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, 1998
             -------------------------------------------------------


                                       OR

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

                        For the transition period from to
              ----------------------------------------------------


                             Commission file number
                                     0-23968
                          ----------------------------


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

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


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


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


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                               1

       Condensed Statements of Income                         2

       Condensed Statements of Partners' Capital              3

       Condensed Statements of Cash Flows                     4

       Notes to Condensed Financial Statements                5

    Item 2.  Management's Discussion and Analysis
                  of Financial Condition and
                  Results of Operations                       6-10


Part II

    Other Information                                         11


<PAGE>


                                                        




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

                                                                             September 30,            December 31,
                                                                                  1998                    1997
                                                                            -----------------       ------------------
<S> <C>
                        ASSETS

Land and buildings on operating leases, less
    accumulated depreciation of $2,008,739
    and $1,697,320                                                               $23,965,359             $22,788,618
Net investment in direct financing leases                                          6,359,594               7,910,470
Investment in joint ventures                                                       2,453,391               2,457,810
Cash and cash equivalents                                                            817,721                 907,980
Receivables, less allowance for doubtful
    accounts of $25,192 in 1998                                                       19,822                  23,946
Prepaid expenses                                                                      12,251                  10,368
Organization costs, less accumulated
    amortization of $10,000 and $9,422                                                    --                     578
Accrued rental income                                                              1,364,156               1,423,820
                                                                            -----------------       -----------------


                                                                                 $34,992,294             $35,523,590
                                                                            =================       =================


                    LIABILITIES AND PARTNERS' CAPITAL

Accounts payable                                                             $         7,516         $         7,671
Accrued real estate taxes payable                                                     45,195                      --
Distributions payable                                                                850,002                 850,002
Due to related parties                                                                 5,483                   6,791
Rents paid in advance                                                                  5,571                   5,570
                                                                            -----------------       -----------------
       Total liabilities                                                             913,767                 870,034

Partners' capital                                                                 34,078,527              34,653,556
                                                                            -----------------       -----------------

                                                                                 $34,992,294             $35,523,590
                                                                            =================       =================
</TABLE>




                 See accompanying notes to financial statements.

                                       1
<PAGE>


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

                                                          Quarter Ended                      Nine Months Ended
                                                          September 30,                        September 30,
                                                     1998               1997              1998              1997
                                                  ------------      -------------      ------------      ------------
<S> <C>
Revenues:
    Rental income from operating
       leases                                     $   583,183        $   645,571        $1,815,609       $1,855,547
    Adjustments to accrued rental income                3,713                 --          (307,405 )             --
    Earned income from direct
       financing leases                               174,129            179,015           589,349          656,665
    Contingent rental income                           72,309             89,378           213,317          195,164
    Interest and other income                           8,081             17,913            41,267           39,198
                                                  ------------      -------------      ------------      -----------
                                                      841,415            931,877         2,352,137        2,746,574
                                                  ------------      -------------      ------------      -----------
Expenses:
    General operating and
       administrative                                  44,235             35,046           114,819          116,069
    Professional services                               5,089              4,520            19,724           16,533
    Bad debt expense                                       --            123,862                --          123,862
    Management fees to related parties                  8,472              8,340            26,246           25,596
    Real estate taxes                                  67,472                 --            70,360               --
    State and other taxes                                  --                 --            16,184           18,301
    Depreciation and amortization                     115,760             98,418           312,173          295,683
                                                  ------------      -------------      ------------      -----------
                                                      241,028            270,186           559,506          596,044
                                                  ------------      -------------      ------------      -----------

Income Before Equity in Earnings
    of Joint Ventures and Provision for
    Loss on Land and Net Investment
    in Direct Financing Lease                         600,387            661,691         1,792,631        2,150,530

Equity in Earnings of Joint Ventures                   60,864             39,217           182,346          109,720

Provision for Loss on Land and Net
    Investment in Direct Financing Lease                   --             (7,336 )              --          (48,538 )
                                                  ------------      -------------      ------------      -----------

Net Income                                         $  661,251        $   693,572        $1,974,977       $2,211,712
                                                  ============      =============      ============      ===========

Allocation of Net Income:
    General partners                               $    6,613        $     6,977        $   19,750        $  22,443
    Limited partners                                  654,638            686,595         1,955,227        2,189,269
                                                  ------------      -------------      ------------      -----------

                                                   $  661,251        $   693,572        $1,974,977       $2,211,712
                                                  ============      =============      ============      ===========

Net Income Per Limited Partner Unit                $     0.16        $      0.17        $      .49       $     0.55
                                                  ============      =============      ============      ===========

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 financial statements.

                                       2
<PAGE>


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

<TABLE>
<CAPTION>


                                                                   Nine Months Ended              Year Ended
                                                                     September 30,               December 31,
                                                                         1998                        1997
                                                              ----------------------------     ------------------
<S> <C>
  General partners:
      Beginning balance                                              $     137,207               $     106,517
      Net income                                                            19,750                      30,690
                                                                   ----------------             ---------------
                                                                           156,957                     137,207
                                                                   ----------------             ---------------
  Limited partners:
      Beginning balance                                                 34,516,349                  34,911,420
      Net income                                                         1,955,227                   3,004,937
      Distributions ($0.64 and
         $0.85 per limited partner
         unit, respectively)                                            (2,550,006 )                (3,400,008 )
                                                                   ----------------             ---------------
                                                                        33,921,570                  34,516,349
                                                                   ----------------             ---------------

  Total partners' capital                                              $34,078,527                 $34,653,556
                                                                   ================             ===============



</TABLE>

                 See accompanying notes to financial statements.

                                       3
<PAGE>


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


                                                                              Nine Months Ended
                                                                                September 30,
                                                                         1998                    1997
                                                                    ---------------         ---------------
<S> <C>
Increase (Decrease) in Cash and Cash
   Equivalents:

      Net Cash Provided by Operating Activities                       $  2,459,747            $  2,511,698
                                                                   ----------------         ---------------

      Cash Flows from Investing Activities:
         Investment in joint ventures                                           --                (550,000 )
         Decrease in restricted cash                                            --                 550,000
         Loan to tenant                                                         --                (196,980 )
                                                                   ----------------         ---------------
                Net cash used in investing activities                           --                (196,980 )
                                                                   ----------------         ---------------

      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 Decrease in Cash and Cash Equivalents                                  (90,259 )              (235,288 )

Cash and Cash Equivalents at Beginning
   of Period                                                               907,980               1,103,568
                                                                   ----------------         ---------------

Cash and Cash Equivalents at End of
   Period                                                            $     817,721           $     868,280
                                                                   ================         ===============

Supplemental Schedule of Non-Cash Investing
   and Financing Activities

      Net investment  in  direct  financing
         leases reclassified  to  land  and
         buildings on operating leases as a
         result of lease termination                                 $   1,488,160           $          --
                                                                   ================         ===============

      Distributions declared and unpaid at end of
         period                                                      $     850,002           $     850,002
                                                                   ================         ===============

</TABLE>


                 See accompanying notes to 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, 1998 and 1997


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 nine  months  ended  September  30,  1998,  may not be
         indicative  of the  results  that may be  expected  for the year ending
         December  31, 1998.  Amounts as of December  31, 1997,  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, 1997.

         In May  1998,  the  Financial  Accounting  Standards  Board  reached  a
         consensus in EITF 98-9, entitled "Accounting for Contingent Rent in the
         Interim Financial  Periods."  Adoption of this consensus did not have a
         material effect on the Partnership's  financial  position or results of
         operations.

2.        Net Investment in Direct Financing Leases:

         During  the  nine  months  ended  September  30,  1998,  three  of  the
         Partnership's  leases with Long John  Silver's,  Inc.  were rejected in
         connection  with the tenant  filing for  bankruptcy.  As a result,  the
         Partnership  reclassified  these assets from net  investment  in direct
         financing  leases  to  land  and  buildings  on  operating  leases.  In
         accordance  with  Statement  of  Financial  Accounting  Standards  #13,
         "Accounting  for Leases,"  the  Partnership  recorded the  reclassified
         assets at the lower of original  cost,  present fair value,  or present
         carrying value. No loss on termination of direct  financing  leases was
         recorded for financial reporting purposes.


                                       5
<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 triple-net  leases,  with the lessees generally  responsible for all repairs
and maintenance,  property taxes,  insurance and utilities.  As of September 30,
1998, the Partnership owned 47 Properties which included two Properties owned by
joint ventures in which the  Partnership is a co-venturer  and three  Properties
owned with affiliates as tenants-in-common.

Liquidity and Capital Resources

         The  Partnership's  primary source of capital for the nine months ended
September  30, 1998 and 1997,  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
$2,459,747 and $2,511,698 for the nine months ended September 30, 1998 and 1997,
respectively.  The  decrease in cash from  operations  for the nine months ended
September 30, 1998, as compared to the nine months ended  September 30, 1997, is
primarily  a result of changes  in income and  expenses  as  described  below in
"Results of Operations" and changes in the Partnership's working capital.

         Currently,  rental income from the Partnership's Properties is invested
in money market accounts or other short-term,  highly liquid investments pending
the  Partnership's  use of such  funds to pay  Partnership  expenses  or to make
distributions  to partners.  At September 30, 1998, the Partnership had $817,721
invested in such short-term investments, as compared to $907,980 at December 31,
1997.  The funds  remaining  at  September  30,  1998,  will be used towards the
payment of distributions and other liabilities.

         Total liabilities of the Partnership,  including distributions payable,
increased to $913,767 at September 30, 1998, from $870,034 at December 31, 1997,
primarily  as a  result  of  the  Partnership  accruing  real  estate  taxes  in
connection  with certain Long John Silver's  Properties,  as described  below in
"Results of Operations."  Total liabilities at September 30, 1998, to the extent
that they exceed cash and cash  equivalents at September 30, 1998,  will be paid
from future cash from operations.

         Based on  current  and future  anticipated  cash from  operations,  the
Partnership  declared  distributions  to the limited  partners of $2,550,006 for
each of the nine months ended  September 30, 1998 and 1997 ($850,002 for each of
the quarters ended September 30, 1998 and 1997).  This represents  distributions
of $0.64  per unit for each  applicable  nine  months  ($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,  1998  and  1997.  No  amounts
distributed to the limited partners for the nine months ended September 30, 1998
and 1997, are required to be or have been treated by

                                       6
<PAGE>


Liquidity and Capital Resource - Continued

the  Partnership as a return of capital for purposes of calculating  the limited
partners' return on their adjusted capital contribution. The Partnership intends
to continue to make  distributions  of cash  available for  distribution  to the
limited partners on a quarterly basis.

         The general  partners  have been  informed by CNL  American  Properties
Fund, Inc.  ("APF"),  an affiliate of the general  partners,  that it intends to
significantly  increase its asset base by proposing to acquire affiliates of the
general partners which have similar restaurant  property  portfolios,  including
the Partnership. APF is a real estate investment trust whose primary business is
the ownership of restaurant properties leased on a long-term, "triple-net" basis
to  operators  of national  and regional  restaurant  chains.  Accordingly,  the
general  partners  anticipate  that  APF  will  make an  offer  to  acquire  the
Partnership  in  exchange  for  securities  of APF.  The general  partners  have
recently retained  financial and legal advisors to assist them in evaluating and
negotiating  any offer that may be proposed by APF.  However,  at this time, APF
has made no such offer. In the event that an offer is made, the general partners
will  evaluate it and if the general  partners  believe  that the offer is worth
pursuing,  the general partners will promptly inform the limited  partners.  Any
agreement  to sell the  Partnership  would be  subject  to the  approval  of the
limited partners in accordance with the terms of the partnership agreement.

         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.

Results of Operations

         During the nine months ended September 30, 1997, the Partnership  owned
and leased 43 wholly  owned  Properties  (including  one  Property  in  Orlando,
Florida,  which was sold in  October  1997) and  during  the nine  months  ended
September 30, 1998, the Partnership  owned and leased 42 wholly owned Properties
to operators of fast-food  and  family-style  restaurant  chains.  In connection
therewith,  during  the nine  months  ended  September  30,  1998 and 1997,  the
Partnership  earned  $2,097,553 and $2,512,212,  respectively,  in rental income
from  operating  leases (net of adjustments to accrued rental income) and earned
income from direct financing leases for these Properties,  $761,025 and $824,586
of which was earned  during the  quarters  ended  September  30,  1998 and 1997,
respectively.  Rental and earned income decreased by approximately  $100,100 and
$101,400,  respectively,  during the quarter and nine months ended September 30,
1998,  as compared to the quarter and nine  months  ended  September  30,  1997,
primarily  due to the fact that in June  1998,  Long John  Silver's,  Inc.,  the
tenant of three  Properties,  filed  for  bankruptcy  and  rejected  the  leases
relating  to  these  Properties.  As a  result,  during  the nine  months  ended
September 30, 1998, the Partnership wrote off approximately  $307,400 of accrued
rental income (non-cash accounting adjustment relating to the straight-lining of
future scheduled rent increases over the lease term in accordance with generally

                                       7
<PAGE>


Results of Operations - Continued

accepted accounting principles).  In October 1998, the Partnership re-leased one
of these  Properties  to a new tenant for which rent will  commence  in December
1998.  The  general  partners  are  currently  seeking  either  new  tenants  or
purchasers for the two remaining Properties.  The Partnership will not recognize
any rental and earned income from the two remaining Properties until new tenants
for  these  Properties  are  located  or until the  Properties  are sold and the
proceeds from such sales are reinvested in additional Properties.

         During the nine months ended September 30, 1997, the  Partnership  also
owned and leased two Properties  indirectly  through joint venture  arrangements
and two Properties with affiliates of the general partners as tenants-in-common.
During the nine months ended  September  30,  1998,  the  Partnership  owned and
leased three  Properties  as  tenants-in-common  with  affiliates of the general
partners and two Properties  indirectly through joint venture  arrangements.  In
connection therewith,  during the nine months ended September 30, 1998 and 1997,
the Partnership earned $182,346 and $109,720, respectively,  attributable to the
net income  earned by these  joint  ventures,  $60,864  and $39,217 of which was
earned during the quarters ended September 30, 1998 and 1997, respectively.  The
increase  in net income  earned by these joint  ventures  during the quarter and
nine months ended September 30, 1998, as compared to the quarter and nine months
ended September 30, 1997, is primarily attributable to the fact that in December
1997,  the  Partnership  reinvested  the net sales proceeds it received from the
sale,  in October  1997,  of the  Property  in Orlando,  Florida,  in a Property
located  in  Miami,   Florida,  with  affiliates  of  the  general  partners  as
tenants-in-common.

         Operating expenses,  including  depreciation and amortization  expense,
were  $559,506 and $596,044  for the nine months  ended  September  30, 1998 and
1997,  respectively,  of which  $241,028  and  $270,186  were  incurred  for the
quarters  ended  September  30,  1998 and 1997,  respectively.  The  decrease in
operating  expenses during the quarter and nine months ended September 30, 1998,
as  compared  to the  quarter  and nine months  ended  September  30,  1997,  is
partially attributable to the fact that during the quarter and nine months ended
September 30, 1997, the Partnership  recorded bad debt expense of  approximately
$54,800  for rental and other  amounts,  relating  to the  Denny's  Property  in
Orlando, Florida, due to financial difficulties the tenant was experiencing. The
Property was sold in October 1997, and in  anticipation of the October sale, the
Partnership  wrote off as bad debt  expense  approximately  $69,100  of  amounts
previously advanced during the nine months ended September 30, 1997.

         The decrease in operating  expenses  during the quarter and nine months
ended  September  30,  1998,  as compared  to the quarter and nine months  ended
September 30, 1997, is partially offset by the fact that the Partnership accrued
insurance and real estate taxes as a result of Long John Silver's,  Inc.  filing
for bankruptcy and rejecting the leases  relating to three  Properties,  in June
1998.  The  Partnership  will continue to incur certain  expenses,  such as real
estate taxes, insurance,  and maintenance relating to these Properties until new
tenants or purchasers are located.  The Partnership is currently  seeking either
new tenants or purchasers  for these  Properties.  In addition,  the decrease in
operating  expenses during the quarter and nine months ended September 30, 1998,
is partially offset by an increase in depreciation expense due to the

                                       8
<PAGE>


Results of Operations - Continued

fact that during the  quarter and nine months  ended  September  30,  1998,  the
Partnership  reclassified  the assets from direct  financing leases to operating
leases,  in accordance  with  Statement of Financial  Accounting  Standards #13,
"Accounting   for  Leases,"  which  requires  the   Partnership  to  record  the
reclassified leases at the lower of original cost, present fair value or present
carrying value.

         During the  quarter and nine  months  ended  September  30,  1997,  the
Partnership  established an allowance for loss on land and net investment in the
direct  financing lease in the amount of $7,336 and $48,538,  respectively,  for
financial  reporting  purposes for the Property in Orlando,  Florida.  The total
allowance for the Property represented the difference between (i) the sum of the
Property's  land carrying  value and the carrying value of the net investment in
the direct  financing  lease at September  30, 1997 and (ii) the net  realizable
value of $932,849  received as net sales proceeds  received in conjunction  with
the sale of the Property in October 1997.

         In May  1998,  the  Financial  Accounting  Standards  Board  reached  a
consensus in EITF 98-9, entitled  "Accounting for Contingent Rent in the Interim
Financial  Period." Adoption of this consensus did not have a material effect on
the Partnership's financial position or results of operations.

         The Year 2000 problem is the result of information  technology  systems
and embedded  systems  (products which are made with  microprocessor  (computer)
chips such as HVAC systems,  physical  security  systems and elevators)  using a
two-digit  format,  as  opposed  to four  digits,  to  indicate  the year.  Such
information  technology and embedded systems may be unable to properly recognize
and process date-sensitive information beginning January 1, 2000.

         The  Partnership  does  not have any  information  technology  systems.
Affiliates  of the general  partners  provide all services  requiring the use of
information  technology  systems  pursuant to a  management  agreement  with the
Partnership.  The maintenance of embedded systems,  if any, at the Partnership's
properties is the  responsibility of the tenants of the properties in accordance
with the terms of the Partnership's  leases. The general partners and affiliates
have  established  a  team  dedicated  to  reviewing  the  internal  information
technology systems used in the operation of the Partnership, and the information
technology  and  embedded  systems  and the Year  2000  compliance  plans of the
Partnership's  tenants,   significant  suppliers,   financial  institutions  and
transfer agent.

         The  information  technology  infrastructure  of the  affiliates of the
general  partners  consists of a network of personal  computers and servers that
were  obtained   from  major   suppliers.   The   affiliates   utilize   various
administrative  and financial  software  applications on that  infrastructure to
perform the business functions of the Partnership.  The inability of the general
partners  and  affiliates  to identify  and timely  correct  material  Year 2000
deficiencies  in  the  software  and/or   infrastructure   could  result  in  an
interruption in, or failure of, certain of the Partnership's business activities
or operations.  Accordingly,  the general partners and affiliates have requested
and are evaluating  documentation from the suppliers of the affiliates regarding
the Year 2000 compliance

                                       9
<PAGE>


Results of Operations - Continued

of their products that are used in the business  activities or operations of the
Partnership.  The costs  expected to be incurred  by the  general  partners  and
affiliates  to become  Year  2000  compliant  will be  incurred  by the  general
partners  and  affiliates;  therefore,  these  costs  will have no impact on the
Partnership's financial position or results of operations.

         The  Partnership  has  material  third  party  relationships  with  its
tenants,  financial  institutions and 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
information.  If any of these third parties are unable to meet their obligations
to the  Partnership  because of the Year 2000  deficiencies,  such a failure may
have a material impact on the  Partnership.  Accordingly,  the general  partners
have requested and are evaluating  documentation from the Partnership's tenants,
financial  institutions,   and  transfer  agent  relating  to  their  Year  2000
compliance  plans.  At this time,  the general  partners  have not yet  received
sufficient   certifications   to  be  assured   that  the   tenants,   financial
institutions,  and  transfer  agent  have fully  considered  and  mitigated  any
potential material impact of the Year 2000 deficiencies.  Therefore, the general
partners do not, at this time, know of the potential costs to the Partnership of
any  adverse  impact  or effect of any Year  2000  deficiencies  by these  third
parties.

         The general  partners  currently  expect that all year 2000  compliance
testing  and any  necessary  remedial  measures  on the  information  technology
systems used in the business  activities and operations of the Partnership  will
be completed prior to June 30, 1999.  Based on the progress the general partners
and affiliates  have made in identifying and addressing the  Partnership's  Year
2000 issues and the plan and timeline to complete the  compliance  program,  the
general  partners  do  not  foresee   significant   risks  associated  with  the
Partnership's  Year 2000 compliance at this time.  Because the general  partners
and affiliates  are still  evaluating the status of the systems used in business
activities  and  operations  of the  Partnership  and the  systems  of the third
parties with which the Partnership  conducts its business,  the general partners
have not yet  developed  a  comprehensive  contingency  plan and are  unable  to
identify "the most  reasonably  likely worst case scenario" at this time. As the
general partners identify  significant  risks related to the Partnership's  Year
2000 compliance or if the Partnership's Year 2000 compliance  program's progress
deviates  substantially from the anticipated timeline, the general partners will
develop appropriate contingency plans.


                                       10
<PAGE>


                           PART II. OTHER INFORMATION


Item 1.          Legal Proceedings.  Inapplicable.

Item 2.          Changes in Securities.  Inapplicable.

Item 3.          Defaults 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 - None.

                 (b)  No reports on Form 8-K were filed during the quarter ended
                      September 30, 1998.

                                       11
<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 November, 1998.


                           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)