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 September 30, 2004
   --------------------------------------------------------------------------

                                       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)


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


       450 South Orange Avenue
          Orlando, Florida                                 32801
-----------------------------------------     ----------------------------------
(Address of principal executive offices)                 (Zip Code)


Registrant's telephone number
(including area code)                                   (407) 540-2000
                                              ----------------------------------


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 _________

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act): Yes___ No X


<PAGE>


                                    CONTENTS





Part I                                                                     Page

   Item 1.    Financial Statements:

                  Condensed Balance Sheets                                 1

                  Condensed Statements of Income                           2

                  Condensed Statements of Partners' Capital                3

                  Condensed Statements of Cash Flows                       4

                  Notes to Condensed Financial Statements                  5-6

   Item 2.    Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                      7-9

   Item 3.   Quantitative and Qualitative Disclosures About Market
                  Risk                                                     10

   Item 4.   Controls and Procedures                                       10


Part II

   Other Information                                                       11-12




<PAGE>


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

                                                                           September 30,            December 31,
                                                                               2004                     2003
                                                                         ------------------      -------------------
                              ASSETS

  Real estate properties with operating leases, net                      $      19,766,534       $       20,484,569
  Net investment in direct financing leases                                      4,955,819                5,067,879
  Real estate held for sale                                                             --                  577,504
  Investment in joint ventures                                                   3,258,603                3,310,368
  Cash and cash equivalents                                                      2,233,077                1,123,111
  Receivables, less allowance for doubtful accounts
      of $4,000 and $69,401, respectively                                               --                   97,948
  Accrued rental income                                                          1,890,623                1,913,104
  Other assets                                                                      53,633                   37,310
                                                                         ------------------      -------------------

                                                                         $      32,158,289       $       32,611,793
                                                                         ==================      ===================

                 LIABILITIES AND PARTNERS' CAPITAL

  Accounts payable and accrued expenses                                  $          72,828       $           16,519
  Real estate taxes payable                                                          9,056                    5,319
  Distributions payable                                                            850,002                  850,002
  Due to related parties                                                            35,401                   17,178
  Rents paid in advance                                                            187,363                  174,627
  Deferred rental income                                                            20,904                   22,146
                                                                         ------------------      -------------------
      Total liabilities                                                          1,175,554                1,085,791

  Partners' capital                                                             30,982,735               31,526,002
                                                                         ------------------      -------------------

                                                                         $      32,158,289       $       32,611,793
                                                                         ==================      ===================
</TABLE>

           See accompanying notes to condensed financial statements.

                                        1


<PAGE>


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

                                                             Quarter Ended                   Nine Months Ended
                                                             September 30,                     September 30,
                                                         2004             2003             2004            2003
                                                     -------------    -------------    -------------  ---------------
  Revenues:
      Rental income from operating leases            $    610,054     $    629,029     $  1,839,815   $    1,873,545
      Earned income from direct financing leases          133,599          137,459          408,144          415,690
      Contingent rental income                             55,043           25,543          108,613          119,331
      Interest and other income                             1,788               --           26,664            1,343
                                                     -------------    -------------    -------------  ---------------
                                                          800,484          792,031        2,383,236        2,409,909
                                                     -------------    -------------    -------------  ---------------

  Expenses:
      General operating and administrative                112,684           59,492          319,744          200,448
      Property related                                     29,730            6,738           62,345           11,357
      Management fees to related party                      9,616            9,054           27,935           27,571
      State and other taxes                                    --               40           50,932           56,280
      Depreciation and amortization                       100,119          100,094          300,357          300,276
      Provision for write-down of assets                   62,080               --           62,080               --
                                                     -------------    -------------    -------------  ---------------
                                                          314,229          175,418          823,393          595,932
                                                     -------------    -------------    -------------  ---------------

  Income before gain on involuntary conversion
        and equity in earnings of                         486,255          616,613        1,559,843        1,813,977
  unconsolidated joint ventures

  Gain on involuntary conversion                          113,856               --          113,856               --

  Equity in earnings of unconsolidated joint
  ventures                                                 81,910           81,064          245,185          237,609
                                                     -------------    -------------    -------------  ---------------

  Income from continuing operations                       682,021          697,677        1,918,884        2,051,586
                                                     -------------    -------------    -------------  ---------------

  Discontinued operations:
      Income from discontinued operations                      --           12,929           24,193           39,037
      Gain on disposal of discontinued operations              --               --           63,662               --
                                                     -------------    -------------    -------------  ---------------
                                                               --           12,929           87,855           39,037
                                                     -------------    -------------    -------------  ---------------

  Net income                                         $    682,021     $    710,606     $  2,006,739   $    2,090,623
                                                     =============    =============    =============  ===============

  Income per limited partner unit:
      Continuing operations                          $       0.17     $       0.18     $       0.48   $         0.51
      Discontinued operations                                  --               --             0.02             0.01
                                                     -------------    -------------    -------------  ---------------
                                                     $       0.17     $       0.18     $       0.50   $         0.52
                                                     =============    =============    =============  ===============

  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.

                                        2

<PAGE>

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

                                                                          Nine Months Ended          Year Ended
                                                                            September 30,           December 31,
                                                                                 2004                   2003
                                                                         ---------------------    ------------------

General partners:
    Beginning balance                                                    $            191,934     $         191,934
    Net income                                                                             --                    --
                                                                         ---------------------    ------------------
                                                                                      191,934               191,934
                                                                         ---------------------    ------------------

Limited partners:
    Beginning balance                                                              31,334,068            31,896,264
    Net income                                                                      2,006,739             2,837,812
    Distributions ($0.64 and $0.85 per
       limited partner unit, respectively)                                         (2,550,006)           (3,400,008)
                                                                         ---------------------    ------------------
                                                                                   30,790,801            31,334,068
                                                                         ---------------------    ------------------

Total partners' capital                                                  $         30,982,735     $      31,526,002
                                                                         =====================    ==================
</TABLE>
           See accompanying notes to condensed financial statements.

                                        3


<PAGE>


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

                                                                                  Nine Months Ended
                                                                                    September 30,
                                                                                2004              2003
                                                                           ---------------    --------------


   Net cash provided by operating activities                               $    2,550,297     $   2,516,233
                                                                           ---------------    --------------

   Cash flows from investing activities:
       Proceeds from sale of assets                                               639,960                --
       Proceeds from involuntary conversion                                       469,715                --
                                                                           ---------------------------------
             Net cash provided by investing activities                          1,109,675                --
                                                                           ---------------    --------------

   Cash flows from financing activities:
       Distributions to limited partners                                       (2,550,006)       (2,550,006)
                                                                           ---------------    --------------
             Net cash used in financing activities                             (2,550,006)       (2,550,006)
                                                                           ---------------    --------------

   Net increase (decrease) in cash and cash equivalents                         1,109,966           (33,773)
                                                                           ---------------    --------------

   Cash and cash equivalents at beginning of period                             1,123,111         1,275,846
                                                                           ---------------    --------------

   Cash and cash equivalents at end of period                              $    2,233,077     $   1,242,073
                                                                           ===============    ==============

   Supplemental schedule of non-cash financing activities:

       Distributions declared and unpaid at end of
          period                                                           $      850,002     $     850,002
                                                                           ===============    ==============
</TABLE>
           See accompanying notes to condensed financial statements.

                                        4

<PAGE>


                           CNL INCOME FUND XIII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
           Quarters and Nine Months Ended September 30, 2004 and 2003

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 the general partners, necessary for a fair
         statement of the results for the interim periods  presented.  Operating
         results for the quarter and nine months ended  September 30, 2004,  may
         not be  indicative  of the results  that may be  expected  for the year
         ending December 31, 2004. Amounts as of December 31, 2003,  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, 2003.

         In December 2003,  the Financial  Accounting  Standards  Board issued a
         revision to FASB  Interpretation  No. 46 (originally  issued in January
         2003)  ("FIN  46R"),  "Consolidation  of  Variable  Interest  Entities"
         requiring  existing  unconsolidated  variable  interest  entities to be
         consolidated by their primary beneficiaries.  Application of FIN 46R is
         required in financial statements of public entities that have interests
         in variable  interest entities for periods ending after March 15, 2004.
         The  Partnership  adopted  FIN 46R during the  quarter  ended March 31,
         2004.  The  Partnership  was not the primary  beneficiary of a variable
         interest  entity  at the time of  adoption  of FIN 46R,  therefore  the
         adoption had no effect on the balance sheet,  partners'  capital or net
         income.

2.       Involuntary Conversion of Property

         In September 2004, the Partnership received approximately $458,600 as a
         settlement  for a right  of way  taking  related  to the  Partnership's
         property in Houston,  Texas.  This property consists only of land. As a
         result  of  this  right  of  way  taking,   Harris  County  Texas  took
         approximately  55% of the land.  The remaining  land's shape,  size and
         reduced  access  severely   limits  its  use.  The  settlement   amount
         represented  compensation  for both the land taken and for the decrease
         in fair value of the land still owned by the Partnership,  net of legal
         costs  incurred.  This  transaction  resulted in a gain on  involuntary
         conversion of approximately  $113,900 related to the property taken and
         a provision for write-down of assets of  approximately  $62,100 related
         to the property still owned by the Partnership.

3.       Discontinued Operations

         In February 2004, the Partnership entered into an agreement to sell its
         property in Blytheville,  Arkansas.  The Partnership sold this property
         in May 2004 for approximately  $640,000 resulting in a gain on disposal
         of discontinued operations of approximately $63,700.

         The  following  presents  the  operating  results  of the  discontinued
         operations for this property.
<TABLE>
<CAPTION>
<S><C>
                                                       Quarter Ended                Nine Months Ended
                                                       September 30,                  September 30,
                                                    2004           2003            2004            2003
                                                -------------  -------------- ---------------  --------------

                Rental revenues                 $         --   $      12,929  $       24,193   $      39,037
                Expenses                                  --              --              --              --
                                                -------------  -------------- ---------------  --------------
                Income from discontinued        $         --   $      12,929  $       24,193   $      39,037
                   operations
                                                =============  ============== ===============  ==============
</TABLE>

                                        5

<PAGE>

                           CNL INCOME FUND XIII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
           Quarters and Nine Months Ended September 30, 2004 and 2003


4.       Merger Transaction

         On August 9, 2004, the Partnership entered into a definitive  Agreement
         and Plan of Merger  pursuant  to which the  Partnership  will be merged
         with a subsidiary of U.S. Restaurant Properties,  Inc. (NYSE: USV). The
         merger is one of multiple concurrent  transactions pursuant to which 17
         other  affiliated  limited  partnerships  also  will be  merged  with a
         subsidiary  of  U.S.  Restaurant  Properties,  Inc.  and in  which  CNL
         Restaurant  Properties,  Inc., an  affiliate,  also will be merged with
         U.S.  Restaurant  Properties,  Inc.  CNL  Restaurant  Properties,  Inc.
         currently  provides  property  management  and  other  services  to the
         Partnership.  The merger of the  Partnership  (and each of the 17 other
         affiliated mergers) is subject to certain conditions including approval
         by a majority of the limited partners, consummation of a minimum number
         of limited partnership mergers representing at least 75.0% in value (as
         measured  by the  value of the  merger  consideration)  of all  limited
         partnerships,  consummation  of  the  merger  between  U.S.  Restaurant
         Properties,  Inc. and CNL Restaurant Properties,  Inc., approval of the
         shareholders of U.S. Restaurant  Properties,  Inc., and availability of
         financing.  The  transaction is expected to be consummated in the first
         quarter of 2005.

         Under  the  terms  of  the  merger  agreement,  if the  transaction  is
         approved,  the limited  partners  will receive total  consideration  of
         approximately  $38.22  million,   consisting  of  approximately  $31.96
         million in cash and  approximately  $6.26  million  in U.S.  Restaurant
         Properties, Inc. Series A Convertible Preferred Stock that is listed on
         the New York Stock  Exchange.  The general  partners will receive total
         consideration  of  approximately  $150,000  consisting of approximately
         $125,000 in cash and approximately $25,000 in preferred stock.

                                       6

<PAGE>


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

         CNL Income Fund XIII, Ltd. (the "Partnership," which may be referred to
as "we," "us," or "our") 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 September 30, 2003, we owned 40 Properties
directly  and six  Properties  indirectly  through  joint  venture or tenancy in
common  arrangements.  As of September 30, 2004, we owned 39 Properties directly
and seven  Properties  indirectly  through  joint  venture  or tenancy in common
arrangements.

Merger Transaction

         The general  partners  believe their  primary  objective is to maintain
current operations with restaurant operators as successfully as possible,  while
evaluating  strategic  alternatives,  including  alternatives  that may  provide
liquidity to the limited  partners.  Real estate  markets are strong  throughout
much of the nation,  and the performance of restaurants  has generally  improved
after several  challenging years. As a result, the general partners believe that
this is an attractive  period for a strategic event to monetize the interests of
the limited partners.

         In furtherance of this, on August 9, 2004, we entered into a definitive
Agreement  and  Plan of  Merger  pursuant  to  which  we will be  merged  with a
subsidiary of U.S. Restaurant Properties, Inc. (NYSE: USV). The merger is one of
multiple concurrent  transactions  pursuant to which 17 other affiliated limited
partnerships  also  will  be  merged  with  a  subsidiary  of  U.S.   Restaurant
Properties,  Inc. and in which CNL  Restaurant  Properties,  Inc., an affiliate,
also will be merged with U.S. Restaurant  Properties,  Inc. Our merger (and each
of the 17 other affiliated  mergers) is subject to certain conditions  including
approval by a majority of the limited partners, consummation of a minimum number
of limited partnership mergers representing at least 75.0% in value (as measured
by  the  value  of  the  merger  consideration)  of  all  limited  partnerships,
consummation  of the merger  between U.S.  Restaurant  Properties,  Inc. and CNL
Restaurant  Properties,  Inc.,  approval of the shareholders of U.S.  Restaurant
Properties,  Inc., and availability of financing.  U.S.  Restaurant  Properties,
Inc.  is a real  estate  investment  trust  (REIT)  that  focuses  primarily  on
acquiring, owning and leasing restaurant properties. The transaction is expected
to be consummated in the first quarter of 2005.

         Under  the  terms  of  the  merger  agreement,  if the  transaction  is
approved, our limited partners will receive total consideration of approximately
$38.22  million,   consisting  of  approximately  $31.96  million  in  cash  and
approximately  $6.26  million  in U.S.  Restaurant  Properties,  Inc.  Series  A
Convertible  Preferred Stock that is listed on the New York Stock Exchange.  The
general  partners will receive total  consideration  of  approximately  $150,000
consisting  of  approximately  $125,000  in cash and  approximately  $25,000  in
preferred stock.

         We received an opinion from Wachovia  Capital  Markets,  LLC that as of
August 9, 2004 the merger  consideration  to be  received  by the holders of our
general and limited  partnership  interests is fair,  from a financial  point of
view, to such holders.

         As reflected  above, the  contemplated  transactions  are complex,  and
contingent upon certain conditions. The restaurant marketplace,  the real estate
industry,  and the equities markets, all individually or taken as a whole, could
impact the  economics of this  transaction.  As a result,  there is no assurance
that we will be successful in completing the contemplated transaction.

Capital Resources

         Net cash provided by operating activities was $2,550,297 and $2,516,233
for the nine months ended September 30, 2004 and 2003, respectively.

                                       7
<PAGE>

         In 2004, we sold our Property in Blytheville, Arkansas to a third party
and received net sales proceeds of approximately $640,000 resulting in a gain on
disposal of  discontinued  operations  of  approximately  $63,700.  We intend to
reinvest those proceeds in an additional Property or to pay liabilities.

         In September 2004, we received  approximately  $458,600 as a settlement
for a right of way  taking  related  to our  property  in  Houston,  Texas.  The
settlement amount  represented  compensation for both the land taken and for the
decrease in fair value of the land we still own, net of legal costs incurred. We
intend  to  reinvest  those  proceeds  in  an  additional  Property  or  to  pay
liabilities as needed.

         At September 30, 2004, we had $2,233,077 in cash and cash  equivalents,
as compared to $1,123,111  at December 31, 2003.  At September  30, 2004,  these
funds were held in a demand deposit  account at a commercial  bank. The increase
in cash and cash  equivalents  at September 30, 2004,  was primarily a result of
holding sales proceeds from a current year sale and settlement proceeds relating
to the right of way taking in Houston,  Texas,  as  described  above.  The funds
remaining  at September  30,  2004,  after  payment of  distributions  and other
liabilities  may be used to invest  in an  additional  Property  and to meet our
working capital needs.

Short-Term Liquidity

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

         Our  short-term   liquidity   requirements  consist  primarily  of  our
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
our operations.

         We  generally  distribute  cash  from  operations  remaining  after the
payment of operating expenses, to the extent that the general partners determine
that such funds are available for distribution. Based on current and anticipated
future cash from operations,  we declared  distributions to the limited partners
of  $2,550,006  for each of the nine months ended  September  30, 2004 and 2003.
This  represents  distributions  of $0.64  per unit for each of the nine  months
ended September 30, 2004 and 2003 ($0.21 per unit for each applicable  quarter).
No  distributions  were made to the general  partners  for the quarters and nine
months ended September 30, 2004 and 2003. No amounts  distributed to the limited
partners for the nine months ended  September  30, 2004 and 2003 are required to
be or have been treated as a return of capital for purposes of  calculating  the
limited partners' return on their adjusted capital  contributions.  We intend to
continue to make  distributions  of cash to the limited  partners on a quarterly
basis.

         Total liabilities,  including distributions payable, were $1,175,554 at
September 30, 2004, as compared to $1,085,791 at December 31, 2003. The increase
in total  liabilities  was  primarily  due to increases in accounts  payable and
accrued expenses,  amounts due to related parties and rents paid in advance. The
general  partners  believe  that we  have  sufficient  cash on hand to meet  our
current working capital needs.

Long-Term Liquidity

         We have no long-term debt or other long-term liquidity requirements.

Results of Operations

         Rental revenues from continuing  operations decreased to $2,247,959 for
the nine months ended  September 30, 2004 as compared to $2,289,235 for the same
period in 2003,  of which  $743,653  and $766,488  were earned  during the third
quarters of 2004 and 2003,  respectively.  In March 2004,  the lease relating to
the Property in Lafayette,  Indiana  expired.  Also in March 2004, the tenant of
the Property in Houston,  Texas  terminated the lease, as permitted by the lease
agreement,  as a result of a right of way taking.  The lost  revenues  resulting
from these  vacant  Properties  will  continue to have an adverse  effect on our
results of operations until we are able to re-lease the Properties.

                                       8
<PAGE>

         During the nine months  ended  September  30, 2004 and 2003,  we earned
$108,613 and $119,331,  respectively,  in  contingent  rental  income,  of which
$55,043 and  $25,543  were  earned  during the third  quarters of 2004 and 2003,
respectively.  The decrease in contingent rental income,  during the nine months
ended  September  30,  2004,  was due to a decrease in  reported  gross sales of
certain  restaurant  Properties,  the  leases of which  require  the  payment of
contingent  rent.  The increase  during the third quarter of 2004 was due to the
fact that we collected and  recognized,  as income,  contingent rent relating to
sales in 2003 and the six months ended June 30, 2004.

         During the nine months  ended  September  30, 2004 and 2003,  we earned
$245,185  and  $237,609,  respectively,  attributable  to net  income  earned by
unconsolidated  joint ventures,  of which $81,910 and $81,064 were earned during
the third quarters of 2004 and 2003, respectively.  The increase during the nine
months ended  September  30, 2004 was  primarily  due to a new tenancy in common
arrangement we invested in during November 2003.

         During the nine months  ended  September  30, 2004 and 2003,  we earned
$26,664  and $1,343 in interest  and other  income,  of which  $1,788 was earned
during the third  quarter of 2004.  Interest and other income was higher  during
the nine months ended  September 30, 2004 because we received  reimbursement  of
property  expenditures that were incurred in previous years relating to a vacant
Property.  The former tenant  reimbursed these amounts,  in 2004, as a result of
its 1998 bankruptcy proceedings.

         Operating expenses, including depreciation and amortization expense and
provision  for  write-down  of assets,  were  $823,393 and $595,932 for the nine
months ended September 30, 2004 and 2003,  respectively,  of which, $314,229 and
$175,418 were incurred during the third quarters of 2004 and 2003, respectively.
The  increase in  operating  expenses  during the quarter and nine months  ended
September 30, 2004,  was partially due to the provision for write-down of assets
incurred as a result of a right of way taking of land related to our Property in
Houston,  Texas as described  below.  The provision  represented  the difference
between its carrying value and its estimated fair value.  The provision  related
to the property we still own. The  increase was also due to  additional  general
operating and administrative expenses including,  primarily, legal fees incurred
in  connection  with  the  merger  transaction  described  above.  In  addition,
operating  expenses  were  higher  during  the  quarter  and nine  months  ended
September  30,  2004  because we  incurred  property  related  expenses  such as
insurance, repairs and maintenance, legal fees and real estate taxes relating to
the two vacant  Properties in Lafayette,  Indiana,  and Houston,  Texas. We will
continue  to incur  these  expenses  until the  Properties  are  re-leased.  The
increase for the nine months ended September 30, 2004 was partially  offset by a
decrease  in  state  tax  expense  relating  to  several  states  in which we do
business.

         In September 2004, we received  approximately  $458,600 as a settlement
for a right of way taking  related  to our  Property  in  Houston,  Texas.  This
property consists only of land. As a result of this right of way taking,  Harris
County Texas took  approximately  55% of the land.  The remaining  land's shape,
size  and  reduced  access  severely  limits  its  use.  The  settlement  amount
represented  compensation  for both the land taken and for the  decrease in fair
value of the land we still own, net of legal costs  incurred.  This  transaction
resulted in a gain on involuntary  conversion of approximately  $113,900 related
to the Property taken.

         We recognized income from discontinued operations (rental revenues less
property related expenses) relating to the Property in Blytheville, Arkansas, of
$24,193 and $39,037 during the nine months ended September 30, 2004 and 2003,
respectively, of which $12,929 was recognized during the third quarter of 2003.
We sold the Property in May 2004, resulting in a gain on disposal of
discontinued operations of approximately $63,700.

         In December 2003,  the Financial  Accounting  Standards  Board issued a
revision to FASB Interpretation No. 46 (originally issued in January 2003) ("FIN
46R"),   "Consolidation  of  Variable  Interest  Entities"   requiring  existing
unconsolidated  variable  interest  entities to be consolidated by their primary
beneficiaries.  Application  of FIN 46R is required in financial  statements  of
public  entities that have interests in variable  interest  entities for periods
ending after March 15, 2004.  We adopted FIN 46R during the quarter  ended March
31, 2004. We were not the primary  beneficiary of a variable  interest entity at
the time of adoption of FIN 46R,  therefore  the  adoption  had no effect on the
balance sheet, partners' capital or net income.

                                       9
<PAGE>

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         Not applicable.


ITEM 4.  CONTROLS AND PROCEDURES

         The  general  partners  maintain  a  set  of  disclosure  controls  and
procedures  designed to ensure that information  required to be disclosed in our
filings  under  the  Securities  Exchange  Act of 1934 is  recorded,  processed,
summarized and reported within the time periods  specified in the Securities and
Exchange  Commission's  rules and forms.  The principal  executive and financial
officers of the corporate general partner have evaluated our disclosure controls
and procedures as of the end of the period  covered by this Quarterly  Report on
Form 10-Q and have determined  that such disclosure  controls and procedures are
effective.

         There was no change in internal  control over financial  reporting that
occurred during the most recent fiscal quarter that has materially affected,  or
is  reasonably  likely to materially  affect,  internal  control over  financial
reporting.

                                       10
<PAGE>


                           PART II. OTHER INFORMATION


Item 1.  Legal Proceedings.   Inapplicable.
         ------------------

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.
         ------------------------------------------------------------
         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.
         ------------------

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

         (a)    Exhibits

                2.1     Agreement  and  Plan of  Merger  among  U.S.  Restaurant
                        Properties, Inc., Ivanhoe Acquisition XIII, LLC, and CNL
                        Income  Fund  XIII,  Ltd.,  dated as of August 9,  2004.
                        (Included  as  Exhibit  99.2 to Form 8-K filed  with the
                        Securities  and Exchange  Commission  on August 9, 2004,
                        and incorporated herein by reference.)

                3.1     Affidavit and Certificate of Limited  Partnership of CNL
                        Income  Fund XIII,  Ltd.  (Included  as  Exhibit  3.2 to
                        Registration  Statement No. 33-53672-01 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  3.2 to
                        Registration  Statement No. 33-53672-01 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,  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 10.3 to Form 10-K filed with the  Securities and
                        Exchange  Commission on April 1, 1996, and  incorporated
                        herein by reference.)

                10.4    Assignment  of  Management   Agreement   from  CNL  Fund
                        Advisors,  Inc. to CNL APF  Partners,  LP.  (Included as
                        Exhibit 10.4 to Form 10-Q filed with the  Securities and
                        Exchange Commission on August 14, 2001, and incorporated
                        herein by reference.)

                                       11
<PAGE>

                10.5    Assignment   of  Management   Agreement   from  CNL  APF
                        Partners, LP to CNL Restaurants XVIII, Inc. (Included as
                        Exhibit 10.5 to Form 10-Q filed with the  Securities and
                        Exchange Commission on August 14, 2002, and incorporated
                        herein by reference.)

                31.1    Certification  of Chief  Executive  Officer of Corporate
                        General  Partner  Pursuant  to Rule  13a-14  as  Adopted
                        Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
                        2002. (Filed herewith.)

                31.2    Certification  of Chief  Financial  Officer of Corporate
                        General  Partner  Pursuant  to Rule  13a-14  as  Adopted
                        Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
                        2002. (Filed herewith.)

                32.1    Certification  of Chief  Executive  Officer of Corporate
                        General  Partner  Pursuant to 18 U.S.C.  Section 1350 as
                        Adopted  Pursuant to Section  906 of the  Sarbanes-Oxley
                        Act of 2002. (Filed herewith.)

                32.2    Certification  of Chief  Financial  Officer of Corporate
                        General  Partner  Pursuant to 18 U.S.C.  Section 1350 as
                        Adopted  Pursuant to Section  906 of the  Sarbanes-Oxley
                        Act of 2002. (Filed herewith.)

                                       12
<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 10th day of November 2004.


                                CNL INCOME FUND XIII, LTD.

                                By:      CNL REALTY CORPORATION
                                         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)



<PAGE>



                                  EXHIBIT INDEX

Exhibit Number

                 Exhibits

                 2.1    Agreement  and  Plan of  Merger  among  U.S.  Restaurant
                        Properties, Inc., Ivanhoe Acquisition XIII, LLC, and CNL
                        Income  Fund  XIII,  Ltd.,  dated as of August 9,  2004.
                        (Included  as  Exhibit  99.2 to Form 8-K filed  with the
                        Securities  and Exchange  Commission  on August 9, 2004,
                        and incorporated herein by reference.)

                 3.1    Affidavit and Certificate of Limited  Partnership of CNL
                        Income  Fund XIII,  Ltd.  (Included  as  Exhibit  3.2 to
                        Registration  Statement No. 33-53672-01 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  3.2 to
                        Registration  Statement No. 33-53672-01 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,  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 10.3 to Form 10-K filed with the  Securities and
                        Exchange  Commission on April 1, 1996, and  incorporated
                        herein by reference.)

                 10.4   Assignment  of  Management   Agreement   from  CNL  Fund
                        Advisors,  Inc. to CNL APF  Partners,  LP.  (Included as
                        Exhibit 10.4 to Form 10-Q filed with the  Securities and
                        Exchange Commission on August 14, 2001, and incorporated
                        herein by reference.)

                 10.5   Assignment   of  Management   Agreement   from  CNL  APF
                        Partners, LP to CNL Restaurants XVIII, Inc. (Included as
                        Exhibit 10.5 to Form 10-Q filed with the  Securities and
                        Exchange Commission on August 14, 2002, and incorporated
                        herein by reference.)

                 31.1   Certification  of Chief  Executive  Officer of Corporate
                        General  Partner  Pursuant  to Rule  13a-14  as  Adopted
                        Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
                        2002. (Filed herewith.)

                 31.2   Certification  of Chief  Financial  Officer of Corporate
                        General  Partner  Pursuant  to Rule  13a-14  as  Adopted
                        Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
                        2002. (Filed herewith.)


<PAGE>



                 32.1   Certification  of Chief  Executive  Officer of Corporate
                        General  Partner  Pursuant to 18 U.S.C.  Section 1350 as
                        Adopted  Pursuant to Section  906 of the  Sarbanes-Oxley
                        Act of 2002. (Filed herewith.)

                 32.2   Certification  of Chief  Financial  Officer of Corporate
                        General  Partner  Pursuant to 18 U.S.C.  Section 1350 as
                        Adopted  Pursuant to Section  906 of the  Sarbanes-Oxley
                        Act of 2002. (Filed herewith.)


<PAGE>




                                  EXHIBIT 31.1




<PAGE>




                                  EXHIBIT 31.2




<PAGE>



                                  EXHIBIT 32.1



<PAGE>



                                  EXHIBIT 32.2