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

                                    FORM 10-K405

[x]  ANNUAL REPORT  PURSUANT  TO  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the fiscal year ended                December 31, 1995
                              --------------------------------------------------

                                       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  0-7162
                            -------


                       McNEIL PACIFIC INVESTORS FUND 1972
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         California                                   94-6279375
--------------------------------------------------------------------------------
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                        Identification No.)


             13760 Noel Road, Suite 700, LB70, Dallas, Texas, 75240
--------------------------------------------------------------------------------
        (Address of principal executive offices)            (Zip code)


Registrant's telephone number, including area code       (214)  448-5800
                                                  ------------------------------

Securities registered pursuant to Section 12(b) of the Act:  None
----------------------------------------------------------

Securities registered pursuant to Section 12(g) of the Act:  Limited partnership
                                                             units
----------------------------------------------------------

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]

13,702.5 of the  registrant's  13,752.5  limited  partnership  units are held by
non-affiliates  of this registrant.  The aggregate market value of units held by
non-affiliates  is not determinable  since there is no public trading market for
limited  partnership  units  and  transfers  of units  are  subject  to  certain
restrictions.

Documents Incorporated by Reference:        See Item 14, page 32.


                                TOTAL OF 34 PAGES


<PAGE>
                                     PART I

ITEM 1.      BUSINESS
-------      --------

ORGANIZATION
------------

McNeil Pacific Investors Fund 1972 (the  "Partnership") was organized  September
30, 1971 as a limited  partnership  under  provisions of the California  Uniform
Limited  Partnership  Act.  The  general  partner of the  Partnership  is McNeil
Partners,  L.P. (the "General  Partner"),  a Delaware  limited  partnership,  an
affiliate of Robert A. McNeil  ("McNeil").  The General Partner was elected at a
meeting of limited  partners on March 30, 1992, at which time the  Partnership's
restated  certificate  and agreement of limited  partnership  (the  "Partnership
Agreement") was amended.  Prior to March 30, 1992, Pacific Investors Corporation
(the  "Corporate  General  Partner"),  an  affiliate  of  Southmark  Corporation
("Southmark"),  and McNeil were the general  partners  of the  Partnership.  The
principal place of business for the Partnership and the General Partner is 13760
Noel Road, Suite 700, LB70, Dallas, Texas, 75240.

On March 8, 1972, a Registration  Statement on Form S-11 was declared  effective
by the Securities and Exchange  Commission  whereby the Partnership  offered for
sale $15,000,000 of limited  partnership  units  ("Units").  The Units represent
equity  interests  in  the  Partnership  and  entitle  the  holders  thereof  to
participate in certain  allocations and  distributions of the  Partnership.  The
sale of Units closed on April 30, 1973 with 13,795 Units sold for gross proceeds
of $13,795,000 to the Partnership.  The original  general partners  purchased 50
Units  for  $50,000.  37.5  and 5 Units  were  relinquished  in 1994  and  1995,
respectively, leaving 13,752.5 Units outstanding at December 31, 1995.

SOUTHMARK BANKRUPTCY AND CHANGE IN GENERAL PARTNER
--------------------------------------------------

On July 14, 1989,  Southmark filed a voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code. Neither the Partnership, McNeil, nor the
Corporate   General   Partner   were   included  in  the   filing.   Southmark's
reorganization  plan became  effective  August 10, 1990. Under the plan, most of
Southmark's  assets,  including  Southmark's  interest in the Corporate  General
Partner, are being sold or liquidated for the benefit of creditors.

In  accordance  with  Southmark's  reorganization  plan,  Southmark,  McNeil and
various of their affiliates  entered into an asset purchase agreement on October
12, 1990,  providing for, among other things,  the transfer of control to McNeil
or his affiliates of 34 limited partnerships  (including the Partnership) in the
Southmark portfolio.

On February 14,  1991,  pursuant to the asset  purchase  agreement as amended on
that date: (a) an affiliate of McNeil purchased the Corporate  General Partner's
economic  interest in the  Partnership;  (b) McNeil became the managing  general
partner of the Partnership  pursuant to an agreement with the Corporate  General
Partner  that  delegated  management  authority  to McNeil;  and (c) McNeil Real
Estate Management,  Inc. ("McREMI"), an affiliate of McNeil, acquired the assets
relating to the property management and partnership  administrative  business of
Southmark and its affiliates.


<PAGE>

On March 30,  1992,  the  limited  partners  approved a proposal  to (i) replace
McNeil and the Corporate  General Partner as general partners of the Partnership
with the General Partner, and (ii) amend the Partnership Agreement to (a) extend
the term of the Partnership from December 31, 1992, until December 31, 2002, (b)
provide for a limitation on  administrative  operating  expenses  equal to 2% of
tangible asset value, as defined,  and (c) provide for the  establishment  of an
oversight committee that will review and report on the Partnership's  compliance
with the 2% limitation on administrative operating expenses.

CURRENT OPERATIONS
------------------

General:

The Partnership is engaged in real estate  activities,  including the ownership,
operation and management of residential rental real estate and other real estate
related assets. At December 31, 1995, the Partnership owned one income-producing
property as described in Item 2 - Property.

The  Partnership  does not directly  employ any personnel.  The General  Partner
conducts the business of the  Partnership  directly and through its  affiliates.
The  Partnership  is managed by the  General  Partner.  In  accordance  with the
Partnership  Agreement,  the  Partnership  reimburses  affiliates of the General
Partner for certain  expenses  incurred by the affiliates in connection with the
management  of  the  Partnership.  See  Item  8  Note  2  -  "Transactions  With
Affiliates."

The business of the Partnership to date has involved only one industry  segment.
See Item 8 - Financial Statements and Supplementary Data. The Partnership has no
foreign operations. The business of the Partnership is not seasonal.

Business Plan:

The  Partnership's  anticipated  plan of  operations  for 1996 is to preserve or
increase the net operating income of its property  whenever  possible,  while at
the same time making  whatever  capital  expenditures  are reasonable  under the
circumstances  in order to preserve  and enhance the value of the  Partnership's
property. The General Partner is evaluating market and other economic conditions
to  determine  the  optimum  time to  commence  an  orderly  liquidation  of the
Partnership's   property  in  accordance  with  the  terms  of  the  Partnership
Agreement.  In  conjunction  therewith,  the General  Partner  will  continue to
explore potential avenues to enhance the value of the limited partners' Units in
the  Partnership,  which  may  include,  among  other  things,  asset  sales  or
refinancing of the Partnership's property followed by distributions.  See Item 7
-  Management's  Discussion  and Analysis of Financial  Condition and Results of
Operations.


<PAGE>

Competitive Conditions:

Since the  principal  business of the  Partnership  is to own and  operate  real
estate,  the Partnership is subject to all of the risks incident to ownership of
real estate and interests  therein,  many of which relate to the  illiquidity of
this type of  investment.  These  risks  include  changes  in  general  or local
economic conditions,  changes in supply or demand for competing properties in an
area,  changes in interest rates and  availability  of permanent  mortgage funds
which  may  render  the  sale  or  refinancing   of  a  property   difficult  or
unattractive, changes in real estate and zoning laws, increases in real property
tax rates and Federal or local  economic or rent  controls.  The  illiquidity of
real estate  investments  generally  impairs the ability of the  Partnership  to
respond  promptly  to  changed  circumstances.  The  Partnership  competes  with
numerous established companies, private investors (including foreign investors),
real estate investment trusts,  limited partnerships and other entities (many of
which have greater  resources than the Partnership) in connection with the sale,
financing  and  leasing  of  properties.  The  impact  of  these  risks  on  the
Partnership,   including   losses  from  operations  and   foreclosures  of  the
Partnership's properties,  are described in Item 7 - Management's Discussion and
Analysis of Financial Condition and Results of Operations. See Item 2 - Property
for discussion of competitive conditions at the Partnership's property.

Other information:

The environmental  laws of the Federal government and of certain state and local
governments  impose  liability  on current  property  owners for the clean-up of
hazardous and toxic substances discharged on the property. This liability may be
imposed  without  regard  to the  timing,  cause or person  responsible  for the
release of such substances onto the property.  The Partnership  could be subject
to such  liability  in the  event  that  the  property  has  such  environmental
problems.  The Partnership has no knowledge of any pending claims or proceedings
regarding such environmental problems.

In August 1995, High River Limited  Partnership,  a Delaware limited partnership
controlled by Carl C. Icahn ("High  River"),  made an  unsolicited  tender offer
(the "HR Offer") to purchase  from holders of Units up to  approximately  45% of
the outstanding  Units of the Partnership for a purchase price of $110 per Unit.
In  addition,  High River made  unsolicited  tender  offers  for  certain  other
partnerships controlled by the General Partner. The Partnership recommended that
the limited  partners  reject the HR Offer made with respect to the  Partnership
and not tender their Units  pursuant to the HR Offer.  The HR Offer  terminated,
after numerous extensions, on October 6, 1995. The General Partner believes that
as of February 29, 1996,  High River has  purchased  approximately  4.92% of the
outstanding Units pursuant to the HR Offer. In addition, all litigation filed by
High River,  Mr. Icahn and his  affiliates in  connection  with the HR Offer has
been dismissed without prejudice. See Item 3 - Legal Proceedings.


<PAGE>

ITEM 2.      PROPERTY
-------      --------

The  following  table sets forth the real  estate  investment  portfolio  of the
Partnership  at December  31,  1995.  The  buildings  and land on which they are
located  are owned by the  Partnership  in fee,  subject to a first lien deed of
trust as set forth more fully in Item 8 - Note 5 - "Mortgage  Note  Payable" and
Schedule III - "Real Estate  Investments and Accumulated  Depreciation."  In the
opinion of management, the property is adequately covered by insurance.

<TABLE>
<CAPTION>
                                            Net Basis                       1995           Date
Property              Description          of Property       Debt        Property Tax    Acquired
--------              -----------          -----------       ----        ------------    --------
<S>                   <C>                  <C>            <C>              <C>             <C> 
Palm Bay              Apartments
Orlando, FL           346 units            $6,335,493     $2,161,204       $101,961        6/91
                                            =========      =========        =======
</TABLE>

The following  table sets forth the  occupancy  rate and rent per square foot of
the Partnership's property for each of the last three years. This information is
not available for 1991 and 1990, the years before the Partnership reacquired the
property through foreclosure.

<TABLE>
<CAPTION>

                                                        1995          1994           1993            1992
                                                        -----         -----          -----           -----
Palm Bay
--------
   <S>                                                    <C>           <C>            <C>             <C>
   Occupancy Rate...................                      86%           82%            77%             73%
   Rent Per Square Foot.............                    $4.77         $4.58          $4.15           $3.71
</TABLE>

Occupancy rate  represents all units leased divided by the total number of units
of the  property  as of  December  31 of the given  year.  Rent per square  foot
represents all revenue, except interest,  derived from the property's operations
divided by the leasable square footage of the property.

Competitive Conditions - Palm Bay Apartments
--------------------------------------------

The financial performance of Palm Bay Apartments has improved as a result of the
capital renovation program.  Occupancy rates have risen from 63% at the date the
Partnership  repossessed  Palm Bay Apartments in 1992 to 86% at the end of 1995.
Occupancy  rates for the local area average 89%. Rental rates have also improved
due to the renovation program. The renovation program has made the property much
more competitive in its market.  The local area offers diverse  competition from
high quality property to low quality subsidized housing. The property's location
and  townhouse  units  give it a  competitive  edge in the  market.  Conversely,
several of the property's  competitors  offer  tax-subsidized  rental rates.  An
interior  upgrade  program  is  addressing  the dated  appearance  of the units'
interiors so that the property can compete effectively with the newer properties
in the area.


<PAGE>

ITEM 3.      LEGAL PROCEEDINGS
-------      -----------------

1)   High River Limited Partnership v. McNeil Partners,  L.P., McNeil Investors,
     Inc., McNeil Pacific Investors 1972, Ltd., McNeil Real Estate Fund V, Ltd.,
     McNeil Real Estate Fund IX, Ltd.,  McNeil Real Estate Fund X, Ltd.,  McNeil
     Real Estate Fund XI, Ltd.,  McNeil Real Estate Fund XIV, Ltd.,  McNeil Real
     Estate Fund XV, Ltd.,  McNeil Real Estate Fund XX, L.P., McNeil Real Estate
     Fund XXIV,  L.P.,  McNeil Real Estate Fund XXV, L.P.,  Robert A. McNeil and
     Carole J.  McNeil  (L95012) - High River  ("HR")  filed this  action in the
     United States District Court for the Southern  District of New York against
     McNeil Partners,  L.P., McNeil Investors,  Inc. and Mr. and Mrs. McNeil (as
     defined in this  Section 1,  collectively,  the  "Defendants")  requesting,
     among other  things,  names and  addresses  of the limited  partners in the
     partnerships   referenced   above  (as  defined  in  this  Section  1,  the
     "Partnerships"). The District Court issued a preliminary injunction against
     the Partnerships  requiring them to commence mailing materials  relating to
     the HR tender offer on August 14, 1995.

     On August 18, 1995, the Defendants  filed an Answer and  Counterclaim.  The
     Counterclaim  principally  asserts  (1)  the HR  tender  offers  have  been
     undertaken  in violation of the federal  securities  laws,  on the basis of
     material,  non-public,  and confidential  information,  and (2) that the HR
     offer documents omit and/or misrepresent certain material information about
     the HR tender offers.  The  Counterclaim  seeks a preliminary and permanent
     injunction   against  the   continuation  of  the  HR  tender  offers  and,
     alternatively,  ordering  corrective  disclosure  with respect to allegedly
     false and misleading statements contained in the tender offer documents.

     This action was dismissed without prejudice in November 1995.

2)   High River Limited Partnership v. McNeil Partners,  L.P., McNeil Investors,
     Inc., McNeil Pacific Investors 1972, Ltd., McNeil Real Estate Fund V, Ltd.,
     McNeil Real Estate Fund IX, Ltd.,  McNeil Real Estate Fund X, Ltd.,  McNeil
     Real Estate Fund XI, Ltd.,  McNeil Real Estate Fund XIV, Ltd.,  McNeil Real
     Estate Fund XV, Ltd.,  McNeil Real Estate Fund XX, L.P., McNeil Real Estate
     Fund XXIV,  L.P.,  McNeil Real Estate Fund XXV, L.P.,  Robert A. McNeil and
     Carole J. McNeil - United States  District Court for the Southern  District
     of New York, (Case No. 95 Civ. 9488) (Second Action).

     On November 7, 1995, High River filed a second  complaint with the District
     Court which alleges, inter alia, that McNeil Partners, L.P.'s (the "General
     Partner")  Schedule  14D-9 filed in  connection  with the High River tender
     offers was materially false and misleading,  in violation of Sections 14(d)
     and 14(e) of the Securities Exchange Act of 1934, 15 U.S.C.  Section 78n(d)
     and (e),  and the SEC  Regulations  promulgated  thereunder;  and that High
     River further  alleges that the General  Partner has wrongfully  refused to
     admit High River as a limited  partner to the ten  partnerships  referenced
     above.  Additionally,  High River purports to assert claims derivatively on
     behalf of McNeil  Real Estate  Fund IX,  Ltd.,  McNeil Real Estate Fund XI,
     Ltd.,  McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XXIV, L.P.
     and McNeil Real Estate Fund XXV, L.P., for breach of contract and breach of
     fiduciary  duty,  asserting  that the General  Partner  has  charged  these
     partnerships  excessive fees.  High River's  complaint  seeks,  inter alia,
     preliminary  injunctive  relief requiring the General Partner to admit High
     River as a limited partner in each of the ten partnerships referenced above
     and to transfer the tendered units of interest in the  partnerships to High
     River;  an  unspecified  award of  damages  payable  to High  River  and an
     additional   unspecified  award  of  damages  payable  to  certain  of  the
     partnerships;  an order that  defendants  must  discharge  their  fiduciary
     duties and must account for all fees they have received from certain of the
     partnerships; and attorneys' fees.


<PAGE>

     On January 31, 1996, this action was dismissed without prejudice.

3)   Robert Lewis v. McNeil Partners,  L.P., McNeil  Investors,  Inc., Robert A.
     McNeil  et al - In the  District  Court of  Dallas  County,  Texas,  A-14th
     Judicial  District,  Cause No. 95-08535 (Class Action) - Plaintiff,  Robert
     Lewis, is a limited partner with McNeil Pacific  Investors Fund 1972, Ltd.,
     McNeil Real Estate Fund X, Ltd. and McNeil Real Estate Fund XV, Ltd.

     Plaintiff  brings  this  action on his own behalf and as a class  action on
     behalf of the class of all  limited  partners of McNeil  Pacific  Investors
     Fund 1972, Ltd.,  McNeil Real Estate Fund V, Ltd.,  McNeil Real Estate Fund
     IX,  Ltd.,  McNeil Real  Estate  Fund X, Ltd.,  McNeil Real Estate Fund XI,
     Ltd.,  McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd.,
     McNeil Real Estate Fund XX,  L.P.,  McNeil Real Estate Fund XXIV,  L.P. and
     McNeil  Real  Estate  Fund XXV,  Ltd.  (as  defined in this  Section 3, the
     "Partnerships") as of August 4, 1995.

     Plaintiff  alleges that McNeil  Partners,  L.P.,  McNeil  Investors,  Inc.,
     Robert A. McNeil and other  senior  officers (as defined in this Section 3,
     collectively,  the "Defendants")  breached their fiduciary duties by, among
     other things,  (1) failing to attempt to sell the  properties  owned by the
     Partnerships (as defined in this Section 3, the "Properties") and extending
     the lives of the Partnerships  indefinitely,  contrary to the Partnerships'
     business plans, (2) paying  distributions to themselves and generating fees
     for their affiliates, (3) refusing to make significant distributions to the
     class members,  despite the fact that the  Partnerships  have positive cash
     flows and  substantial  cash  balances,  and (4)  failing  to take steps to
     create an auction market for equity interests of the Partnerships,  despite
     the fact that a third party bidder filed  tender  offers for  approximately
     forty-five     percent    (45%)   of   the outstanding units of each of the
     Partnerships.  Plaintiff also claims    that  Defendants  have breached the
     partnership  agreements of   the  Partnerships    by    failing   to   take
     steps  to  liquidate  the  Properties  and  by  their   alteration  of  the
     Partnerships'  primary  purposes,  their  acts in  contravention  of  these
     agreements,  and their use of the assets of the  Partnerships for their own
     benefit instead of for the benefit of the Partnerships.

     The Defendants deny that there is any merit to Plaintiff's  allegations and
     intend to vigorously defend this action.

4)   Alfred Napoletano v. McNeil Partners, L.P., McNeil Investors,  Inc., Robert
     A. McNeil,  Carole J. McNeil,  McNeil Pacific  Investors  Fund 1972,  Ltd.,
     McNeil Real Estate Fund V, Ltd.,  McNeil Real Estate Fund IX, Ltd.,  McNeil
     Real Estate Fund X, Ltd.,  McNeil  Real Estate Fund XI,  Ltd.,  McNeil Real
     Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate
     Fund XX, L.P.,  McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund
     XXV,  L.P.  -  Superior  Court of the  State of  California,  County of Los
     Angeles, Case No. BC133849 (Class Action Complaint)

     Plaintiff  brings this class action on behalf of a class of all persons and
     entities who are current owners of units and/or are limited partners in one
     or more of the partnerships referenced above (as defined in this Section 4,
     the "Partnerships").  Plaintiff alleges that McNeil Partners,  L.P., McNeil
     Investors,  Inc., Robert A. McNeil and other senior officers (as defined in
     this  Section  4,  collectively,  the  "Defendants")  have  breached  their
     fiduciary  duties to the class members by, among other  things,  (1) taking
     steps to prevent the  consummation  of the High River  tender  offers,  (2)
     failing to take steps to maximize unitholders' or limited partners' values,
     including  failure to liquidate the properties  owned by the  Partnerships,
     (3) managing the Partnerships so as to extend  indefinitely the present fee
     arrangements,  and (4) paying itself and entities  owned and  controlled by
     the  general  partner  excessive  fees and  reimbursements  of general  and
     administrative expenses.

<PAGE>

     The Defendants deny that there is any merit to Plaintiff's  allegations and
     intend to vigorously defend this action.

5)   Warren Heller v. McNeil Partners,  L.P., McNeil Investors,  Inc., Robert A.
     McNeil,  Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil
     Real Estate Fund V, Ltd.,  McNeil  Real Estate Fund IX,  Ltd.,  McNeil Real
     Estate Fund X, Ltd.,  McNeil Real Estate Fund XI, Ltd.,  McNeil Real Estate
     Fund XIV, Ltd.,  McNeil Real Estate Fund XV, Ltd.,  McNeil Real Estate Fund
     XX, L.P.,  McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV,
     L.P. - Superior  Court of the State of  California,  County of Los Angeles,
     Case No. BC133957 (Class Action Complaint)

     Plaintiff  brings this class action on behalf of a class of all persons and
     entities who are current owners of units and/or are limited partners in one
     or more of the partnerships referenced above (as defined in this Section 5,
     the "Partnerships").  Plaintiff alleges that McNeil Partners,  L.P., McNeil
     Investors,  Inc., Robert A. McNeil and other senior officers (as defined in
     this  Section  5,  collectively,  the  "Defendants")  have  breached  their
     fiduciary  duties to the class members by, among other  things,  (1) taking
     steps to prevent the  consummation  of the High River  tender  offers,  (2)
     failing to take steps to maximize unitholders' or limited partners' values,
     including  failure to liquidate the properties  owned by the  Partnerships,
     (3) managing the Partnerships so as to extend  indefinitely the present fee
     arrangements,  and (4) paying itself and entities  owned and  controlled by
     the  general  partner  excessive  fees and  reimbursements  of general  and
     administrative expenses.

     The Defendants deny that there is any merit to Plaintiff's  allegations and
     intend to vigorously defend this action.

For a discussion of  the Southmark bankruptcy, see Item 1 - Business.

ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
-------      ---------------------------------------------------

None.

                                     PART II

ITEM 5.      MARKET FOR THE REGISTRANT'S UNITS OF LIMITED PARTNERSHIP AND 
-------      ------------------------------------------------------------
             RELATED SECURITY HOLDER MATTERS
             -------------------------------

(A)      There is no established  public trading market for limited  partnership
         units, nor is one expected to develop.

(B)      Title of Class                            Number of Record Unit Holders
         --------------                            -----------------------------
         Limited partnership units                 1,285 as of February 16, 1996

(C)      No  distributions  were paid to the partners in 1995 or 1994,  and none
         are  anticipated  in 1996.  See Item 7 -  Management's  Discussion  and
         Analysis  of  Financial  Condition  and  Results  of  Operations  for a
         discussion  of  the  likelihood  that  the   Partnership   will  resume
         distributions to the partners.

<PAGE>

ITEM 6.    SELECTED FINANCIAL DATA
-------    -----------------------

The  following  table sets forth a summary  of  certain  financial  data for the
Partnership.  This summary should be read in conjunction with the  Partnership's
financial statements and notes thereto appearing in Item 8.

<TABLE>
<CAPTION>

Statements of                                                  Years Ended December 31,
Operations                                1995          1994             1993           1992           1991
------------------                    -----------    -----------     -----------    -----------    -----------
<S>                                   <C>            <C>             <C>            <C>            <C>        
Rental revenue...............         $ 1,376,148    $ 1,475,264     $ 1,894,385    $ 1,815,723    $   632,703
Gain on disposition of
   real estate...............                   -        574,701               -              -              -
Total revenue................           1,439,428      2,095,660       1,908,162      1,870,452      1,170,484
Loss on foreclosure of
   mortgage note
   receivable................                   -              -               -              -        (95,864)
Write-down for
   permanent impairment
   of real estate............                   -              -       2,700,000              -              -
Net income (loss)............            (285,886)       433,544      (3,102,551)      (816,851)        25,183

Net income (loss) per
   limited partnership unit..         $    (20.79)   $     48.52     $   (224.90)   $    (59.21)   $      1.83
                                       ==========     ==========      ==========     ==========     ==========


                                                                  As of December 31,
Balance Sheets                            1995          1994             1993           1992            1991
--------------                        -----------    -----------     -----------    -----------     -----------

Real estate investments, net...       $ 6,335,493    $ 6,239,081     $ 5,814,474    $11,528,672    $11,631,995
Asset held for sale, net.......                 -              -       3,209,269              -              -
Total assets...................         6,993,903      7,516,368       9,405,117     12,665,342     13,504,953
Mortgage notes payable.........         2,161,204      2,287,341       4,523,714      4,738,775      4,865,866
Partners' equity...............         4,714,982      5,000,868       4,567,324      7,669,875      8,486,726

</TABLE>

See Item 7 -  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations. The following property was sold by the Partnership.


                         Property                               Date Sold
                         --------                               ---------

                  Pacesetter Apartments                       March 17, 1994


<PAGE>

ITEM 7.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
-------      ---------------------------------------------------------------
             RESULTS OF OPERATIONS
             ---------------------

FINANCIAL CONDITION
-------------------

Since the sale of  Pacesetter  Apartments  on March 17,  1994,  the focus of the
Partnership's  efforts have been directed to the renovation  program at Palm Bay
Apartments (formerly known as Greentree Apartments).  From the three year period
ending  December 31, 1995,  the  Partnership  has completed  capital  renovation
projects totaling $1,555,223.  To date, occupancy at Palm Bay Apartments has not
recovered as much as was hoped.  As the capital  renovation  program winds down,
the  focus of the  Partnership  will  turn to  leasing  the  restored  units and
increasing operating efficiencies at the property.

RESULTS OF OPERATIONS
---------------------

1995 compared to 1994:

Revenue:

Rental  revenues  for 1995  decreased  $99,116  or 6.7%  compared  to 1994.  The
decrease is principally due to the sale of Pacesetter  Apartments in March 1994.
Rental  revenue  from  Palm  Bay  Apartments  increased  $54,794  or  4.1%.  The
Partnership was able to increase both occupancy and base rental rates due to the
major capital improvements undertaken at Palm Bay Apartments. The occupancy rate
at December 31, 1995 was 86%, up from 82% at December 31, 1994. The  Partnership
increased rental rates at Palm Bay Apartments an average of 2.9% in 1995.

The  Partnership  has not been able to increase  occupancy  rates or base rental
rates as quickly as was hoped.  Several  apartment  communities in the immediate
area have also  undergone  major  rehabilitation,  and several of the  competing
apartment  communities  are able to offer  their  units at rates  that have been
subsidized by various  government  programs.  The effect of the  competition has
restricted the increase in rental revenue that was otherwise  expected from Palm
Bay  Apartments.  Management is  implementing  various  marketing  strategies to
attempt to improve the revenue growth of the property.

Revenues  for  1994  also  include  the  one-time  gain on  sale  of  Pacesetter
Apartments in the amount of $574,701.

Expenses:

Partnership  expenses  increased  $63,198  or  3.8% in 1995  compared  to  1994.
However, after excluding expenses pertaining to Pacesetter Apartments,  expenses
increased  $238,253 or 18% in 1995  compared to 1994.  Increased  expenses  were
concentrated in depreciation,  repair and maintenance, other property operating,
and general and administrative.

The largest increase, on both an absolute and percentage basis, was the increase
in depreciation  expense.  Depreciation expense at Palm Bay Apartments increased
$121,331 or 54% in 1995 compared to 1994. The increase in  depreciation  expense
is due to the  continuing  investment  of  Partnership  resources  into  capital
improvements.  For the year 1995, the Partnership  invested  $440,906 in capital
improvements.  These capital  improvements are generally being  depreciated over
lives ranging from five to ten years.


<PAGE>

Repair and maintenance  expenses at Palm Bay increased $54,740 or 19% in 1995 as
compared to 1994.  The increased  level of repair and  maintenance  expenses are
attributable  to costs incurred  preparing  vacant units for rental.  Repair and
maintenance expenses will likely continue to increase until Palm Bay's occupancy
rate stabilizes.

Other  property  operating   expenses   increased   substantially  at  Palm  Bay
Apartments.  Efforts to refurbish down units and intensive leasing activity have
increased a number of expense  categories to unusually high levels.  The General
Partner  anticipates  that these expenses will moderate after the restored units
have been leased.  The increase in other property operating expenses at Palm Bay
Apartments totaled $61,564 or 47%.

Property  management fees - affiliates at Palm Bay Apartments  increased $14,390
or 22% in 1995 compared to 1994. An increase in rental receipts, upon which such
fees are based,  and the increase in the management fee percentage to 6% from 5%
(effective January 1, 1995) were the reasons for the increase.

General and  administrative for 1995 increased $34,678 or 116% compared to 1994.
The  Partnership  incurred  $44,554  of costs  relating  to the  evaluation  and
dissemination of information regarding an unsolicited tender offer.

General  and  administrative  -  affiliates  increased  $14,312  or 22% in  1995
compared  to 1994.  Reimbursements  to  affiliates  are  based,  in  part,  on a
declining number of properties managed by affiliates of the General Partner.

1994 compared to 1993:

Revenue:

Rental  revenues  for 1994  decreased  $419,121  or 22%  compared  to 1993.  The
decrease is entirely  attributable to the sale of Pacesetter Apartments in March
1994. Rental revenue from Palm Bay Apartments  increased  $125,713 or 10.5%. The
Partnership was able to increase both occupancy and base rental rates due to the
major  capital  improvements  undertaken at Palm Bay  Apartments.  Occupancy has
improved to 82%, and rental rates were increased 10.4%.

The sale of  Pacesetter  Apartments  in March 1994  generated a $574,701 gain on
disposition  of real  estate  in 1994.  Proceeds  from  the  sale of  Pacesetter
Apartments  substantially  increased the amounts of Partnership cash invested in
interest-bearing  accounts.  Interest revenue increased by $31,918 to $45,695 in
1994.

Expenses:

Total Partnership expenses decreased $3,348,597 or 67% in 1994 compared to 1993.
However,  most  of the  decrease  was due to the  $2.7  million  write-down  for
permanent  impairment of real estate  recorded by the  Partnership  during 1993.
Expenses also decreased due to the sale of Pacesetter  Apartments in March 1994.
Excluding these items,  expenses  increased  $41,611 or 3.0% in 1994 compared to
1993.

Interest expense  decreased  $159,483 or 39% in 1994 compared to 1993.  Interest
expense on the Palm Bay mortgage  note  decreased  4.5% as regular  monthly debt
service  payments  continue to reduce the outstanding  principal  balance of the
Palm Bay mortgage note. The rest of the decrease is  attributable to the sale of
Pacesetter Apartments in March 1994.


<PAGE>

The  extensive  capital  improvements  placed in service at Palm Bay  Apartments
during 1994 and 1993 have increased  charges for  depreciation.  Depreciation at
Palm  Bay  Apartments  increased  $34,841  or 18.5%  in 1994  compared  to 1993.
However, due to the sale of Pacesetter Apartments,  depreciation charges for the
Partnership decreased $13,651 or 5.0%.

The  Partnership  has benefited from decreased  property tax assessments at Palm
Bay  Apartments.  The poor condition of the property at the time the Partnership
repossessed  the property was  reflected in property  value  assessments  during
1994.  Property  taxes remitted to local taxing  jurisdictions  decreased 21% in
1994. It is probable that property tax assessments will increase in future years
if the capital  improvement program underway at Palm Bay Apartments restores the
value of the property to its former levels.

Personnel  expenses at Palm Bay  Apartments  increased  $26,046 or 11.8% in 1994
compared to 1993. Personnel expenses are expected to continue to increase due to
the  Partnership's   effort  to  increase  occupancy  rates  by  the  continuous
refurbishment of residential units and upgrading of services offered to tenants.
Such improvements are partially  achieved through higher  maintenance  standards
that require additional personnel and maintenance expenditures. Higher personnel
expenses  can  also  be  attributed  to  on-site  personnel  performing  certain
maintenance procedures that were formerly contracted to vendors.

Repairs and  maintenance  expenses at Palm Bay Apartments  increased  $24,574 or
9.2% in 1994 compared to 1993.  Increases in repairs and maintenance expense are
attributable to costs incurred  preparing  vacant units for rental.  Repairs and
maintenance  expenses will likely continue to increase for as long as Palm Bay's
occupancy  rate continues to increase.  Similarly,  property  management  fees -
affiliates at Palm Bay Apartments  will continue to increase as rental  revenues
increase.  For 1994, Palm Bay Apartments  recorded an 11.5% increase in property
management  fees -  affiliates,  in line  with  the  10.5%  increase  in  rental
revenues.

General and  administrative  expense for 1994 decreased $6,393 or 17.6% compared
to 1993. This decrease was due to savings the Partnership achieved through a new
tax processing and reporting  system and a reduction in legal fees.  General and
administrative  expenses paid to affiliates decreased $38,429 or 37% during 1994
compared to 1993.  Partnership  administrative  expenses paid to affiliates  are
based,  in large part, on the number of properties  owned by the Partnership and
other affiliated Partnerships.  The sale of Pacesetter Apartments in 1994 led to
a decrease in these expenses.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

The Partnership  generated $28,071 from operating activities in 1995, a decrease
of $134,292 from the $162,363  provided by operating  activities  in 1994.  Cash
paid to affiliates in 1995 included an $81,000 brokerage  commission on the sale
of Pacesetter Apartments that was incurred in 1994 but not paid until 1995.

The Partnership used its cash reserves to fund $440,906 of capital  improvements
to Palm Bay Apartments during 1995. An additional $126,137 was expended to repay
the Palm Bay mortgage note through monthly debt service payments. These payments
will gradually pay down the mortgage note balance until June 1997, when the Palm
Bay mortgage note matures.

<PAGE>

Short-term liquidity:

During  the  three  year  period  ended  December  31,  1995,  the   Partnership
experienced losses totaling $2,954,893. Cash used by operations during the three
year period totaled $44,925. An additional $1.56 million of cash was invested in
capital improvements at the Partnership's  properties.  The Partnership has used
its  cash  reserves  and  the  sale  of  Pacesetter  Apartments  to  fund  these
expenditures.  The  sale of  Pacesetter  Apartments  simultaneously  provided  a
substantial  addition to the  Partnership's  cash  reserves as well as removed a
substantial drain on Partnership resources.

Due to the sale of  Pacesetter  Apartments,  the  Partnership  entered 1995 with
adequate cash reserves.  A substantial  portion of the proceeds from the sale of
Pacesetter  Apartments  has been  invested in capital  improvements  at Palm Bay
Apartments.  The Partnership has budgeted  $90,000 of capital  improvements  for
1996 in addition to the $1.56  million of capital  improvements  made during the
three-year period ended December 31, 1995. The capital  improvements at Palm Bay
Apartments  are necessary to allow the property to increase its rental  revenues
and become competitive in the Orlando sub-market where the property is located.

At  December  31,  1995,  the  Partnership   held  $523,389  of  cash  and  cash
equivalents,  down  $538,972  from the  balance at the end of 1994.  The General
Partner  anticipates  that  cash  generated  from  operations  in  1996  will be
sufficient  to pay the  Partnership's  operating  expenses,  debt  service,  and
budgeted  capital  improvements.  The Partnership  will use its cash reserves to
fund any shortfall if operating cash flow should prove  insufficient to meet all
the  Partnership's  expected  expenditures.  The General  Partner  considers the
Partnership's cash reserves adequate for anticipated operations for 1996.

The General  Partner has  established a revolving  credit facility not to exceed
$5,000,000 in the aggregate  that is available on a  "first-come,  first-served"
basis to the Partnership and other affiliated partnerships if certain conditions
are met. Borrowings under the facility may be used to fund deferred maintenance,
refinancing  obligations and working  capital needs.  There is no assurance that
the  Partnership  will receive  additional  funds under the facility  because no
amounts  will be reserved  for any  particular  partnership.  As of December 31,
1995, $2,662,819 remains available from the facility;  however, additional funds
could become available as other partnerships  repay borrowings.  This commitment
will terminate on March 30, 1997.

Long-term liquidity:

For the long term,  property operations will remain the primary source of funds.
While the present outlook for the Partnership's  liquidity is favorable,  market
conditions  may change and  property  operations  may  deteriorate.  The General
Partner expects that the capital  improvements at Palm Bay Apartments will yield
improved cash flow from  operations in 1996.  Furthermore,  the  Partnership has
budgeted  an  additional  $90,000  of  capital  improvements  for  1996.  If the
Partnership's cash position deteriorates, the General Partner may elect to defer
certain of the capital improvements, except where such improvements are expected
to increase the competitiveness or marketability of the Partnership's property.

As an  additional  source of  liquidity,  the  General  Partner  may  attempt to
refinance the Palm Bay mortgage note. The General Partner  estimates that such a
refinancing  could  yield  proceeds to the  Partnership  in excess of the amount
needed to retire the current mortgage note.  However,  there can be no guarantee
that the Partnership  will be able to obtain such mortgage  refinancing on terms
or in amounts favorable to the Partnership,  or that the cash proceeds from such
refinancing  could  be  timed  to  coincide  with  the  liquidity  needs  of the
Partnership.

<PAGE>

Distributions:

Distributions  to partners have been suspended as part of the General  Partner's
policy of maintaining adequate cash reserves. Distributions to Unit holders will
remain suspended for the foreseeable  future.  The General Partner will continue
to monitor the cash  reserves and working  capital needs of the  Partnership  to
determine when cash flows will support distributions to the Unit holders.



<PAGE>


ITEM 8.      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------      -------------------------------------------

<TABLE>
<CAPTION>
                                                                        Page
                                                                        Number
                                                                        ------
INDEX TO FINANCIAL STATEMENTS

Financial Statements:

   <S>                                                                   <C>
   Report of Independent Public Accountants.....................          13

   Balance Sheets at December 31, 1995 and 1994.................          14

   Statements of Operations for each of the three years in the 
     period ended December 31, 1995.............................          15

   Statements of Partners' Equity for each of the three years 
     in the period ended December 31, 1995......................          16

   Statements of Cash Flows for each of the three years in the
     period ended December 31, 1995.............................          17

   Notes to Financial Statements................................          19

   Financial Statement Schedule:

     Schedule III - Real Estate Investment and Accumulated
         Depreciation...........................................          27


</TABLE>


All other schedules are omitted because they are not applicable or the financial
information  required  is  included  in the  financial  statements  or the notes
thereto.


<PAGE>



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Partners of
McNeil Pacific Investors Fund 1972:

We have audited the accompanying balance sheets of McNeil Pacific Investors Fund
1972 (a California  limited  partnership)  as of December 31, 1995 and 1994, and
the related  statements of operations,  partners' equity and cash flows for each
of the three  years in the period  ended  December  31,  1995.  These  financial
statements  and the  schedule  referred to below are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements and the schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

As further  discussed in Note 5 to the financial  statements,  the mortgage note
secured by the  Partnership's  only property is due and payable on June 1, 1997.
Management's current projections indicate that there will not be sufficient cash
flow from operations to fund that obligation.  Management is currently analyzing
the Partnership's options,  including refinancing the mortgage note or marketing
the property for sale.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of McNeil Pacific Investors Fund
1972 as of December 31, 1995 and 1994, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements  taken as a whole.  The  schedule  listed  in the index to
financial  statements is presented for purposes of complying with the Securities
and  Exchange  Commission's  rules  and  is not a part  of the  basic  financial
statements.  This schedule has been subjected to the auditing procedures applied
in our audits of the basic  financial  statements  and, in our  opinion,  fairly
states in all material  respects  the  financial  data  required to be set forth
therein in relation to the basic financial statements taken as a whole.


/s/  Arthur Andersen LLP



Dallas, Texas
   March 13, 1996



<PAGE>


                       McNEIL PACIFIC INVESTORS FUND 1972

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                     December 31,
                                                                           -------------------------------
                                                                               1995               1994
                                                                           ------------        -----------
ASSETS
------
   <S>                                                                     <C>                 <C>        
Real estate investment:
   Land.....................................................               $ 2,336,000         $ 2,336,000
   Buildings and improvements...............................                 5,010,483           4,569,577
                                                                            ----------          ----------
                                                                             7,346,483           6,905,577
   Less:  Accumulated depreciation..........................                (1,010,990)           (666,496)
                                                                            ----------          ----------
                                                                             6,335,493           6,239,081

Cash and cash equivalents...................................                   523,389           1,062,361
Cash segregated for security deposits.......................                    43,885              36,309
Accounts receivable.........................................                     3,849               3,741
Prepaid expenses and other assets...........................                    23,220              24,594
Escrow deposits.............................................                    49,353             125,181
Deferred borrowing costs, net of accumulated
   amortization of $37,220 and $26,833 at
   December 31, 1995 and 1994, respectively.................                    14,714              25,101
                                                                            ----------          ----------

                                                                           $ 6,993,903         $ 7,516,368
                                                                            ==========          ==========

LIABILITIES AND PARTNERS' EQUITY
--------------------------------

Mortgage note payable.......................................               $ 2,161,204         $ 2,287,341
Accounts payable............................................                    20,363              31,328
Accrued interest............................................                    10,076              16,679
Other accrued expenses......................................                    24,853              38,685
Payable to affiliates - General Partner.....................                    15,227              93,329
Security deposits and deferred rental revenue...............                    47,198              48,138
                                                                            ----------          ----------
                                                                             2,278,921           2,515,500
                                                                            ----------          ----------

Partners' equity:
   Limited partners - 15,000 limited partnership units
     authorized;  13,752.5 and 13,757.5 limited partnership
     units issued and outstanding at December 31, 1995 and
     1994, respectively.....................................                 4,405,038           4,690,924
   General Partner..........................................                   309,944             309,944
                                                                            ----------          ----------
                                                                             4,714,982           5,000,868
                                                                            ----------          ----------

                                                                           $ 6,993,903         $ 7,516,368
                                                                            ==========          ==========

</TABLE>





                 See accompanying notes to financial statements.


<PAGE>


                       McNEIL PACIFIC INVESTORS FUND 1972

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                              For the Years Ended December 31,
                                                   ----------------------------------------------------
                                                         1995               1994               1993
                                                   --------------     --------------    ---------------
   <S>                                             <C>                <C>               <C>            
Revenue:
   Rental revenue..........................        $    1,376,148     $    1,475,264    $     1,894,385
   Interest and other revenue..............                63,280             45,695             13,777
   Gain on disposition of real estate......                     -            574,701                  -
                                                    -------------      -------------     --------------
     Total revenue.........................             1,439,428          2,095,660          1,908,162
                                                    -------------      -------------     --------------

Expenses:
   Interest................................               198,948            249,827            409,310
   Depreciation............................               344,494            257,825            271,476
   Property taxes..........................               101,961            123,227            195,994
   Personnel expenses......................               242,331            293,231            366,775
   Repairs and maintenance.................               345,524            316,627            466,537
   Property management fees -
     affiliates............................                79,474             72,765             92,490
   Utilities...............................                81,054             86,617            162,959
   Other property operating expenses.......               186,282            165,741            204,094
   General and administrative..............                64,649             29,971             36,364
   General and administrative -
     affiliates............................                80,597             66,285            104,714
   Write-down for permanent
     impairment of real estate.............                     -                  -          2,700,000
                                                    -------------      -------------     --------------
     Total expenses........................             1,725,314          1,662,116          5,010,713
                                                    -------------      -------------     --------------

Net income (loss)..........................        $     (285,886)    $      433,544    $    (3,102,551)
                                                    =============      =============     ==============

Net income (loss) allocated to
   limited partners........................        $     (285,886)    $      667,558    $    (3,102,551)
Net loss allocated to General Partner......                     -           (234,014)                 -
                                                    -------------      -------------     --------------

Net income (loss)..........................        $     (285,886)    $      433,544    $    (3,102,551)
                                                    =============      =============     ==============

Net income (loss) per limited
   partnership unit........................        $       (20.79)    $        48.52    $       (224.90)
                                                    =============      =============     ==============

</TABLE>











                 See accompanying notes to financial statements.


<PAGE>


                       McNEIL PACIFIC INVESTORS FUND 1972

                         STATEMENTS OF PARTNERS' EQUITY

              For the Years Ended December 31, 1995, 1994 and 1993


<TABLE>
<CAPTION>
                                                                                                      Total
                                                    General                 Limited                 Partners'
                                                    Partner                 Partners                 Equity
                                                 ---------------         ---------------       ---------------
<S>                                              <C>                     <C>                   <C>            
Balance at December 31, 1992..............       $       543,958         $     7,125,917       $     7,669,875

Net loss..................................                     -              (3,102,551)           (3,102,551)
                                                  --------------          --------------        --------------

Balance at December 31, 1993..............               543,958               4,023,366             4,567,324

Net income (loss).........................              (234,014)                667,558               433,544
                                                  --------------          --------------        --------------

Balance at December 31, 1994..............               309,944               4,690,924             5,000,868

Net loss..................................                     -                (285,886)             (285,886)
                                                  --------------          --------------        --------------

Balance at December 31, 1995..............       $       309,944         $     4,405,038       $     4,714,982
                                                  ==============          ==============        ==============


</TABLE>
































                 See accompanying notes to financial statements.


<PAGE>


                       McNEIL PACIFIC INVESTORS FUND 1972

                            STATEMENTS OF CASH FLOWS

                Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>

                                                               For the Years Ended December 31,
                                                   -----------------------------------------------------
                                                        1995               1994               1993
                                                   --------------     --------------    ----------------
   <S>                                             <C>                <C>               <C>            
Cash flows from operating activities:
   Cash received from tenants..............        $    1,333,612     $    1,466,270    $     1,854,350
   Cash paid to suppliers..................              (909,351)          (923,620)        (1,193,122)
   Cash paid to affiliates.................              (238,173)           (63,881)          (194,294)
   Interest received.......................                63,280             45,695             13,777
   Interest paid...........................              (195,164)          (255,305)          (416,206)
   Property taxes paid.....................               (26,133)          (106,796)          (299,864)
                                                    -------------      -------------     --------------
Net cash provided by (used in)
    operating activities...................                28,071            162,363           (235,359)
                                                    -------------      -------------     --------------

Cash flows from investing activities:
   Additions to real estate
     investments...........................              (440,906)          (647,770)          (466,547)
   Proceeds from sale of real estate
     investment............................                     -          3,749,308                  -
                                                    -------------      -------------     --------------
Net cash provided by (used in)
    investing activities...................              (440,906)         3,101,538           (466,547)
                                                    -------------      -------------     --------------

Cash flows from financing activities:
   Principal payments on mortgage
     notes payable.........................              (126,137)          (142,238)          (215,061)
   Advances from affiliates................                     -                  -             50,000
   Repayment of advances from
     affiliates............................                     -            (50,000)                 -
   Retirement of mortgage note
     payable...............................                     -         (2,094,135)                 -
                                                    -------------      -------------     --------------
Net cash used in financing activities......              (126,137)        (2,286,373)          (165,061)
                                                    -------------      -------------     --------------

Net increase (decrease) in cash and
     cash equivalents......................              (538,972)           977,528           (866,967)

Cash and cash equivalents at
     beginning of year.....................             1,062,361             84,833            951,800
                                                    -------------      -------------     --------------

Cash and cash equivalents at end
     of year...............................        $      523,389     $    1,062,361    $        84,833
                                                    =============      =============     ==============
</TABLE>









                 See accompanying notes to financial statements.


<PAGE>


                       McNEIL PACIFIC INVESTORS FUND 1972

                            STATEMENTS OF CASH FLOWS

      Reconciliation of Net Income (Loss) to Net Cash Provided by (Used in)
                              Operating Activities


<TABLE>
<CAPTION>

                                                              For the Years Ended December 31,
                                                    ----------------------------------------------------
                                                         1995               1994               1993
                                                    --------------     -------------      --------------
<S>                                                 <C>                <C>                <C>           
Net income (loss)..........................         $    (285,886)     $     433,544      $  (3,102,551)
                                                     ------------       ------------       ------------

Adjustments to  reconcile  net income  
   (loss) to net cash provided by (used in)
   operating activities:
   Depreciation............................               344,494            257,825            271,476
   Amortization of deferred borrowing
     costs.................................                10,387             10,387             10,387
   Write-down for permanent
     impairment of real estate.............                     -                  -          2,700,000
   Gain on sale of real estate.............                     -           (574,701)                 -
   Changes in assets and liabilities:
     Cash segregated for security
       deposits............................                (7,576)            15,264            (18,676)
     Accounts receivable...................                  (108)             4,408             22,015
     Prepaid expenses and other
       assets..............................                 1,374             29,469            (27,937)
     Escrow deposits.......................                75,828             22,087            (98,215)
     Accounts payable......................               (10,965)           (92,800)            41,009
     Accrued property taxes................                     -             (5,656)            (5,655)
     Accrued interest......................                (6,603)           (15,865)           (17,283)
     Other accrued expenses................               (13,832)            12,227            (13,041)
     Payable to affiliates.................               (78,102)            75,169              2,910
     Security deposits and deferred
       rental revenue......................                  (940)            (8,995)               202
                                                     ------------       ------------       ------------

         Total adjustments.................               313,957           (271,181)         2,867,192
                                                     ------------       ------------       ------------

Net cash provided by (used in)
   operating activities....................         $      28,071      $     162,363      $    (235,359)
                                                     ============       ============       ============

</TABLE>












                 See accompanying notes to financial statements.


<PAGE>


                       McNEIL PACIFIC INVESTORS FUND 1972

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 1995


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------

Organization
------------

McNeil Pacific Investors Fund 1972 (the  "Partnership") was organized  September
30, 1971 as a limited  partnership  under  provisions of the California  Uniform
Limited  Partnership  Act.  The  general  partner of the  Partnership  is McNeil
Partners,  L.P. (the "General  Partner"),  a Delaware  limited  partnership,  an
affiliate of Robert A. McNeil  ("McNeil").  The General Partner was elected at a
meeting of limited  partners on March 30, 1992, at which time the  Partnership's
restated  certificate  and agreement of limited  partnership  (the  "Partnership
Agreement") was amended. Prior to March 30, 1992, Pacific Investors Corporation,
an affiliate of Southmark  Corporation,  and McNeil were the general partners of
the  Partnership.  The principal  place of business for the  Partnership and the
General Partner is 13760 Noel Road, Suite 700, LB70, Dallas, Texas, 75240.

The Partnership is engaged in real estate  activities,  including the ownership,
operation and management of residential rental real estate and other real estate
related assets. At December 31, 1995, the Partnership owned one income-producing
property as described in Note 4 - Real Estate Investments.

Basis of Presentation
---------------------

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

Real Estate Investment
----------------------

The real  estate  investment  is  generally  stated  at the lower of cost or net
realizable value. The real estate investment is monitored on an ongoing basis to
determine if the property has sustained a permanent impairment in value. At such
time,  a  write-down  is recorded to reduce the basis of the property to its net
realizable  value. A permanent  impairment is determined to have occurred when a
decline in property  value is considered to be other than  temporary  based upon
management's  expectations  with respect to projected  cash flows and prevailing
economic conditions.


<PAGE>

Improvements and betterments are capitalized and expensed  through  depreciation
charges. Repairs and maintenance are charged to operations as incurred.

In March 1995,  the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  No. 121,  "Accounting  for the  Impairment  of
Long-Lived  Assets and for Long-Lived  Assets to be Disposed Of." This statement
requires that long-lived assets and certain identifiable  intangibles to be held
and used by an entity be reviewed for impairment  whenever  events or changes in
circumstances  indicate  that  the  carrying  amount  of an  asset  may  not  be
recoverable.  This  statement is effective for financial  statements  for fiscal
years  beginning  after December 15, 1995. The  Partnership  has not adopted the
principles  of this  statement  within the  accompanying  financial  statements;
however,  it is not anticipated that adoption will have a material effect on the
carrying value of the Partnership's long-lived assets.

Depreciation
------------

Buildings and improvements are depreciated using the  straight-line  method over
the estimated useful lives of the assets, ranging from 2 to 25 years.

Cash and Cash Equivalents
-------------------------

Cash  and  cash  equivalents  include  cash on hand  and  cash on  deposit  with
financial  institutions  with  original  maturities  of  three  months  or less.
Carrying amounts for cash and cash equivalents approximate fair value.

Escrow Deposits
---------------

The  Partnership  is required to maintain an escrow  account in accordance  with
terms of the Palm Bay mortgage  note.  This escrow  account is controlled by the
mortgagee and is used for payment of property taxes. Carrying amounts for escrow
deposits approximate fair value.

Deferred Borrowing Costs
------------------------

Loan fees and  other  related  costs  incurred  to  obtain  or modify  long-term
financing on real property are  capitalized  and  amortized  using a method that
approximates  the  effective  interest  method  over the  terms  of the  related
mortgage notes payable.  Amortization of deferred borrowing costs is included in
interest expense on the Statements of Operations.

Rental Revenue
--------------

The Partnership  leases its property under short-term  operating  leases.  Lease
terms generally are less than one year in duration. Rental revenue is recognized
as earned.

Income Taxes
------------

No provision for Federal  income taxes is necessary in the financial  statements
of the  Partnership  because,  as a  partnership,  it is not  subject to Federal
income tax and the tax effect of its activities accrues to the partners.


<PAGE>

Allocation of Net Income and Net Loss
-------------------------------------

The Partnership  Agreement provides that income will be allocated to the General
Partner  to the  extent of  distributions  to the  General  Partner of cash from
sales, refinancings,  or from working capital reserves. All remaining net income
and all losses are allocated 100% to the limited partners.

An estimated  gain on the ultimate  disposition  of  Pacesetter  Apartments  was
allocated  to the General  Partner in 1982 based upon a 1982 sales  contract for
Pacesetter  Apartments.  An  adjustment  was made in 1994 to adjust  the  amount
allocated  to  the  General  Partner  based  on  the  1994  sale  of  Pacesetter
Apartments.

Federal  income tax law provides  that the  allocation of loss to a partner will
not be  recognized  unless the  allocation  is in  accordance  with a  partner's
interest in the partnership or the allocation has substantial  economic  effect.
Internal  Revenue  Code Section  704(b) and  accompanying  Treasury  Regulations
establish  criteria for  allocations of Partnership  deductions  attributable to
debt. The  Partnership's  tax allocations for 1995, 1994 and 1993 have been made
in accordance with these provisions.

Distributions
-------------

At the  discretion of the General  Partner,  distributions  to partners are paid
from operations of the  Partnership's  properties,  from sales or refinancing of
properties,  or from cash  maintained  as working  capital  reserves.  Cash from
operations is distributed 100% to the limited partners.

Distributions  of cash from sales and refinancings and cash from working capital
reserves are made in the following order:

(a)     First to the  limited  partners  in an  amount,  when added to all prior
        distributions  to the limited  partners of  disposition  proceeds,  that
        equals  109.6% of the  portion  of net  offering  proceeds  invested  in
        property sold; then,

(b)     of the remaining balance, 90.5% to the limited partners and 9.5% to  the
        General Partner.

No distributions were paid to the partners during 1995, 1994 or 1993.

Net Income (Loss) Per Limited Partnership Unit
----------------------------------------------

Net income (loss) per limited partnership unit ("Units") is computed by dividing
net income  (loss)  allocated to the limited  partners by the  weighted  average
number of Units  outstanding.  Per Unit  information  has been computed based on
13,752.5,  13,757.5  and  13,795  Units  outstanding  in 1995,  1994  and  1993,
respectively.

NOTE 2 - TRANSACTIONS WITH AFFILIATES
-------------------------------------

The General Partner is entitled to receive a partnership management fee equal to
9.5% of  distributions  of cash from  operations  when  distributable  cash from
operations is distributed  to the limited  partners.  No partnership  management
fees were incurred during 1995, 1994 or 1993.


<PAGE>

The  Partnership  pays property  management fees equal to 6% of the gross rental
receipts of the Partnership's properties to McNeil Real Estate Management,  Inc.
("McREMI"),  an  affiliate  of  the  General  Partner,  for  providing  property
management  and leasing  services  for the  Partnership's  properties.  Prior to
January 1, 1995, the  Partnership  paid property  management fees equal to 5% of
gross rental receipts.

The  Partnership  reimburses  McREMI  for  its  costs,  including  overhead,  of
administering the Partnership's affairs.

The General  Partner is entitled to receive a sales  commission as  compensation
for selling Partnership property equal to the lesser of 4% of the sales price of
the  property  sold or the  customary  fee  charged by  independent  real estate
brokers in the area where the property is located.  The  Partnership  accrued an
$81,000  sales  commission  in  connection  with  the  1994  sale of  Pacesetter
Apartments. The sales commission was paid in 1995.

The General  Partner has  established a revolving  credit facility not to exceed
$5,000,000 in the aggregate  which is available on a "first-come,  first-served"
basis to the  Partnership  and other  partnerships  affiliated  with the General
Partner if certain conditions are met. Borrowings under the facility may be used
to fund deferred maintenance, refinancing obligations and working capital needs.
The  Partnership  had $50,000 of  outstanding  borrowings  under the facility at
December 31, 1993. The $50,000 was repaid in 1994.  Borrowings from the facility
are  unsecured,  due on demand and accrue  interest at the prime lending rate of
Bank of America plus 1%. As of December 31, 1995,  $2,662,819 remained available
for  borrowing  under the  facility;  however,  additional  funds  could  become
available as other partnerships repay borrowings. This commitment will terminate
on March 30, 1997.

Compensation and  reimbursements  paid or accrued for the benefit of the General
Partner or its affiliates are as follows:

<TABLE>
<CAPTION>

                                                                 For the Years Ended December 31,
                                                        -----------------------------------------------
                                                          1995               1994               1993
                                                        ---------          ---------          ---------
<S>                                                     <C>                <C>                <C>      
Property management fees -
   affiliates..............................             $  79,474          $  72,765          $  92,490
Charged to general and
   administrative - affiliates:
   Partnership administration..............                80,597             66,285            104,714
Charged to gain on disposition
   of real estate:
   Brokerage commission....................                     -             81,000                  -
                                                         --------           --------           --------

                                                        $ 160,071         $  220,050          $ 197,204
                                                         ========          =========           ========
</TABLE>

Payable to  affiliates  - General  Partner at  December  31,  1995  consists  of
property  management  fees and  reimbursable  administrative  costs.  Payable to
affiliates  - General  Partner  at  December  31,  1994  consists  of  brokerage
commissions, property management fees and reimbursable administrative costs. All
amounts are due and payable from current operations.

<PAGE>

NOTE 3 - TAXABLE INCOME
-----------------------

McNeil  Pacific  Investors  Fund 1972 is a  partnership  and is not  subject  to
Federal and state income taxes.  Accordingly,  no recognition  has been given to
income taxes in the accompanying  financial  statements of the Partnership since
the income or loss of the  Partnership  is to be  included in the tax returns of
the  individual  partners.  The tax  returns of the  Partnership  are subject to
examination by Federal and state taxing authorities. If such examinations result
in  adjustments  to  distributive  shares of  taxable  income  or loss,  the tax
liability of the partners could be adjusted accordingly.

The  Partnership's net assets and liabilities for financial  reporting  purposes
exceeded the net assets and  liabilities for tax purposes by $1,948,374 in 1995,
$1,973,149 in 1994 and $1,490,685 in 1993.

NOTE 4 - REAL ESTATE INVESTMENTS
--------------------------------

The  Partnership  recorded  the Palm Bay  (formerly  Greentree)  and  Pacesetter
mortgage  notes  receivable as  in-substance  foreclosures  on June 21, 1991 and
September  30,  1991,  respectively.  The  Partnership  began  recording  rental
revenues  and  expenses of the  properties  as of the dates of the  in-substance
foreclosures.   The  Partnership  began  recording  cash  flows  from  operating
activities as of the dates the properties were foreclosed, May 28, 1992 for Palm
Bay Apartments and January 7, 1993 for Pacesetter Apartments.

The Partnership had limited financial resources to fund capital improvements and
refurbishments  that the General  Partner  considered  necessary  to restore the
properties to their proper operating  condition.  The availability of additional
mortgage financing or loans from affiliates was also  questionable.  Without the
needed capital  improvements and refurbishments,  it was doubtful the properties
would have been able to  generate  operating  income  sufficient  to support the
carrying value of the properties.  Due to the uncertainty of how the Partnership
would fund needed capital  improvements and refurbishments,  the General Partner
concluded  that the  value of the  properties  had  been  permanently  impaired.
Therefore,  on June 30, 1993, the  Partnership  wrote down the carrying value of
Palm Bay Apartments by $800,000 and Pacesetter Apartments by $1,900,000 to state
the properties at their estimated realizable values.

During the fourth  quarter of 1993, it became  apparent  that the  Partnership's
cash resources  would be exhausted  before  operations at Pacesetter  Apartments
could be restored to a level that would be adequate to pay required debt service
payments on the Pacesetter mortgage note. The General Partner determined that it
would be in the best interest of the Partnership to sell Pacesetter  Apartments.
On March 17,  1994,  the property  was sold (See Note 6 -  "Disposition  of Real
Estate Investment").


<PAGE>

The  basis  and  accumulated  depreciation  of  the  Partnership's  real  estate
investment at December 31, 1995 and 1994, is set forth in the following table:


<TABLE>
<CAPTION>
                                                  Buildings and       Accumulated       Net Book
      1995                         Land           Improvements        Depreciation        Value 
      ----                      -------------     -------------      -------------     -----------
<S>                             <C>                <C>               <C>               <C>            
Palm Bay
   Orlando, FL                  $   2,336,000     $ 5,010,483        $ (1,010,990)     $ 6,335,493
                                 ============      ==========         ===========       ==========


                                                   Buildings and      Accumulated       Net Book
       1994                         Land           Improvements       Depreciation        Value
       ----                     -------------     --------------     -------------     -----------

Palm Bay                        $   2,336,000     $ 4,569,577        $   (666,496)     $ 6,239,081
                                 ============      ==========         ===========       ==========
</TABLE>

NOTE 5 - MORTGAGE NOTE PAYABLE
------------------------------

The following table sets forth the  Partnership's  mortgage note at December 31,
1995 and 1994.  The mortgage  note is secured by the  Partnership's  real estate
investment.

<TABLE>
<CAPTION>
                         Mortgage         Annual       Monthly
                         Lien             Interest     Payments/                       December 31,
Property                 Position    (a)  Rates %      Maturity Date (c)           1995            1994
--------                 ---------------  -------      -----------------      -------------    ------------
<S>                      <C>               <C>         <C>       <C>          <C>              <C>         
Palm Bay                 First             8.750       $26,775  06/97(b)      $   2,161,204    $  2,287,341
                                                                               ============     ===========
</TABLE>

(a)     The debt is non-recourse to the Partnership.

(b)     The Palm Bay mortgage note matures in June 1997. At that time, a balloon
        payment of approximately $1,975,000 will be due.

(c)     Principal maturities of the mortgage note after  December 31, 1995,  are
        as follows:
<TABLE>
<CAPTION>

                  <S>                                             <C>     
                  1996....................................        $   137,627
                  1997....................................          2,023,577
                                                                   ----------

                                                                  $ 2,161,204
                                                                   ==========
</TABLE>


<PAGE>

Based on borrowing rates  currently  available to the Partnership for a mortgage
loan with similar terms and average  maturities,  the fair value of the mortgage
note payable was approximately $2,101,900 at December 31, 1995.

As indicated  above,  the  mortgage  note is secured by the  Partnership's  only
property  and  is  due  and  payable  on  June  1,  1997.  Management's  current
projections indicate that there will not be sufficient cash flow from operations
to fund that  obligation.  Management is currently  analyzing the  Partnership's
options,  including  refinancing the mortgage note or marketing the property for
sale.

NOTE 6 - DISPOSITION OF REAL ESTATE INVESTMENT
----------------------------------------------

On March 17, 1994, the Partnership sold its investment in Pacesetter  Apartments
to an  unaffiliated  buyer for a cash sales price of  $4,050,000.  Cash proceeds
from this transaction, as well as the gain on sale are detailed below.

<TABLE>
<CAPTION>
                                                                    Gain on Sale            Cash Proceeds
                                                                  -----------------       -----------------

       <S>                                                        <C>                     <C>             
       Sales price........................................        $      4,050,000        $      4,050,000
       Selling costs......................................                (300,692)               (300,692)
       Basis of real estate sold..........................              (3,174,607)
                                                                   ---------------

       Gain on sale.......................................        $        574,701
                                                                   ===============
                                                                                           ---------------
       Proceeds from sale of real estate..................                                       3,749,308
       Retirement of mortgage note........................                                      (2,094,135)
                                                                                           ---------------

       Net cash proceeds..................................                                $      1,655,173
                                                                                           ===============
</TABLE>

NOTE 7 - LEGAL PROCEEDINGS
--------------------------

1)   High River Limited Partnership v. McNeil Partners,  L.P., McNeil Investors,
     Inc., McNeil Pacific Investors 1972, Ltd., McNeil Real Estate Fund V, Ltd.,
     McNeil Real Estate Fund IX, Ltd.,  McNeil Real Estate Fund X, Ltd.,  McNeil
     Real Estate Fund XI, Ltd.,  McNeil Real Estate Fund XIV, Ltd.,  McNeil Real
     Estate Fund XV, Ltd.,  McNeil Real Estate Fund XX, L.P., McNeil Real Estate
     Fund XXIV,  L.P.,  McNeil Real Estate Fund XXV, L.P.,  Robert A. McNeil and
     Carole J.  McNeil  (L95012) - High River  ("HR")  filed this  action in the
     United States District Court for the Southern  District of New York against
     McNeil Partners,  L.P., McNeil Investors,  Inc. and Mr. and Mrs. McNeil (as
     defined in this  Section 1,  collectively,  the  "Defendants")  requesting,
     among other  things,  names and  addresses  of the limited  partners in the
     partnerships   referenced   above  (as  defined  in  this  Section  1,  the
     "Partnerships"). The District Court issued a preliminary injunction against
     the Partnerships  requiring them to commence mailing materials  relating to
     the HR tender offer on August 14, 1995.

<PAGE>

     On August 18, 1995, the Defendants  filed an Answer and  Counterclaim.  The
     Counterclaim  principally  asserts  (1)  the HR  tender  offers  have  been
     undertaken  in violation of the federal  securities  laws,  on the basis of
     material,  non-public,  and confidential  information,  and (2) that the HR
     offer documents omit and/or misrepresent certain material information about
     the HR tender offers.  The  Counterclaim  seeks a preliminary and permanent
     injunction   against  the   continuation  of  the  HR  tender  offers  and,
     alternatively,  ordering  corrective  disclosure  with respect to allegedly
     false and misleading statements contained in the tender offer documents.

     This action was dismissed without prejudice in November 1995.

2)   High River Limited Partnership v. McNeil Partners,  L.P., McNeil Investors,
     Inc., McNeil Pacific Investors 1972, Ltd., McNeil Real Estate Fund V, Ltd.,
     McNeil Real Estate Fund IX, Ltd.,  McNeil Real Estate Fund X, Ltd.,  McNeil
     Real Estate Fund XI, Ltd.,  McNeil Real Estate Fund XIV, Ltd.,  McNeil Real
     Estate Fund XV, Ltd.,  McNeil Real Estate Fund XX, L.P., McNeil Real Estate
     Fund XXIV,  L.P.,  McNeil Real Estate Fund XXV, L.P.,  Robert A. McNeil and
     Carole J. McNeil - United States  District Court for the Southern  District
     of New York, (Case No. 95 Civ. 9488) (Second Action).

     On November  7, 1995,  High River  filed  a   second  complaint  with   the
     District Court which alleges, inter alia, that   McNeil  Partners,  L.P.'s
     (the "General  Partner")  Schedule  14D-9  filed  in  connection  with  the
     High River  tender   offers  was   materially   false  and  misleading,  in
     violation of  Sections 14(d)  and   14(e) of the   Securities  Exchange Act
     of 1934,  15 U.S.C.  Section  78n(d) and (e), and  the   SEC    Regulations
     promulgated  thereunder;  and that High River further  alleges   that   the
     General  Partner  has  wrongfully    refused    to  admit  High  River as a
     limited   partner   to   the    ten    partnerships   referenced     above.
     Additionally,  High  River   purports to  assert  claims   derivatively  on
     behalf  of  McNeil  Real  Estate  Fund IX,  Ltd.,  McNeil  Real Estate Fund
     XI, Ltd.,  McNeil Real  Estate  Fund XV,  Ltd.,  McNeil  Real  Estate  Fund
     XXIV,  L.P.   and  McNeil   Real  Estate  Fund XXV,  L.P.,  for  breach  of
     contract  and breach  of  fiduciary   duty,  asserting   that  the  General
     Partner has charged these  partnerships  excessive   fees.   High  River's
     complaint seeks, inter alia,   preliminary  injunctive   relief   requiring
     the General  Partner to admit  High  River  as  a  limited  partner in each
     of the ten  partnerships   referenced  above  and  to transfer the tendered
     units of interest  in  the  partnerships   to  High  River;  an unspecified
     award of damages  payable to  High  River  and  an  additional  unspecified
     award of damages payable  to  certain  of  the  partnerships; an order that
     defendants  must  discharge  their  fiduciary   duties and must account for
     all fees they  have  received   from  certain  of  the   partnerships;  and
     attorneys'   fees.   On  January   31,  1996,  this  action  was  dismissed
     without prejudice.


<PAGE>

3)   Robert Lewis v. McNeil Partners, L.P.,   McNeil   Investors,  Inc.,  Robert
     A.  McNeil  et al -   In   the   District  Court of Dallas  County,  Texas,
     A-14th  Judicial    District,     Cause  No.  95-08535   (Class  Action)  -
     Plaintiff,  Robert  Lewis,  is a   limited    partner  with McNeil  Pacific
     Investors   Fund 1972, Ltd.,  McNeil Real Estate Fund X,   Ltd.  and McNeil
     Real Estate Fund XV, Ltd.

     Plaintiff  brings  this  action on his own behalf and as a class  action on
     behalf of the class of all  limited  partners of McNeil  Pacific  Investors
     Fund 1972, Ltd.,  McNeil Real Estate Fund V, Ltd.,  McNeil Real Estate Fund
     IX,  Ltd.,  McNeil Real  Estate  Fund X, Ltd.,  McNeil Real Estate Fund XI,
     Ltd.,  McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd.,
     McNeil Real Estate Fund XX,  L.P.,  McNeil Real Estate Fund XXIV,  L.P. and
     McNeil  Real  Estate  Fund XXV,  Ltd.  (as  defined in this  Section 3, the
     "Partnerships") as of August 4, 1995.

     Plaintiff  alleges that McNeil  Partners,  L.P.,  McNeil  Investors,  Inc.,
     Robert A. McNeil and other  senior  officers (as defined in this Section 3,
     collectively,  the "Defendants")  breached their fiduciary duties by, among
     other things,  (1) failing to attempt to sell the  properties  owned by the
     Partnerships (as defined in this Section 3, the "Properties") and extending
     the lives of the Partnerships  indefinitely,  contrary to the Partnerships'
     business plans, (2) paying  distributions to themselves and generating fees
     for their affiliates, (3) refusing to make significant distributions to the
     class members,  despite the fact that the  Partnerships  have positive cash
     flows and  substantial  cash  balances,  and (4)  failing  to take steps to
     create an auction market for equity interests of the Partnerships,  despite
     the fact that a third party bidder filed  tender  offers for  approximately
     forty-five   percent  (45%)  of  the  outstanding  units  of  each  of  the
     Partnerships.  Plaintiff  also claims that  Defendants  have  breached  the
     partnership  agreements  of the  Partnerships  by  failing to take steps to
     liquidate  the  Properties  and by their  alteration  of the  Partnerships'
     primary  purposes,  their acts in  contravention of these  agreements,  and
     their use of the assets of the  Partnerships  for their own benefit instead
     of for the benefit of the Partnerships.

     The Defendants deny that there is any merit to Plaintiff's  allegations and
     intend to vigorously defend this action.

4)   Alfred Napoletano v. McNeil Partners, L.P., McNeil Investors,  Inc., Robert
     A. McNeil,  Carole J. McNeil,  McNeil Pacific  Investors  Fund 1972,  Ltd.,
     McNeil Real Estate Fund V, Ltd.,  McNeil Real Estate Fund IX, Ltd.,  McNeil
     Real Estate Fund X, Ltd.,  McNeil  Real Estate Fund XI,  Ltd.,  McNeil Real
     Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate
     Fund XX, L.P.,  McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund
     XXV,  L.P.  -  Superior  Court of the  State of  California,  County of Los
     Angeles, Case No. BC133849 (Class Action Complaint)

     Plaintiff  brings this class action on behalf of a class of all persons and
     entities who are current owners of units and/or are limited partners in one
     or more of the partnerships referenced above (as defined in this Section 4,
     the "Partnerships").  Plaintiff alleges that McNeil Partners,  L.P., McNeil
     Investors,  Inc., Robert A. McNeil and other senior officers (as defined in
     this  Section  4,  collectively,  the  "Defendants")  have  breached  their
     fiduciary  duties to the class members by, among other  things,  (1) taking
     steps to prevent the  consummation  of the High River  tender  offers,  (2)
     failing to take steps to maximize unitholders' or limited partners' values,
     including  failure to liquidate the properties  owned by the  Partnerships,
     (3) managing the Partnerships so as to extend  indefinitely the present fee
     arrangements,  and (4) paying itself and entities  owned and  controlled by
     the  general  partner  excessive  fees and  reimbursements  of general  and
     administrative expenses.

<PAGE>

     The Defendants deny that there is any merit to Plaintiff's  allegations and
     intend to vigorously defend this action.

5)   Warren Heller v. McNeil Partners,  L.P., McNeil Investors,  Inc., Robert A.
     McNeil,  Carole J. McNeil, McNeil Pacific Investors Fund 1972, Ltd., McNeil
     Real Estate Fund V, Ltd.,  McNeil  Real Estate Fund IX,  Ltd.,  McNeil Real
     Estate Fund X, Ltd.,  McNeil Real Estate Fund XI, Ltd.,  McNeil Real Estate
     Fund XIV, Ltd.,  McNeil Real Estate Fund XV, Ltd.,  McNeil Real Estate Fund
     XX, L.P.,  McNeil Real Estate Fund XXIV, L.P., McNeil Real Estate Fund XXV,
     L.P. - Superior  Court of the State of  California,  County of Los Angeles,
     Case No. BC133957 (Class Action Complaint)

     Plaintiff  brings this class action on behalf of a class of all persons and
     entities who are current owners of units and/or are limited partners in one
     or more of the partnerships referenced above (as defined in this Section 5,
     the "Partnerships").  Plaintiff alleges that McNeil Partners,  L.P., McNeil
     Investors,  Inc., Robert A. McNeil and other senior officers (as defined in
     this  Section  5,  collectively,  the  "Defendants")  have  breached  their
     fiduciary  duties to the class members by, among other  things,  (1) taking
     steps to prevent the  consummation  of the High River  tender  offers,  (2)
     failing to take steps to maximize unitholders' or limited partners' values,
     including  failure to liquidate the properties  owned by the  Partnerships,
     (3) managing the Partnerships so as to extend  indefinitely the present fee
     arrangements,  and (4) paying itself and entities  owned and  controlled by
     the  general  partner  excessive  fees and  reimbursements  of general  and
     administrative expenses.

     The Defendants deny that there is any merit to Plaintiff's  allegations and
     intend to vigorously defend this action.

NOTE 8 - PRO FORMA DISCLOSURE (UNAUDITED)
-----------------------------------------

The following pro forma  information  for the years ended  December 31, 1994 and
1993  reflects the results of operations  of the  Partnership  as if the sale of
Pacesetter  Apartments  had  occurred  as of  January  1,  1993.  The pro  forma
information  is not  necessarily  indicative of the results of  operations  that
actually  would have  occurred  or those which might be expected to occur in the
future.

<TABLE>
<CAPTION>
                                                                            For the Years Ended December 31,
                                                                         -------------------------------------
                                                                               1994                  1993
                                                                         ----------------       --------------
<S>                                                                      <C>                    <C>          
       Total revenues.....................................               $     1,287,125        $   1,209,697
       Net loss...........................................                       (77,885)          (1,027,901)
       Net loss per limited partnership unit..............                         (5.66)              (74.51)
</TABLE>


<PAGE>


                       McNEIL PACIFIC INVESTORS FUND 1972
                                  SCHEDULE III
              REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
                                December 31, 1995


<TABLE>
<CAPTION>
                                                                                   Cumulative           Costs
                                                      Initial Cost (b)             Write-down        Capitalized
                           Related (b)                         Buildings and     and Permanent        Subsequent
Description                Encumbrances           Land          Improvements       Impairment       To Acquisition
-----------                ------------           ----         -------------     -------------      --------------     

Apartments:
<S>                        <C>               <C>               <C>                <C>              <C>          
Palm Bay Apartments
   Orlando, FL             $    2,161,204    $    2,336,000    $    4,214,000     $   (800,000)    $   1,596,483
                            =============     =============     =============      ===========      ============
</TABLE>



(b)  The initial cost and encumbrances  reflect the present value of future loan
     payments  discounted,  if  appropriate,  at a  rate  estimated  to  be  the
     prevailing interest rate at the date of acquisition or refinancing.


































                     See accompanying notes to Schedule III.


<PAGE>


                       McNEIL PACIFIC INVESTORS FUND 1972
                                  SCHEDULE III
              REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
                                December 31, 1995

<TABLE>
<CAPTION>
                                            Gross Amount at
                                     Which Carried at Close of Period                 Accumulated
                                                 Buildings and                        Depreciation
Description                         Land          Improvements        Total (a)      and Amortization
-----------                         ----         -------------        ---------      ----------------

Apartments:
<S>                           <C>                <C>              <C>                 <C>            
Palm Bay Apartments
   Orlando, FL                $    2,336,000     $    5,010,483   $      7,346,483    $   (1,010,990)
                               =============      =============    ===============     =============
</TABLE>



(a)  For Federal income tax purposes,  the properties are depreciated over lives
     ranging from 15-25 years using ACRS or MACRS methods. The aggregate cost of
     real estate  investments for Federal income tax purposes was  approximately
     $10,653,153   and   accumulated  depreciation   was  $940,317  December 31,
     1995.



























                     See accompanying notes to Schedule III.


<PAGE>


                       McNEIL PACIFIC INVESTORS FUND 1972
                                  SCHEDULE III
              REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
                                December 31, 1995


<TABLE>
<CAPTION>

                                 Date of                    Date                Depreciable
Description                   Construction                Acquired              lives (years)
-----------                   ------------                --------              -------------
Apartments:

<S>                             <C>                         <C>                     <C> 
Palm Bay Apartments
   Orlando, FL                  1974                        06/91                   2-25

</TABLE>
































                                      See accompanying notes to Schedule III.




<PAGE>


                       McNEIL PACIFIC INVESTORS FUND 1972

                              NOTES TO SCHEDULE III

               REAL ESTATE INVESTMENT AND ACCUMULATED DEPRECIATION


A  summary  of  activity  for the  Partnership's  real  estate  investments  and
accumulated depreciation for the years ended December 31, 1995, 1994 and 1993 is
as follows:

<TABLE>
<CAPTION>

                                                              For the Years Ended December 31,
                                                   ----------------------------------------------------
                                                        1995               1994               1993
                                                   --------------     --------------    ---------------
Real estate investments:

<S>                                                <C>                <C>               <C>            
Balance at beginning of year...............        $    6,905,577     $    6,257,807    $    11,952,287

Write-down for permanent
   impairment of real estate...............                     -                  -         (2,700,000)

Improvements...............................               440,906            647,770            466,547

Reclassification to asset held
   for sale................................                     -                  -         (3,461,027)
                                                    -------------      -------------     --------------

Balance at end of year.....................        $    7,346,483     $     6,905,577   $     6,257,807
                                                    =============      ==============    ==============


Accumulated depreciation:

Balance at beginning of year...............        $      666,496     $       443,333   $       423,615

Depreciation...............................               344,494             223,163*          271,476

Reclassification to asset held
   for sale................................                     -                   -          (251,758)
                                                    -------------      --------------    --------------

Balance at end of year.....................        $    1,010,990     $       666,496    $        443,333
                                                    =============      ==============     ===============

</TABLE>

*    Amount excludes  depreciation on Pacesetter Apartments which was classified
     as an asset held for sale throughout the year.



<PAGE>


ITEM 9.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
-------      -----------------------------------------------------------
             AND FINANCIAL DISCLOSURE
             ------------------------

None.

                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Neither the  Partnership  nor the General Partner has any directors or executive
officers.  The names and ages of, as well as the positions held by, the officers
and  directors of McNeil  Investors,  Inc.,  the general  partner of the General
Partner, are as follows:

<TABLE>
<CAPTION>

                                       Other Principal Occupations and Other
Name and Position             Age      Directorships During the Past 5 Years
-----------------             ---      -------------------------------------
<S>                            <C>      <C>
Robert A. McNeil,              75       Mr.  McNeil  is also  Chairman  of the Board and  Director  of McNeil  Real
Chairman of the                         Estate  Management,  Inc.  ("McREMI")  which is an affiliate of the General
Board and Director                      Partner.  He has held the foregoing  positions  since the formation of such
                                        entity  in  1990.  Mr.  McNeil  received  his  B.A.  degree  from  Stanford
                                        University  in 1942 and his  L.L.B.  degree  from  Stanford  Law  School in
                                        1948. He is a member of the State Bar of  California  and has been involved
                                        in  real  estate  financing  since  the  late  1940's  and in  real  estate
                                        acquisitions,  syndications  and  dispositions  since 1960. From 1986 until
                                        active  operations of McREMI and McNeil  Partners,  L.P.  began in February
                                        1991,  Mr.  McNeil was a private  investor.  Mr.  McNeil is a member of the
                                        International  Board of Directors  of the Salk  Institute,  which  promotes
                                        research in improvements in health care.

Carole J. McNeil               52       Mrs.  McNeil is  Co-Chairman,  with  husband  Robert A.  McNeil,  of McNeil
Co-Chairman of the                      Investors,  Inc.  Mrs.  McNeil has twenty years of real estate  experience,
Board                                   most  recently  as a  private  investor  from  1986 to 1993.  In 1982,  she
                                        founded Ivory & Associates, a commercialreal  estate   brokerage   firm  in  
                                        San Francisco,  CA. Prior to that, she was a   commercial    real    estate
                                        associate  with the  Madison  Company  and,    earlier, a commercial  sales  
                                        associate and analyst with   Marcus  and  Millichap   in     San Francisco.
                                        In   1978,    Mrs.      McNeil   established   Escrow   Training   Centers,
                                        California's   first   accredited commercial training   program  for  title   
                                        company escrow  officers and real     estate     agents    needing  college  
                                        credits to qualify for brokerage  licenses.  She  began   in    real estate 
                                        as Manager and Marketing Director  of   Title    Insurance     and    Trust 
                                        in Marin County,  CA. Mrs.   McNeil    serves    on    the    International  
                                        Board of Directors of the Salk Institute.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                       Other Principal Occupations and Other
Name and Position             Age      Directorships During the Past 5 Years
-----------------             ---      -------------------------------------
<S>                            <C>                                                                                 
Donald K. Reed,                50       Mr. Reed is  President,  Chief  Executive  Officer  and  Director of McREMI
Director, President,                    which is an affiliate of the General  Partner.  Prior to joining  McREMI in
and Chief Executive                     March 1993, Mr. Reed was President,  Chief  Operating  Officer and Director
Officer                                 of Duddlesten Management Corporation and Duddlesten Realty Advisors,  Inc.,
                                        with  responsibility  for  a  management portfolio   of    office,  retail,
                                        multi-family and mixed-use land projects representing  $2 billion in  asset
                                        value. He was  also  Chief  Operating  Officer, Director  and   member   of 
                                        the  Executive Committee of all Duddlesten  affiliates.  Mr.  Reed  started
                                        with the  Duddlesten companies  in 1976 and served as Senior Vice President
                                        and  Chief   Financial Officer and as Executive  Vice President and   Chief
                                        Operating    Officer   of Duddlesten Management   Corporation   before  his
                                        promotion to President in 1982.  He was   President   and  Chief  Operating
                                        Officer of Duddlesten  Realty  Advisors, Inc.,  which  has been  engaged in
                                        real estate   acquisitions,   marketing   and   dispositions,  since    its
                                        formation  in 1989.

Ron K. Taylor                  38       Mr.  Taylor  is a Senior  Vice  President  of  McREMI  and has been in this
                                        capacity since McREMI commenced  active  operations in 1991. He also serves
                                        as Acting  Chief  Financial  Officer  of McREMI  since the  resignation  of
                                        Robert C. Irvine on January 31, 1996.  Mr. Taylor is primarily  responsible
                                        for Asset Management functions at McREMI,  including property dispositions,
                                        commercial  leasing,  real estate finance and portfolio  management.  Prior
                                        to joining  McREMI,  Mr. Taylor served as an Executive Vice President for a
                                        national  syndication/property  management  company.  Mr.  Taylor  has been
                                        involved in the real estate industry since 1983.
</TABLE>


Each director  shall serve until his successor  shall have been duly elected and
qualified.

ITEM 11.     EXECUTIVE COMPENSATION
--------     ----------------------

No direct  compensation  was paid or payable by the  Partnership to directors or
officers  (since it does not have any  directors or officers) for the year ended
December  31,  1995,  nor was any  direct  compensation  paid or  payable by the
Partnership  to  directors  or officers  of the  general  partner of the General
Partner for the year ended  December 31, 1995. The  Partnership  has no plans to
pay any such remuneration to any directors or officers of the general partner of
the General Partner in the future.

See Item 13 - Certain  Relationships  and  Related  Transactions  for amounts of
compensation and  reimbursements  paid by the Partnership to the General Partner
and its affiliates.



<PAGE>


ITEM 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------     --------------------------------------------------------------

(A)      Security ownership of certain beneficial owners.

         No  individual  or  group,  as  defined  by  Section  13(d)(3)  of  the
         Securities  Exchange  Act of  1934,  known  to the  Partnership  is the
         beneficial owner of more than 5% of the  Partnership's  securities with
         the exception of the following:

         1.     The General  Conference  Corporation of Seventh Day  Adventists,
                12501 Old Columbia Pike,  Silver Spring,  Maryland,  20904, owns
                950 (6.9%) of the Partnership's Units as of February 29, 1996.

         2.     A group of ten limited  partnerships  affiliated  with Liquidity
                Financial  Corporation,  all of whose outstanding stock is owned
                by  Richard  G.  Wollack  and Brent R.  Donaldson,  2200  Powell
                Street, Suite 700, Emeryville,  California,  94608, collectively
                own 840 (6.1%) of the  Partnership's  Units as of  February  29,
                1996.

(B)      Security ownership of management.

         The  General  Partner and the  officers  and  directors  of its general
         partner  collectively  own 50  Units,  which  is less  than 1% of Units
         outstanding.

(C)      Change in control.

         None.

ITEM 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------     ----------------------------------------------

The General Partner is entitled to receive a partnership management fee equal to
9.5% of  distributions  of cash from  operations  when  distributable  cash from
operations is distributed  to the limited  partners.  No partnership  management
fees were incurred for the year ended December 31, 1995.

The  Partnership  pays  property  management  fees  equal to 6% of gross  rental
receipts  of  the  Partnership's  property  to  McREMI  for  providing  property
management and leasing services for the Partnership's  property. The Partnership
reimburses  McREMI for its  costs,  including  overhead,  of  administering  the
Partnership's  affairs.  For the year ended December 31, 1995,  the  Partnership
paid or accrued $160,071 in property management fees and reimbursements.

The General  Partner is entitled to receive a sales  commission as  compensation
for selling Partnership property equal to the lesser of 4% of the sales price of
the property  sold or the customary  fee charged by  independent  brokers in the
area where the property is located. During 1995, the Partnership paid an $81,000
commission to the General Partner in connection with the 1994 sale of Pacesetter
Apartments.

The General  Partner has  established a revolving  credit facility not to exceed
$5,000,000 in the aggregate  which is available on a "first-come,  first-served"
basis to the  Partnership  and other  partnerships  affiliated  with the General
Partner if certain conditions are met. Borrowings under the facility may be used
to fund deferred maintenance, refinancing obligations and working capital needs.
The  Partnership  had $50,000 of  outstanding  borrowings  under the facility at
December  31, 1993.  The $50,000 was repaid  during  1994.  Borrowings  from the
facility are unsecured,  due on demand and accrue  interest at the prime lending
rate of Bank of America plus 1%. As of December 31,  1995,  $2,662,819  remained
available for  borrowing  under the facility;  however,  additional  funds could
become available as other  partnerships  repay borrowings.  This commitment will
terminate on March 30, 1997.

See  Item 1 -  Business,  Item  7 -  Management's  Discussion  and  Analysis  of
Financial  Condition  and  Results  of  Operations,  and  Item  8  -  Note  2  -
"Transactions with Affiliates."


<PAGE>
                                     PART IV

ITEM 14.     EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
--------     -----------------------------------------------------------------

See accompanying Index to Financial Statements at Item 8.

<TABLE>
<CAPTION>
(A)           Exhibits
              --------

              The following  exhibits are  incorporated  by reference and are an
              integral part of this Form 10-K.

              Exhibit
              Number                  Description
              -------                 -----------

              <S>                     <C>                                                           
              3.1                     Restated  Certificate  and  Agreement   of
                                      Limited  Partnership dated   as   of March
                                      8, 1972.  (1)

              3.2                     Amendment  to  Restated   Certificate  and
                                      Agreement     of   Limited     Partnership
                                      dated as of March 30, 1992.  (3)

              10.1                    Mortgage     Note,  dated   March 9, 1975,
                                      between  McNeil Pacific    Investors  Fund
                                      1972 and John Hancock    Life    Insurance 
                                      Company.  (2)

              10.2                    Property  Management  Agreement,  dated as
                                      of   October     1, 1993, between   McNeil
                                      Pacific Investors     Fund 1972 and McNeil 
                                      Real Estate Management, Inc.  (3)

              10.3                    Revolving    Credit      Agreement,  dated 
                                      August 6,  1991  between McNeil  Partners,
                                      L.P. and McNeil   Pacific   Investors Fund 
                                      1972.  (3)

              10.4                    Amendment    of    Property     Management
                                      Agreement,  dated January 1, 1995, between
                                      McNeil  Pacific  Investors  Fund  1972 and
                                      McNeil Real Estate Management, Inc. (4)

              10.5                    Modification  Agreement,  dated  effective
                                      June 1, 1992, between M R   Partners, Inc.
                                      and John Hancock  Mutual    Life Insurance
                                      Company (4)
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
              Exhibit
              Number                  Description
              -------                 -----------

              <S>                     <C>                                                               
              11.                     Statement   regarding   computation of Net
                                      Income per  Limited  Partnership Unit (see
                                      Note 1 to Financial Statements).

                           (1)        Incorporated  by  reference  to the Annual
                                      Report of McNeil  Pacific  Investors  Fund
                                      1972 on Form  10-K  for the  period  ended
                                      December  31,  1990,  as  filed  with  the
                                      Securities  and  Exchange   Commission  on
                                      March 29, 1991.

                           (2)        Incorporated  by  reference  to the Annual
                                      Report of McNeil  Pacific  Investors  Fund
                                      1972 (Commission  file number 0-7162),  on
                                      Form 10-K for the  period  ended  December
                                      31, 1991, as filed with the Securities and
                                      Exchange Commission on March 30, 1992.

                           (3)        Incorporated  by  reference  to the Annual
                                      Report of McNeil  Pacific  Investors  Fund
                                      1972 (Commission  file number 0-7162),  on
                                      Form 10-K for the  period  ended  December
                                      31, 1993, as filed with the Securities and
                                      Exchange Commission on March 30, 1994.

                           (4)        Incorporated  by  reference  to the Annual
                                      Report of McNeil  Pacific  Investors  Fund
                                      1972 (Commission  file number 0-7162),  on
                                      Form 10-K for the  period  ended  December
                                      31, 1994, as filed with the Securities and
                                      Exchange Commission on March 30, 1995.

              27.                     Financial Data Schedule for the year ended
                                      December 31, 1995.
</TABLE>

(B)  Reports on Form 8-K.  There  were no  reports on Form 8-K filed  during the
quarter ended December 31, 1995.


<PAGE>



                       McNEIL PACIFIC INVESTORS FUND 1972
                              A Limited Partnership

                                 SIGNATURE PAGE


Pursuant to the  requirements of Section 13 or 15(d) 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.

<TABLE>
<CAPTION>

                                                   McNEIL PACIFIC INVESTORS FUND 1972


                                                   By:  McNeil Partners, L.P., General Partner

                                                        By: McNeil Investors, Inc., General Partner



<S>                                                <C>          
March 29, 1996                                     By:  /s/  Robert A. McNeil
--------------                                        -------------------------------------------------
Date                                                    Robert A. McNeil
                                                        Chairman of the Board and Director
                                                        (Principal Executive Officer)


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.



March 29, 1996                                     By:  /s/  Donald K. Reed
--------------                                         -------------------------------------------------
Date                                                    Donald K. Reed
                                                        President and Director of McNeil Investors, Inc.




March 29, 1996                                     By:  /s/  Ron K. Taylor
--------------                                         -------------------------------------------------
Date                                                    Ron K. Taylor
                                                        Acting Chief Financial Officer
                                                            of McNeil Investors, Inc.


March 29, 1996                                     By:  /s/  Brandon K. Flaming
--------------                                         -------------------------------------------------
Date                                                    Brandon K. Flaming
                                                        Chief Accounting Officer of McNeil Real Estate
                                                           Management, Inc.


</TABLE>