 Properties,  which  included  interests in two
Properties owned by joint ventures in which the Partnership is a co-venturer and
three   Properties   owned  with   affiliates   of  the   general   partners  as
tenants-in-common.

Capital Resources

         The  Partnership's  primary  source of capital for the six months ended
June 30, 1999 and 1998 was cash from  operations  (which  includes cash received
from tenants,  distributions from joint ventures,  and interest and other income
received, less cash paid for expenses).  Cash from operations was $1,633,260 and
$1,733,901  for the six months ended June 30, 1999 and 1998,  respectively.  The
decrease in cash from  operations  for the six months  ended June 30,  1999,  as
compared to the six months ended June 30, 1998, is primarily a result of changes
in the Partnership's working capital.

         In November  1998,  the  Partnership  entered  into a new lease for the
Property located in Tampa,  Florida with a new tenant to operate the Property as
a Steak-N-Shake restaurant.  In connection with the new lease agreement,  during
the six months ended June 30, 1999,  the building  located on the  Partnership's
Property was demolished.  As a result, the undepreciated cost of the building of
$352,285 was charged to net income for financial reporting purposes.  As of June
30,  1999,  a new  building had been  constructed  and became  operational.  The
Partnership  will use a portion of the net sales  proceeds  from the sale of the
Property in Houston, Texas, to pay such costs, as described below.

         In May 1999, the Partnership  entered into a new lease for the Property
in Philadelphia,  Pennsylvania,  with a new tenant to operate the property as an
Arby's restaurant. In connection with the lease the Partnership agreed to pay up
to $433,000 in renovation costs relating to this Property.  No such amounts have
been incurred as of June 30, 1999. The  Partnership  intends to use a portion of
the net sales proceeds from the sale of the Property in Houston,  Texas,  to pay
such costs, as described below.

         In July 1999, the Partnership sold its Property in Houston, Texas, to a
third party for  $1,073,887  and  received  net sales  proceeds  of  $1,063,318,
resulting  in  a  gain  of  $176,159  for  financial  reporting  purposes.   The
Partnership  intends  to use the net sales  proceeds  to pay for the  renovation
costs described above.

         Currently,  rental income from the Partnership's Properties and any net
sales proceeds from the sale of Properties,  pending the use of such proceeds to
pay  construction and renovation costs as described above, are invested in money
market accounts or other  short-term,  highly liquid  investments such as demand
deposits at commercial  banks,  certificates of deposit,  and money markets with
less than a 30-day maturity date. At June 30, 1999, the Partnership had


<PAGE>


$682,240  invested in such  short-term  investments,  as compared to $766,859 at
December  31,  1998.  The funds  remaining  at June 30, 1999 will be used to pay
distributions and other liabilities.

Short-Term Liquidity

         The Partnership's  short-term liquidity  requirements consist primarily
of the operating expenses of the Partnership.

         The Partnership's  investment strategy of acquiring Properties for cash
and  leasing  them  under  triple-net  leases to  operators  who meet  specified
financial standards minimizes the Partnership's  operating expenses. The general
partners  believe that the leases will  continue to generate cash flow in excess
of operating expenses.

         The general  partners have the right,  but not the obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the operations of the Partnership.

         The Partnership  generally  distributes cash from operations  remaining
after the payment of operating  expenses of the Partnership,  to the extent that
the general partners  determine that such funds are available for  distribution.
Based on current and future  anticipated cash from  operations,  the Partnership
declared distributions to the limited partners of $1,700,004 for each of the six
months ended June 30, 1999 and 1998 ($850,002 for each applicable quarter). This
represents distributions of $0.43 per unit for each applicable six months ($0.21
per unit for each applicable quarter). No distributions were made to the general
partners  for the  quarters  and six  months  ended June 30,  1999 and 1998.  No
amounts  distributed  to the limited  partners for the six months ended June 30,
1999 and 1998,  are required to be or have been treated by the  Partnership as a
return of capital for purposes of calculating  the limited  partners'  return on
their adjusted  capital  contributions.  The Partnership  intends to continue to
make distributions of cash available for distribution to the limited partners on
a quarterly basis.

         Total liabilities of the Partnership,  including distributions payable,
increased to  $1,629,523  at June 30, 1999,  from $938,090 at December 31, 1998,
primarily as a result of the Partnership accruing construction costs relating to
the Steak-N-Shake Property described above. Liabilities at June 30, 1999, to the
extent they exceed cash and cash equivalents at June 30, 1999, will be paid from
net sales proceeds from the sale of a Property,  as described above, future cash
from  operations,  or in the event the general  partners  elect to make  capital
contributions or loans, from future general partner contributions or loans.

Long-Term Liquidity

         The  Partnership  has no long-term  debt or other  long-term  liquidity
requirements.

Results of Operations

         During  each of the six  months  ended  June  30,  1999 and  1998,  the
Partnership  owned  and  leased 42  wholly  owned  Properties  to  operators  of
fast-food and family-style  restaurant chains.  During the six months ended June
30,  1999  and  1998,  the   Partnership   earned   $1,586,589  and  $1,336,528,
respectively,  in rental income from  operating  leases (net of  adjustments  to
accrued rental income) and earned income from direct financing leases from these
Properties, $797,194


<PAGE>


and  $500,978 of which was earned  during the  quarters  ended June 30, 1999 and
1998,  respectively.  Rental and earned  income was lower during the quarter and
six months ended June 30, 1998,  as compared to the quarter and six months ended
June 30, 1999, due to the fact that in June 1998, Long John Silver's, Inc. filed
for bankruptcy and rejected the leases relating to three of the eight Properties
it leased and ceased making rental payments on the three rejected  leases.  As a
result,  during the quarter and six months ended June 30, 1998, the  Partnership
wrote off accrued rental income (non-cash accounting adjustments relating to the
straight-lining  of future  scheduled  rent  increases  over the  lease  term in
accordance  with generally  accepted  accounting  principles)  relating to these
Properties.  No amounts were written-off during the quarter and six months ended
June 30,  1999.  The effect  from the  write-off  of accrued  rental  income was
partially  offset by the fact that the  Partnership  recorded  rental and earned
income  during the  quarter  and six months  ended June 30,  1998,  prior to the
tenant  vacating the  Properties  in June 1998.  No rental and earned income was
recognized during the quarter and six months ended June 30, 1999 from the former
tenant. The Partnership has continued to receive rental payments relating to the
leases not rejected by the tenant.

         Rental and earned  income  increased  during the quarter and six months
ended June 30, 1999, by approximately $46,500 and $85,000,  respectively, due to
the fact that the Partnership  re-leased two of these  Properties to new tenants
with rental payments commencing in December 1998 for one lease and June 1999 for
the other lease.  In May 1999,  the  Partnership  released the remaining  vacant
Property to a new tenant,  and intends to renovate the  Property  into an Arby's
restaurant, as described above in "Capital Resources." While Long John Silver's,
Inc.  has not rejected or affirmed the  remaining  five leases,  there can be no
assurance that some or all of the leases will not be rejected in the future. The
lost  revenues  that would  result in the event the  remaining  five  leases are
rejected  could  have an adverse  effect on the  results  of  operations  of the
Partnership if the  Partnership  is not able to re-lease  these  Properties in a
timely manner.

         During the six months  ended June 30,  1999 and 1998,  the  Partnership
also earned $110,243 and $141,008,  respectively,  in contingent  rental income,
$69,638 and $75,085 of which was earned during the quarters  ended June 30, 1999
and 1998,  respectively.  Contingent rental income was higher during the quarter
and six months  ended June 30,  1998,  as compared to the quarter and six months
ended June 30,  1999,  due to the fact that  during the  quarter  and six months
ended June 30, 1998,  the  Partnership  recorded  additional  contingent  rental
amounts as a result of adjusting estimated  contingent rental amounts accrued at
December 31, 1997, to actual amounts.

         During the six months  ended June 30,  1999 and 1998,  the  Partnership
also  owned  and  leased  two  Properties   indirectly   through  joint  venture
arrangements  and three  Properties with  affiliates of the general  partners as
tenants-in-common. In connection therewith, during the six months ended June 30,
1999 and 1998,  the  Partnership  earned  $120,554 and  $121,482,  respectively,
$60,327 and $57,175 of which was earned during the quarters  ended June 30, 1999
and 1998, respectively.

         Operating expenses,  including  depreciation and amortization  expense,
were  $463,308  and  $318,478  for the six months  ended June 30, 1999 and 1998,
respectively,  of which  $234,316  and $156,655  were  incurred for the quarters
ended June 30, 1999 and 1998,  respectively.  The increase in operating expenses
during the quarter and six months ended June 30, 1999,  is primarily  due to the
fact that the Partnership incurred $80,702 and $113,883,  during the quarter and
six months ended June 30, 1999,  respectively,  in transaction  costs related to
the general


<PAGE>


partners retaining financial and legal advisors to assist them in evaluating and
negotiating  the proposed  Merger with APF, as described  below.  If the limited
partners  reject  the  Merger,  the  Partnership  will bear the  portion  of the
transaction  costs  based upon the  percentage  of "For"  votes and the  general
partners  will  bear  the  portion  of such  transaction  costs  based  upon the
percentage of "Against" votes and abstentions.

         In addition,  the increase in operating  expenses during the six months
ended June 30,  1999,  as compared  to the six months  ended June 30,  1998,  is
partially  attributable to an increase in insurance,  legal fees and real estate
tax expenses as a result of Long John Silver's,  Inc.  filing for bankruptcy and
rejecting  the leases  relating to three  Properties  in June 1998, as described
above.  During 1998, the  Partnership  entered into two leases,  each with a new
tenant for two of the three vacant  Properties,  to operate the  Properties as a
Lions Choice  restaurant and a  Steak-N-Shake  restaurant.  In addition,  in May
1999,  the  Partnership  re-leased  the  remaining  Property to a new tenant and
intends to renovate the Property into an Arby's  restaurant,  as described above
in "Capital Resources." In accordance with the lease agreements,  the new tenant
of the Lions Choice Property became responsible for real estate taxes, insurance
and maintenance  relating to this Property during 1998 and the new tenant of the
Arby's  Property  became  responsible  for  these  expenses  in  May  1999.  The
Partnership will continue to incur these expenses  relating to the Property that
is expected to be converted  into a  Steak-N-Shake  until the conversion of this
Property is completed,  at which point this tenant will be responsible for these
expenses  under  the  terms  of its  lease.  The  Partnership  will  also  incur
additional  insurance  and real estate tax expenses if one or more of the leases
relating to the five  Properties  still leased by Long John  Silver's,  Inc. are
rejected.

Proposed Merger

         On March 11, 1999, the  Partnership  entered into an Agreement and Plan
of Merger with CNL American Properties Fund, Inc. ("APF"), pursuant to which the
Partnership would be merged with and into a subsidiary of APF (the "Merger"). As
consideration  for the Merger,  APF has agreed to issue 1,943,093  shares of its
common  stock,  par value  $0.01 per share  (the "APF  Shares")  which,  for the
purposes of valuing the merger consideration,  have been valued by APF at $20.00
per APF Share,  the price paid by APF investors  (after an adjustment  for a one
for two reverse stock split  effective  June 3, 1999) in three  previous  public
offerings,  the most recent of which was completed in December 1998. In order to
assist the general partners in evaluating the proposed merger consideration, the
general partners retained  Valuation  Associates,  a nationally  recognized real
estate  appraisal  firm,  to  appraise  the  Partnership's  restaurant  property
portfolio.  Based on Valuation Associates' appraisal, the Partnership's property
portfolio  and other assets were valued on a going  concern  basis  (meaning the
Partnership continues unchanged) at $38,283,180 as of December 31, 1998. The APF
Shares  are  expected  to be listed for  trading on the New York Stock  Exchange
concurrently with the consummation of the Merger, and therefore, would be freely
tradable at the option of the former limited  partners.  At a special meeting of
the partners that is expected to be held in the fourth quarter of 1999,  limited
partners  holding  in excess  of 50% of the  Partnership's  outstanding  limited
partnership  interests  must  approve the Merger  prior to  consummation  of the
transaction.  If the limited partners at the special meeting approve the Merger,
APF will own the  properties  and other assets of the  Partnership.  The general
partners  intend to  recommend  that the  limited  partners  of the  Partnership
approve  the  Merger.  In  connection  with their  recommendation,  the  general
partners  will  solicit  the  consent of the  limited  partners  at the  special
meeting. If the limited partners reject


<PAGE>


the Merger, the Partnership will bear the portion of the transaction costs based
upon the  percentage  of "For"  votes  and the  general  partners  will bear the
portion of such  transaction  costs based upon the percentage of "Against" votes
and abstentions.

         On May 11,  1999,  four  limited  partners in several of the CNL Income
Funds served a lawsuit  against the general  partners and APF in connection with
the proposed  Merger.  On July 8, 1999, the plaintiffs  amended the complaint to
add three additional limited partners as plaintiffs.  Additionally,  on June 22,
1999,  a limited  partner in certain  of the CNL Income  Funds  served a lawsuit
against the general partners, APF and CNL Fund Advisors, Inc. and certain of its
affiliates in connection with the proposed Merger.  The general partners and APF
believe  that the  lawsuits  are without  merit and intend to defend  vigorously
against the claims. See Part II - Item 1. Legal Proceedings.

Year 2000 Readiness Disclosure

         The Year  2000  problem  concerns  the  inability  of  information  and
non-information  technology  systems to  properly  recognize  and  process  date
sensitive  information  beyond  January  1,  2000.  As  of  June  30,  1999  the
Partnership did not have any information or non-information  technology systems.
The general  partners  and  certain of the  affiliates  of the general  partners
provide  all  services  requiring  the use of  information  and  non-information
technology systems pursuant to a management agreement with the Partnership.  The
information technology system of the affiliates of the general partners consists
of a network of personal computers and servers built using hardware and software
from  mainstream  suppliers.  The  non-information  technology  systems  of  the
affiliates of the general  partners are primarily  facility  related and include
building  security  systems,  elevators,  fire  suppressions,  HVAC,  electrical
systems and other  utilities.  The  affiliates  of the general  partners have no
internally generated programmed software coding to correct because substantially
all of the software utilized by the general partners and affiliates is purchased
or  licensed  from  external  providers.   The  maintenance  of  non-information
technology systems at the Partnership's  Properties is the responsibility of the
tenants of the  Properties  in  accordance  with the terms of the  Partnership's
leases.

         In early 1998, the general  partners and affiliates  formed a Year 2000
team, for the purpose of identifying,  understanding  and addressing the various
issues  associated  with the Year 2000  problem.  The Y2K Team  consists  of the
general  partners  and members  from  certain of the  affiliates  of the general
partners, including representatives from senior management, information systems,
telecommunications,   legal,   office   management,   accounting   and  property
management. The Y2K Team's initial step in assessing the Partnership's Year 2000
readiness  consists of  identifying  any systems  that are  date-sensitive  and,
accordingly,  could have potential  Year 2000  problems.  The Y2K Team is in the
process of conducting inspections, interviews and tests to identify which of the
Partnership's systems could have a potential Year 2000 problem.

         The  information  system of the  affiliates of the general  partners is
comprised of hardware  and  software  applications  from  mainstream  suppliers.
Accordingly, the Y2K Team is in the process of contacting the respective vendors
and  manufacturers  to verify the Year 2000  compliance  of their  products.  In
addition,  the Y2K Team has also requested and is evaluating  documentation from
other   companies  with  which  the  Partnership  has  a  material  third  party
relationship,   including  the   Partnership's   tenants,   vendors,   financial
institutions and the  Partnership's  transfer agent. The Partnership  depends on
its  tenants  for  rents  and  cash  flows,   its  financial   institutions  for
availability of cash and its transfer agent to maintain and track investor


<PAGE>


information.  The Y2K Team has also  requested and is  evaluating  documentation
from the  non-information  technology systems providers of the affiliates of the
general  partners.  Although the general  partners  continue to receive positive
responses  from the  companies  with  which  the  Partnership  has  third  party
relationships regarding their Year 2000 compliance,  the general partners cannot
be assured that the  tenants,  financial  institutions,  transfer  agent,  other
vendors and system  providers have adequately  considered the impact of the Year
2000. The general  partners are not able to measure the effect on the operations
of the Partnership of any third party's failure to adequately address the impact
of the Year 2000.

         The general  partners and their  affiliates  have  identified  and have
implemented  upgrades for certain hardware equipment.  In addition,  the general
partners and their  affiliates have  identified  certain  software  applications
which will require upgrades to become Year 2000 compliant.  The general partners
expect  that all of these  upgrades,  as well as any  other  necessary  remedial
measures on the information  technology systems used in the business  activities
and  operations  of the  Partnership,  to be completed  by  September  30, 1999,
although,  the general  partners  cannot be assured  that the upgrade  solutions
provided by the vendors  have  addressed  all  possible  Year 2000  issues.  The
general  partners  do not expect the  aggregate  cost of the Year 2000  remedial
measures to be material to the results of operations of the Partnership.

         The general partners and their  affiliates have received  certification
from the  Partnership's  transfer agent of its Year 2000 compliance.  Due to the
material  relationship of the Partnership  with its transfer agent, the Y2K Team
is evaluating the Year 2000  compliance of the systems of the transfer agent and
expects to have the  evaluation  completed  by September  30, 1999.  Despite the
positive  response  from the transfer  agent and the  evaluation of the transfer
agent's system by the Y2K Team, the general  partners cannot be assured that the
transfer  agent has addressed  all possible Year 2000 issues.  In the event that
the  systems of the  transfer  agent are not Year 2000  compliant,  the  general
partners and their  affiliates  will have to allocate  resources  to  internally
perform  the  functions  of the  transfer  agent.  The  general  partners do not
anticipate  that the additional  cost of these  resources  would have a material
impact on the Partnership.

         Based upon the progress the general  partners and their affiliates have
made in addressing  the Year 2000 issues and their plan and timeline to complete
the compliance  program,  the general partners do not foresee  significant risks
associated  with Year 2000  compliance  at this time.  The general  partners and
their affiliates plan to address their significant Year 2000 issues prior to the
Partnership  being  affected  by  them;  therefore,  we  have  not  developed  a
comprehensive  contingency  plan.  However,  if the general  partners  and their
affiliates identify significant risks related to their Year 2000 compliance,  or
if their progress deviates from the anticipated  timeline,  the general partners
and their affiliates will develop  contingency plans as deemed necessary at that
time.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         Not applicable.


<PAGE>


                           PART II. OTHER INFORMATION


Item 1.     Legal Proceedings.

            On May 11, 1999,  four limited  partners in several CNL Income Funds
            served a derivative  and purported  class action lawsuit filed April
            22, 1999 against the general  partners and APF in the Circuit  Court
            of the Ninth Judicial  Circuit of Orange County,  Florida,  alleging
            that the  general  partners  breached  their  fiduciary  duties  and
            violated  provisions  of certain of the CNL Income Fund  partnership
            agreements in connection  with the proposed  Merger.  The plaintiffs
            are seeking  unspecified  damages and equitable  relief.  On July 8,
            1999, the plaintiffs  filed an amended  complaint which, in addition
            to naming  three  additional  plaintiffs,  includes  allegations  of
            aiding and  abetting  and  conspiring  to breach  fiduciary  duties,
            negligence  and breach of duty of good faith against  certain of the
            defendants and seeks additional  equitable relief.  As amended,  the
            caption of the case is Jon Hale, Mary J. Hewitt,  Charles A. Hewitt,
            Gretchen M. Hewitt Bernard J. Schulte,  Edward M. and Margaret Berol
            Trust,  and Vicky Berol v. James M. Seneff,  Jr.,  Robert A. Bourne,
            CNL Realty Corporation, and CNL American Properties Fund, Inc., Case
            No. CIO-99-0003561.

            On June 22,  1999,  a limited  partner of several  CNL Income  Funds
            served a purported class action lawsuit filed April 29, 1999 against
            the general partners and APF, Ira Gaines, individually and on behalf
            of a class of persons similarly situated, v. CNL American Properties
            Fund,  Inc.,  James M. Seneff,  Jr.,  Robert A.  Bourne,  CNL Realty
            Corporation,  CNL Fund  Advisors,  Inc.,  CNL Financial  Corporation
            a/k/a CNL  Financial  Corp.,  CNL Financial  Services,  Inc. and CNL
            Group, Inc., Case NO. CIO-99-3796, in the Circuit Court of the Ninth
            Judicial  Circuit  of  Orange  County,  Florida,  alleging  that the
            general partners  breached their fiduciary duties and that APF aided
            and abetted their breach of fiduciary  duties in connection with the
            proposed Merger.  The plaintiff is seeking  unspecified  damages and
            equitable relief.

Item 2.     Changes in Securities.       Inapplicable.

Item 3.     Default upon Senior Securities.   Inapplicable.

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

Item 5.     Other Information.        Inapplicable.



<PAGE>


Item 6.     Exhibits and Reports on Form 8-K.

     (a)      Exhibits

                     2.1        Agreement  and Plan of Merger by and between the
                                Registrant  and CNL  American  Properties  Fund,
                                Inc. ("APF") dated March 11, 1999 and as amended
                                June  4,  1999  (Filed  as  Appendix  B  to  the
                                Prospectus   Supplement   for  the   Registrant,
                                constituting  a part of  Amendment  No. 1 to the
                                Registration  Statement of APF on Form S-4, File
                                No. 74329.)

                     3.1        Affidavit and Certificate of Limited Partnership
                                of CNL  Income  Fund  XIII,  Ltd.  (Included  as
                                Exhibit  3.1  to   Registration   Statement  No.
                                33-53672 on Form S-11 and incorporated herein by
                                reference.)

                     4.1        Affidavit and Certificate of Limited Partnership
                                of CNL  Income  Fund  XIII,  Ltd.  (Included  as
                                Exhibit  3.1  to   Registration   Statement  No.
                                33-53672 on Form S-11 and incorporated herein by
                                reference.)

                     4.2        Amended  and   Restated   Agreement  of  Limited
                                Partnership  of  CNL  Income  Fund  XIII,   Ltd.
                                (Included as Exhibit 4.2 to Form 10-K filed with
                                the Securities and Exchange  Commission on March
                                31, 1994, and incorporated herein by reference.)

                     10.1       Management  Agreement  between  CNL Income  Fund
                                XIII, Ltd. and CNL Investment  Company (Included
                                as  Exhibit  10.1 to Form  10-K  filed  with the
                                Securities and Exchange  Commission on March 31,
                                1994, and incorporated herein by reference.)

                     10.2       Assignment  of  Management  Agreement  from  CNL
                                Investment  Company to CNL Income Fund Advisors,
                                Inc.  (Included  as  Exhibit  10.2 to Form  10-K
                                filed   with   the   Securities   and   Exchange
                                Commission on March 30, 1995,  and  incorporated
                                herein by reference.)

                     10.3       Assignment  of  Management  Agreement  from  CNL
                                Income Fund Advisors, Inc. to CNL Fund Advisors,
                                Inc.  (Included  as  Exhibit  10.5 to Form  10-K
                                filed   with   the   Securities   and   Exchange
                                Commission  on April 1, 1996,  and  incorporated
                                herein by reference.)

                     27         Financial Data Schedule (Filed herewith.)

              (b)      Reports on Form 8-K

                        No reports on Form 8-K were filed  during the quarter
                        ended June 30, 1999.



<PAGE>



                                   SIGNATURES


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

         DATED this 11th day of August, 1999.


                       By:       CNL INCOME FUND XIII, LTD.
                                 General Partner


                                 By:           /s/ James M. Seneff, Jr.
                                               -----------------------------
                                               JAMES M. SENEFF, JR.
                                               Chief Executive Officer
                                               (Principal Executive Officer)


                                 By:           /s/ Robert A. Bourne
                                               ------------------------------
                                               ROBERT A. BOURNE
                                               President and Treasurer
                                               (Principal Financial and
                                                Accounting Officer)