<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 10-Q


       Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                  For the Quarterly Period Ended JUNE 30, 1998

                         Commission File Number 33-22857

                  CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
                       (A California Limited Partnership)

                  I.R.S. Employer Identification No. 95-4166241

                         9090 WILSHIRE BLVD., SUITE 201
                           BEVERLY HILLS, CALIF. 90211

                         Registrant's Telephone Number,
                       Including Area Code (310) 278-2191


Indicate by check mark whether the registrant (1) has filed all documents and
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding twelve 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>   2

                  CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                               INDEX TO FORM 10-Q

                       FOR THE QUARTER ENDED JUNE 30, 1998


<TABLE>
<S>                                                                                                            <C>
PART I.  FINANCIAL INFORMATION

        Item 1.  Financial Statements and Notes to Financial Statements

                      Balance Sheets, June 30, 1998 and December 31, 1997 ......................................1

                      Statements of Operations,
                              Six and Three Months Ended June 30, 1998 and 1997.................................2

                      Statement of Partners' Capital (Deficiency)
                              Six Months Ended June 30, 1998 ...................................................3

                      Statements of Cash Flows
                              Six Months Ended June 30, 1998 and 1997...........................................4

                      Notes to Financial Statements ............................................................5

        Item 2.  Management's Discussion and Analysis of Financial
                      Condition and Results of Operations .....................................................12


PART II.  OTHER INFORMATION

        Item 1.  Legal Proceedings.............................................................................13

        Item 6.  Exhibits and Reports on Form 8-K..............................................................14

        Signatures ............................................................................................15
</TABLE>


<PAGE>   3

                  CENTURY HILLCRESTE APARTMENTS INVESTORS, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                 BALANCE SHEETS

                       JUNE 30, 1998 AND DECEMBER 31, 1997

                                     ASSETS

<TABLE>
<CAPTION>
                                                       1998
                                                    (Unaudited)           1997
                                                    -----------        -----------
<S>                                                 <C>                <C>        
      RENTAL PROPERTY (Notes 1, 2 and 3)            $33,672,790        $34,013,326

      CASH AND CASH EQUIVALENTS (Note 1)              4,977,351          4,100,537

      RESTRICTED CASH (Notes 1 and 5)                   158,700            158,700

      OTHER ASSETS (Note 5)                                  --             39,001
                                                    -----------        -----------

                                                    $38,808,841        $38,311,564
                                                    ===========        ===========


                        LIABILITIES AND PARTNERS' CAPITAL

      ACCOUNTS PAYABLE AND ACCRUED
        LIABILITIES (Note 4)                        $   403,475        $   367,529

      SECURITY DEPOSITS                                 293,630            297,622

         PREPAID RENT                                     6,832             16,866
                                                    -----------        -----------

                                                        703,937            682,017


      COMMITMENTS AND CONTINGENCIES (Note 5)

      PARTNERS' CAPITAL (Note 1)                     38,104,904         37,629,547
                                                    -----------        -----------

                                                    $38,808,841        $38,311,564
                                                    ===========        ===========
</TABLE>



   The accompanying notes are an integral part of these financial statements.


<PAGE>   4

                  CENTURY HILLCRESTE APARTMENTS INVESTORS, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                              STATEMENTS OF INCOME
                SIX AND THREE MONTHS ENDED JUNE 30, 1998 AND 1997
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                  Six months         Three months          Six months          Three months
                                                    ended                ended                ended                ended
                                                June 30, 1998        June 30, 1998        June 30, 1997        June 30, 1997
                                                -------------        -------------        -------------        -------------
<S>                                             <C>                  <C>                  <C>                  <C>          
REVENUES
     Rental income                              $   3,112,838        $   1,620,007        $   2,898,813        $   1,458,217
     Interest and other income (Note 3)               128,431               40,984               88,925               43,929
                                                -------------        -------------        -------------        -------------
                                                    3,241,269            1,660,991            2,987,738            1,502,146
                                                -------------        -------------        -------------        -------------

EXPENSES
     Operating (Note 4)                               671,541              359,792              707,408              374,800
     Property taxes                                   253,229              189,162              135,578               68,676
     Management fee - (Note 4)                         91,611               46,398               70,364               29,070
     General and administrative (Note 4)              194,709              103,621              624,632              500,133
     Depreciation                                     352,778              176,389              352,778              176,389
                                                -------------        -------------        -------------        -------------

                                                    1,563,868              875,362            1,890,760            1,149,068
                                                -------------        -------------        -------------        -------------

NET INCOME                                      $   1,677,401        $     785,629        $   1,096,978        $     353,078
                                                =============        =============        =============        =============

NET INCOME PER DEPOSITORY UNIT                  $        0.23        $        0.11        $        0.15        $        0.05
                                                =============        =============        =============        =============
</TABLE>



   The accompanying notes are an integral part of these financial statements.


<PAGE>   5

                  CENTURY HILLCRESTE APARTMENTS INVESTORS, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                  STATEMENTS OF PARTNERS' CAPITAL (DEFICIENCY)
                         SIX MONTHS ENDED JUNE 30, 1998
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                Special Limited
                                          General              Limited              Partner
                                          Partners             Partners             (Note 1)              Total
                                        ------------         ------------         ------------        ------------
<S>                                     <C>                  <C>                <C>                   <C>         
      PARTNERSHIP INTERESTS                                     7,258,000
                                                             ============


      BALANCE, JANUARY 1, 1998          $   (274,234)        $ 37,903,781         $         --        $ 37,629,547

      DISTRIBUTIONS (Note 7)                 (12,020)          (1,190,024)                  --          (1,202,044)

      NET INCOME FOR THE SIX
      MONTHS ENDED JUNE 30, 1998              16,774            1,660,627                   --           1,677,401
                                        ------------         ------------         ------------        ------------

      BALANCE, JUNE 30, 1998            $   (269,480)        $ 38,374,384         $         --        $ 38,104,904
                                        ============         ============         ============        ============
</TABLE>



   The accompanying notes are an integral part of these financial statements.


<PAGE>   6

                  CENTURY HILLCRESTE APARTMENTS INVESTORS, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                            STATEMENTS OF CASH FLOWS

                     SIX MONTHS ENDED JUNE 30, 1998 AND 1997

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                1998                1997
                                                            -----------         -----------
<S>                                                         <C>                 <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                             $ 1,677,401         $ 1,096,978
     Adjustments to reconcile net income to net
       cash provided by operating activities:
        Depreciation                                            352,778             352,778
        Decrease in other assets                                 39,001              40,472
        Increase (decrease) in accounts payable and
         accrued liabilities                                     35,946            (173,242)
        Decrease in security deposits                            (3,992)            (17,826)
        Decrease in prepaid rent                                (10,034)            (54,239)
                                                            -----------         -----------

           Net cash provided by operating activities          2,091,100           1,244,921
                                                            -----------         -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Increase in rental property                                (12,242)           (354,534)
                                                            -----------         -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Distributions to partners                               (1,202,044)         (1,169,731)
                                                            -----------         -----------


NET INCREASE IN CASH AND CASH EQUIVALENTS                       876,814            (279,344)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                4,100,537           3,490,463
                                                            -----------         -----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                    $ 4,977,351         $ 3,211,119
                                                            ===========         ===========
</TABLE>



   The accompanying notes are an integral part of these financial statements.

<PAGE>   7

                  CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 1998


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         GENERAL

         The information contained in the following notes to the financial
         statements is condensed from that which would appear in the annual
         financial statements; accordingly, the financial statements included
         herein should be reviewed in conjunction with the financial statements
         and related notes thereto contained in the Annual Report for the year
         ended December 31, 1997 prepared by Century HillCreste Apartment
         Investors, L.P. (the "Partnership"). Accounting measurements at interim
         dates inherently involve greater reliance on estimates than at year
         end. The results of operations for the interim periods presented are
         not necessarily indicative of the results for the entire year.

         In the opinion of National Partnership Investments Corp. ("NAPICO"),
         the accompanying unaudited financial statements contain all adjustments
         (consisting primarily of normal recurring accruals) necessary to
         present fairly the financial position as of June 30, 1998, and the
         results of operations for the six and three months then ended and
         changes in cash flows for the six months then ended.

         ORGANIZATION

         The Partnership, a California limited partnership, was formed on June
         6, 1988, with NAPICO (the "Managing General Partner"), and HillCreste
         Properties Inc. (the "Non-Managing General Partner") as the general
         partners (collectively, the "General Partners"). On October 26, 1988,
         the Partnership issued to investors (the "Limited Partners") 7,258,000
         depositary units (each depositary unit being entitled to the beneficial
         interest of a limited partnership interest) for a total amount raised
         of $72,580,000, through a public offering.

         NAPICO is a wholly owned subsidiary of Casden Investment Corporation,
         which is wholly owned by Alan I. Casden.

         Concurrent with the issuance of the depository units, the Partnership
         purchased a 315-unit luxury apartment complex in the Century City area
         of Los Angeles (the "Property") from an affiliate of the Managing
         General Partner (the "Seller") for a purchase price of $68,548,000. To
         complete the purchase of the Property, the Seller purchased a 10
         percent special limited partnership interest in the Partnership for
         $6,855,000. The Partnership Agreement provides that the 10 percent
         special limited partnership interest is subordinate to the other
         Limited Partners' specified priority return in the case of
         distributions of net cash flow from operations, plus the other Limited
         Partners' return of capital in the case of net sales or refinancing
         distribution proceeds.



                                       5
<PAGE>   8

                  CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                  JUNE 30, 1998


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         USE OF ESTIMATES

         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and disclosure of contingent assets and liabilities at the
         date of the financial statements and reported amounts of revenues and
         expenses during the reporting period. Actual results could differ from
         those estimates.

         MINIMUM DISTRIBUTION GUARANTEE

         The minimum distribution guarantee payments from the seller have been
         reflected as a reduction in the carrying amount of the Property.

         DEPRECIATION

         Depreciation is reported using the straight-line method over the
         estimated useful lives of the buildings and equipment as follows:

<TABLE>
<S>                                                    <C>     
                    Buildings                          35 years
                    Furniture and equipment             5 years
</TABLE>

         CASH AND CASH EQUIVALENTS

         Cash and cash equivalents consists of cash and bank certificates of
         deposit with an original maturity of three months or less. The
         Partnership has its cash and cash equivalents on deposit primarily with
         one money market mutual fund. Such cash and cash equivalents are
         uninsured.

         RESTRICTED CASH

         Restricted cash consists of bank certificates of deposits assigned to
         the City of Los Angeles in lieu of purchasing a subdivision improvement
         bond to effectuate the privatization of city streets located within the
         Property's perimeter (see Note 5).

         INCOME TAXES

         No provision has been made for income taxes in the accompanying
         financial statements as such taxes, if any, are the liability of the
         partners.



                                       6
<PAGE>   9
                  CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 1998


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         NET INCOME PER DEPOSITORY UNIT

         Net income per depository unit was computed by dividing the limited
         partners' share of net income (99 percent) by the number of depository
         units outstanding during the year. The number of depository units was
         7,258,000 for the periods presented.

         IMPAIRMENT OF LONG-LIVED ASSETS

         The Partnership reviews long-lived assets to determine if there has
         been any permanent impairment whenever events or changes in
         circumstances indicate that the carrying amount of the asset may not be
         recoverable. If the sum of the expected future cash flows is less than
         the carrying amount of the assets, the Partnership recognizes an
         impairment loss.

NOTE 2 - RENTAL PROPERTY

         Rental property is carried at cost and consists of the following at
         June 30, 1998 and December 31, 1997:

<TABLE>
<CAPTION>
                                                  1998                 1997
                                              ------------         ------------
<S>                                           <C>                  <C>         
         Land                                 $ 16,175,000         $ 16,175,000
         Building                               24,694,402           24,694,402
         Furniture and equipment                 3,870,000            3,870,000
         Improvements                              839,349              827,107
                                              ------------         ------------
                                                45,578,751           45,566,509

         Less accumulated depreciation         (11,905,961)         (11,553,183)
                                              ------------         ------------

                                              $ 33,672,790         $ 34,013,326
                                              ============         ============
</TABLE>

         In a consent solicitation statement, dated July 21, 1998, NAPICO is
         seeking the consent of the unitholders of the Partnership to a proposal
         to compel the sale of the property to an affiliate of NAPICO for
         $58,500,000, payable in cash.

NOTE 3 - MINIMUM DISTRIBUTION GUARANTEE RECEIVABLE FROM PARTNER

         The Minimum Distribution Guarantee Agreement (the "Guarantee
         Agreement") required the Seller, who is also the Special Limited
         Partner, to make payments to the Partnership, if and when necessary, in
         an amount sufficient to enable the Partnership to provide the Limited
         Partners with distributions



                                       7
<PAGE>   10
                  CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 1998


NOTE 3 - MINIMUM DISTRIBUTION GUARANTEE RECEIVABLE FROM PARTNER (CONTINUED)

         sufficient to achieve a minimum annual return upon the Limited
         Partners' investment in the Partnership, through December 31, 1993, as
         follows:

<TABLE>
<CAPTION>
           Years Ended December 31,                  Annual Return on Investment
           ------------------------                  ---------------------------
<S>        <C>                                       <C> 
                     1988                                       8.0%
                     1989                                       8.0%
                     1990                                       8.5%
                     1991                                       9.0%
                     1992                                       9.0%
                     1993                                       9.0%
</TABLE>

         The Seller has funded a total of $13,130,998 directly to the
         Partnership for distributions to the Limited Partners pursuant to the
         Guarantee Agreement. This amount has been reflected as a reduction in
         the carrying amount of the Property. Commencing in 1994, distributions
         to the Partners have been made from cash flow from operations.

NOTE 4 - FEES PAID TO GENERAL PARTNERS AND AFFILIATES

         In accordance with the Partnership Agreement certain fees and
         reimbursements are paid to the General Partners and their affiliates as
         follows:

         (a)      A Partnership management fee payable to the Managing General
                  Partner of $50,000 annually. The fee is included in general
                  and administrative expenses.

         (b)      Partnership expense reimbursements not to exceed $50,000
                  annually are paid to the Non-Managing General Partner. The
                  Non-Managing General Partner expense reimbursement for 1990
                  through 1996 in the amount of $350,000, which were previously
                  disputed, were paid in the three months ended June 30, 1997.
                  Of this amount, $50,000 was expensed in 1990 and was included
                  in accounts payable and accrued liabilities. The balance of
                  $300,000 was expensed and included in general and
                  administrative expenses in the three months ended June 30,
                  1997.

         (c)      The Partnership is obligated to pay certain fees to the
                  Managing General Partner or its affiliates upon sale of the
                  Property. The payment of such fees is subordinated to certain
                  preferred returns to the Limited Partners.

         (d)      The Managing General Partner is entitled to receive 1 percent
                  of distributions (as defined in the Partnership Agreement).
                  This is paid quarterly by the Partnership to the Managing
                  General Partner.



                                       8
<PAGE>   11
                  CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 1998


NOTE 5 - COMMITMENTS AND CONTINGENCIES

         a.       Construction to "privatize" the streets and alleys providing
                  access to the Property and to construct wrought iron security
                  fencing with controlled entrances into the Property is now
                  complete at a cost to the Partnership of $839,349. The
                  Partnership pledged a certificate of deposit in the amount of
                  $158,700 to the City, to secure an improvement guarantee on
                  the additional construction of a storm drain and related
                  improvement, which is also complete. Upon final inspection,
                  the Partnership will receive its deposit of $158,700.

         b.       The Managing General Partner of the Partnership is a plaintiff
                  in various lawsuits and has also been named as a defendant in
                  other lawsuits arising from transactions in the ordinary
                  course of business. In the opinion of management and the
                  Managing General Partner, the claims will not result in any
                  material liability to the Partnership. In addition, the
                  Partnership is involved in the actions described below:

         c.       The Partnership, NAPICO, and several of NAPICO's officers,
                  directors and affiliates consented to the entry, on June 25,
                  1997, of an administrative cease and desist order by the U.S.
                  Securities and Exchange Commission (the "Commission"), without
                  admitting or denying any of the findings made by the
                  Commission. The order concerns, in part, the treatment of
                  Partnership funds deposited between September 1991 and July
                  1993 in a master disbursement account used by the
                  Partnership's previous property management company. The
                  Commission found that those funds should have been recorded on
                  the Partnership's books and reported in its financial
                  statements as related party accounts receivable rather than as
                  cash as done so by the Partnership's auditors. Although the
                  Commission found that this misclassification of current assets
                  violated federal securities laws, the Commission did not find
                  that these violations were intentional nor did the Commission
                  find that limited partners had suffered any loss or damage as
                  a result of these violations. Moreover, the Commission's order
                  does not impose any cost, burden or penalty on the Partnership
                  and does not impact NAPICO's ability to serve as the
                  Partnership's Managing General Partner.

                  The events that gave rise to the Commission's order occurred
                  in or before 1993. Subsequent corrective action by the
                  Partnership and its general partners precludes any recurrence
                  of the cash management issues described in the Commission's
                  order.

         d.       The Partnership has assessed the potential impact of the Year
                  2000 computer systems issue on its operations. The Partnership
                  believes that no significant actions are required to be taken
                  by the Partnership to address the issue and that the impact of
                  the Year 2000 computer systems issue will not materially
                  affect the Partnership's future operating results or financial
                  condition.



                                       9
<PAGE>   12
                  CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 1998


NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS

         Statement of Financial Accounting Standards No. 107, "Disclosure about
         Fair Value of Financial Instruments," requires disclosure of fair value
         information about financial instruments. The carrying amounts of assets
         and liabilities reported on the balance sheets that require such
         disclosure approximate fair value due to their short-term maturity.



                                       10
<PAGE>   13

                  CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                  JUNE 30, 1998


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

        CAPITAL RESOURCES AND LIQUIDITY

        The Partnership raised proceeds of $72,580,000 from the sale of
        depository units, pursuant to a public offering and received additional
        capital contributions from the General Partners of $1,050 and from the
        special limited partner of $6,855,000. Currently, the only sources of
        Partnership income consist of income from rental operations at the
        Property and interest earned on Partnership reserves.

        Construction to "privatize" the streets and alleys providing access to
        the Property and to construct wrought iron security fencing with
        controlled entrances into the Property is now complete at a cost to the
        Partnership of $839,349. The Partnership pledged a certificate of
        deposit in the amount of $158,700 to the City, to secure an improvement
        guarantee on the additional construction of a storm drain and related
        improvement, which is also complete. Upon final inspection, the
        Partnership will receive its deposit of $158,700.

        RESULTS OF OPERATIONS

        Occupancy averaged 98 percent and 97 percent for the six months ended
        June 30, 1998 and 1997, respectively. Rental income increased in 1998 as
        compared to 1997 as a result of the increase in occupancy and an
        increase in rental charges per unit. Included in the interest and other
        income is interest income earned on cash and cash equivalents of $70,000
        and $44,000 for the six months ended June 30, 1998 and 1997,
        respectively. Interest income increased in 1998 as compared to 1997 as a
        result of the increase in cash and cash equivalents from $4,100,537 at
        December 31, 1997 to $4,977,351 at June 30, 1998. The Partnership has
        its cash and cash equivalents on deposit primarily with one money market
        mutual fund.

        General and administrative expenses decreased for the six months ended
        June 30, 1998 as compared to June 30, 1997 primarily as a result of
        $300,000 in expense reimbursements to the Non-Managing General Partner
        for 1991 through 1996 which was expensed in 1997. In addition, legal
        fees decreased approximately $118,000 as a result of certain litigation
        which was resolved in 1997.

        The Partnership has assessed the potential impact of the Year 2000
        computer systems issue on its operations. The Partnership believes that
        no significant actions are required to be taken by the Partnership to
        address the issue and that the impact of the Year 2000 computer systems
        issue will not materially affect the Partnership's future operating
        results or financial condition.

        A real estate investment trust ("REIT") organized by affiliates of
        NAPICO has proposed to purchase the property owned by the Partnership. A
        consent solicitation statement has been sent to the limited partners
        setting forth the terms and conditions for the purchase of the property
        from the Partnership, together with an amendment to the Partnership
        Agreement and other disclosures of various conflicts of interest in
        connection with the transaction.



                                       11
<PAGE>   14

                  CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                  JUNE 30, 1998


ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND 
           RESULTS OF OPERATIONS (CONTINUED)

        RESULTS OF OPERATIONS (CONTINUED)

        The REIT proposes to purchase such property for $58,500,000 in cash,
        which it plans to raise in connection with a private placement of its
        equity securities. The purchase is conditioned upon, among other things,
        approval of the sale and the amendment by a majority-in-interest of the
        unitholders of the Partnership.



                                       12
<PAGE>   15

                  CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                 JUNE 30, 1998


PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

As of June 30, 1998, NAPICO, the Managing General Partner, was a plaintiff or
defendant in several lawsuits, which are unrelated to the Partnership. In
addition, the Partnership is involved in the actions described below:

Securities and Exchange Commission

The Partnership, NAPICO, and several of NAPICO's officers, directors and
affiliates consented to the entry, on June 25, 1997, of an administrative cease
and desist order by the U.S. Securities and Exchange Commission (the
"Commission"), without admitting or denying any of the findings made by the
Commission. The order concerns, in part, the treatment of Partnership funds
deposited between September 1991 and July 1993 in a master disbursement account
used by the Partnership's previous property management company. The Commission
found that those funds should have been recorded on the Partnership's books and
reported in its financial statements as related party accounts receivable rather
than as cash as done so by the Partnership's auditors. Although the Commission
found that this misclassification of current assets violated federal securities
laws, the Commission did not find that these violations were intentional nor did
the Commission find that limited partners had suffered any loss or damage as a
result of these violations. Moreover, the Commission's order does not impose any
cost, burden or penalty on the Partnership and does not impact NAPICO's ability
to serve as the Partnership's Managing General Partner.

The events that gave rise to the Commission's order occurred in or before 1993.
Subsequent corrective action by the Partnership and its general partners
precludes any recurrence of the cash management issues described in the
Commission's order.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

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



                                       13
<PAGE>   16

                  CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                  JUNE 30, 1998

                                   SIGNATURES


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


                                    CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
                                    (a California limited partnership)


                                    By:   National Partnership Investments Corp.
                                          Managing General Partner

                                        
                                          /s/ BRUCE NELSON
                                          --------------------------------------
                                          Bruce Nelson
                                          President


                                    Date:  8/14/98
                                          --------------------------------------


                                          /s/ CHARLES H. BOXENBAUM
                                          --------------------------------------
                                          Charles H. Boxenbaum
                                          Chief Executive Officer


                                    Date:  8/14/98
                                          --------------------------------------



                                       14