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

                                  FORM 10-Q

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

                  For the Quarterly Period Ended June 30, 2000

                         Commission File Number 0-17383

                        ML-LEE ACQUISITION FUND II, L.P.
      (Exact name of registrant as specified in its Governing Instruments)

           Delaware                                 04-3028398
(State or other jurisdiction            (IRS Employer Identification No.)
of incorporation or organization)

                      2 World Financial Center - 14th Floor
                          New York, New York 10281-6114
              (Address of principal executive offices and zip code)

Registrant's telephone number, including area code:  (212) 236-6576

Securities registered pursuant to Section 12(b) of the Act:

        Title of each Class        Name of each exchange on which registered
               None                               Not Applicable

Securities registered pursuant to Section 12(g) of the Act:

                        Units of Limited Partnership Interest
                                (Title of class)

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 (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No ___.

<PAGE>
                        ML-LEE ACQUISITION FUND II, L.P.

                                TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

Statements of Assets,  Liabilities and Partners' Capital
    As of June 30, 2000 (Unaudited) and December 31, 1999 (Unaudited)

Statements of Operations
    For the Three and Six Months Ended June 30, 2000 and 1999 (Unaudited)

Statements of Changes in Net Assets
    For the Six Months Ended June 30, 2000 and 1999 (Unaudited)

Statements of Cash Flows
    For the Six Months Ended June 30, 2000 and 1999 (Unaudited)

Statements of Changes in  Partners'  Capital
    For the Six Months Ended June 30, 2000 (Unaudited)

Schedule of Portfolio Investments
    As of June 30, 2000 (Unaudited)

Notes to Financial Statements (Unaudited)

Supplemental Schedule of Realized Loss
    - Schedule 1 (Unaudited)

Supplemental Schedule of Unrealized Depreciation
    - Schedule 2 (Unaudited)


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


Item 3.   Quantative and Qualitative Disclosure About Market Risk



PART II - OTHER INFORMATION

Item 6.   Exibits and Reports on Form 8-K

<PAGE>
<TABLE>
<CAPTION>
                                        ML-LEE ACQUISITION FUND II, L.P.
                             STATEMENTS OF ASSETS, LIABILTIES AND PARTNERS' CAPITAL
                                              (DOLLARS IN THOUSANDS)
                                                   (UNAUDITED)


                                                                        June 30, 2000       December 31, 1999
                                                                        -------------       -----------------
<S>                                                                     <C>                 <C>
Assets:

Investments - Notes 3 and 4
  Portfolio Investments at fair value
    Managed Companies (amortized cost $14,537
      as of June 30, 2000 and $17,144 as of December 31, 1999)            $  14,537             $   17,144
    Non-Managed Companies (amortized cost $2,197
      as of June 30, 2000 and $2,297 as of December 31, 1999)                   348                    406
    Temporary Investments, at amortized cost (cost $18,865
      as of June 30, 2000 and $15,255 as of December 31, 1999)               19,000                 15,280
Cash                                                                              9                     36
Accrued Interest & Other Receivable                                             239                    163
Prepaid Expenses                                                                  2                      6
                                                                          ---------              ---------
Total Assets                                                              $  34,135              $  33,035
                                                                          =========              =========

Liabilities and Partners' Capital:

Liabilities
    Reimbursable Administrative Expenses Payable - Note 5                 $     113              $     105
    Independent General Partners' Fees Payable - Note 5                           2                      6
    Legal and Professional Fees Payable                                          18                      5
    Deferred Interest Income                                                     21                     44
                                                                          ---------              ---------
Total Liabilities                                                               154                    160
                                                                          ---------              ---------

Partners' Capital
    Individual General Partner                                                   13                     13
    Managing General Partner                                                    530                    322
    Limited Partners (221,745 Units)                                         33,438                 32,540
                                                                          ---------              ---------
Total Partners' Capital                                                      33,981                 32,875
                                                                          ---------              ---------
Total Liabilities and Partners' Capital                                   $  34,135              $  33,035
                                                                          =========              =========

See the Accompanying Notes to Financial Statements (Unaudited).
</TABLE>
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<TABLE>
<CAPTION>
                                              ML-LEE ACQUISITION FUND II, L.P.
                                                 STATEMENTS OF OPERATIONS
                                                  (DOLLARS IN THOUSANDS)
                                                       (UNAUDITED)

                                                                  For the Three Months       For the Six Months
                                                                     Ended June 30,            Ended June 30,
                                                                  --------------------     ----------------------
                                                                     2000       1999          2000        1999
                                                                   --------   --------     ---------    ---------
<S>                                                                <C>        <C>          <C>          <C>
Investment Income:
  Interest                                                         $    485   $    575     $   1,265    $   1,144
  Discount and Other Income                                             257         72           403          130
                                                                   --------   --------     ---------    ---------
    Total Investment Income                                             742        647         1,668        1,274
                                                                   --------   --------     ---------    ---------
Expenses:
  Investment Advisory Fee - Note 5                                      167        167           333          333
  Fund Administration Fee - Note 5                                       55         55           111          111
  Reimbursable Administrative Expenses - Note 5                          43         50           103          125
  Independent General Partners' Fees and Expenses                        19         17            40           41
  Legal and Professional Fees                                             -          -            11            -
  Insurance Expense                                                       2          1             4            2
                                                                   --------   --------     ---------    ---------
    Total Expenses                                                      286        290           602          612
                                                                   --------   --------     ---------    ---------
Net Investment Income                                                   456        357         1,066          662

Realized Loss on Sales of Investments - Note 3 and Schedule 1            (7)         -            (7)      (1,026)

Net Change in Unrealized Depreciation on
  Investments - Schedule 2
  Nonpublic Securities                                                   47          -            47        4,041
                                                                   --------   --------     ---------    ---------
Net Increase in Net Assets Resulting from Operations                    496        357         1,106        3,677

Less:  Earned MGP Distributions to Managing General Partner             (98)       (86)         (205)        (184)
                                                                   --------   --------     ---------    ---------
Net Increase Available for Pro-Rata Distribution to All Partners   $    398   $    271     $     901    $   3,493
                                                                   ========   ========     =========    =========


See the Accompanying Notes to Financial Statements (Unaudited).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                       ML-LEE ACQUISITION FUND II, L.P.
                                     STATEMENTS OF CHANGES IN NET ASSETS
                                            (DOLLARS IN THOUSANDS)
                                                 (UNAUDITED)




                                                                     For the Six Months Ended June 30,
                                                                     ---------------------------------
                                                                         2000                  1999
                                                                      ---------             ---------
<S>                                                                   <C>                   <C>
From Operations:
  Net Investment Income                                               $   1,066             $     662
  Realized Loss on Sales of Investments                                      (7)               (1,026)
  Net Change in Unrealized Depreciation on Investments                       47                 4,041
                                                                      ---------             ---------

  Net Increase in Net Assets Resulting from Operations                    1,106                 3,677
  Cash Distributions to Partners                                              -                (8,047)
                                                                      ---------             ---------

  Total Increase (Decrease)                                               1,106                (4,370)
Net Assets:
  Beginning of Year                                                      32,875                31,026
                                                                      ---------             ---------

  End of Period                                                       $  33,981             $  26,656
                                                                      =========             =========


See the Accompanying Notes to Financial Statements (Unaudited).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                      ML-LEE ACQUISITION FUND II, L.P.
                                         STATEMENTS OF CASH FLOWS
                                          (DOLLARS IN THOUSANDS)
                                               (UNAUDITED)




                                                                      For the Six Months Ended June 30,
                                                                      ---------------------------------
                                                                           2000              1999
                                                                        ---------         ---------
<S>                                                                     <C>               <C>
Increase (Decrease) in Cash

Cash Flows From Operating Activities:
  Interest, Discount and Other Income                                   $   1,459         $   2,296
  Investment Advisory Fee                                                    (333)             (333)
  Fund Administration Fee                                                    (111)             (111)
  Reimbursable Administrative Expenses                                        (95)              (96)
  Independent General Partners' Fees and Expenses                             (44)              (59)
  Legal and Professional Fees                                                 (16)              (13)
  Purchase of Temporary Investments, Net                                   (3,610)                7
  Proceeds from Sales of Portfolio Company Investments                      2,723             6,387
                                                                        ---------         ---------
Net Cash Provided by (Used in) Operating Activities                           (27)            8,078
                                                                        ---------         ---------
Cash Flows from Financing Activities:
  Cash Distributions to Partners                                                -            (8,047)
                                                                        ---------         ---------
Net Cash Used in Financing Activities                                           -            (8,047)
                                                                        ---------         ---------
  Net Increase (Decrease) in Cash                                             (27)               31
  Cash at Beginning of Year                                                    36                 5
                                                                        ---------         ---------
Cash at End of Period                                                   $       9         $      36
                                                                        =========         =========


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

Net Investment Income                                                   $   1,066         $     662
                                                                        ---------         ---------
Adjustments to Reconcile Net Investment Income
  to Net Cash Provided by (Used in) Operating Activities:
 (Increase) Decrease in Investments at Cost                                  (898)            6,638
  Decrease in Receivable for Investments Sold                                   -               782
 (Increase) Decrease in Accrued Interest and Discount Receivable             (209)            1,022
  Decrease in Prepaid Expenses                                                  4                 2
  Increase in Reimbursable Administrative Expenses Payable                      8                29
  Decrease in Independent General Partners' Fees Payable                       (4)              (18)
  Increase (Decrease) in Legal and Professional Fees Payable                   13               (13)
  Realized Loss on Sales of Investments                                        (7)           (1,026)
                                                                        ---------         ---------
Total Adjustments                                                          (1,093)            7,416
                                                                        ---------         ---------
Net Cash Provided by (Used in) Operating Activities                     $     (27)        $   8,078
                                                                        =========         =========

See the Accompanying Notes to Financial Statements (Unaudited).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                     ML-LEE ACQUISITION FUND II, L.P.
                                                 STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                                                           (DOLLARS IN THOUSANDS)
                                                                 (UNAUDITED)




                                                                        Individual    Managing
                                                                          General      General      Limited
                                                                          Partner      Partner      Partners      Total
                                                                       ------------  ----------    -----------   ---------
<S>                                                                    <C>           <C>           <C>           <C>
For the Six Months Ended June 30, 2000
  Partners' Capital as of January 1, 2000                              $         13  $      322    $    32,540   $  32,875
  Allocation of Net Investment Income                                             -         208            858       1,066
  Allocation of Realized Loss on Sale of Investment                               -           -             (7)         (7)
  Allocation of Net Change in Unrealized Depreciation
   on Investments                                                                 -           -             47          47
                                                                       ------------  ----------    -----------   ---------
Partners' Capital as of June 30, 2000                                  $         13  $      530    $    33,438   $  33,981
                                                                       ============  ==========    ===========   =========

See the Accompanying Notes to Financial Statements (Unaudited).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                 ML-LEE ACQUISITION FUND II, L.P.
                                                SCHEDULE OF PORTFOLIO INVESTMENTS
                                                          JUNE 30, 2000
                                                      (DOLLARS IN THOUSANDS)
                                                           (UNAUDITED)


                                                                                                                          % of
   Principal                                                                        Investment  Investment     Fair       Total
 Amount/Shares     Investment                                                          Date       Cost(f)      Value   Investments
 -------------     ----------                                                       ----------  ----------   --------  -----------
<S>               <C>                                                               <C>         <C>          <C>       <C>
                   MEZZANINE INVESTMENTS
                   MANAGED COMPANIES


                   BIG V SUPERMARKETS, INC. (a) - Note 3
$10,430            Big V Supermarkets, Inc., Sr. Sub. Nt. 14.14% due 03/15/01(b)(g)    12/27/90   $ 10,430   $ 10,430
117,333 Shares     Big V Holding Corp., Common Stock (c)                               12/27/90      4,107      4,107
                   (16.6% of fully diluted common equity) (e)                                     --------------------------------
                                                                                                    14,537     14,537       42.90%
                                                                                                  --------------------------------
                   COLE NATIONAL CORPORATION
13,161 Warrants    Cole National Corporation, Common Stock Purchase Warrants (c)        9/26/90          -          -
                     (0.0% of fully diluted common equity
                        assuming exercise of warrants)
                        $1,393 13% Sr. Secured Bridge Note
                        Purchased 9/25/90           $1,393
                        Repaid 11/15/90             $1,393                                        -------------------------------
                        Realized Gain               $    0                                               -          -        0.00%
                                                                                                  -------------------------------

                   TOTAL INVESTMENT IN MANAGED COMPANIES                                          $ 14,537   $ 14,537       42.90%
                                                                                                  ===============================


                   NON-MANAGED COMPANIES

                   BIOLEASE, INC. - Note 3 and Schedule 2
$668               BioLease, Inc., 13% Sub. Nt. due 06/06/04 (b)                        06/08/94  $    576   $    334
96.56 Shares       BioLease, Inc., Common Stock (c)                                     06/08/94        94          -
10,014 Warrants    Biotransplant, Inc., Common Stock Purchase Warrants(c)               06/08/94        14         14
                                                                                                  -------------------------------
                                                                                                       684        348      1.03%
                                                                                                  -------------------------------

                   FLA. ORTHOPEDICS, INC. - Schedule 2
 19,366 Shares     FLA. Holdings, Inc. Series B Preferred Stock (a) (c) (d)             08/02/93     1,513          -
  3,822 Warrants   FLA. Holdings, Inc. Common Stock Purchase Warrants (a) (c) (d)       08/02/93         -          -
                   $4,842 12.5% Subordinated Note
                   Purchased 08/02/93                     $ 4,842
                   Surrendered 08/16/96                   $     0
                   Realized Loss                          $(4,842)
                   121,040 Common Stock
                   Purchased 08/02/93                     $ 1,513
                   Exchanged 08/02/96
                   19,366 Series B Preferred Stock        $ 1,513
                   Realized Gain                          $     0
                   Total Realized Loss                    $(4,842)
                                                                                                  -------------------------------
                                                                                                     1,513           -       0.00%
                                                                                                  -------------------------------
                    TOTAL INVESTMENT IN NON-MANAGED COMPANIES                                     $  2,197    $    348       1.03%
                                                                                                  ===============================


See the Accompanying Notes to Financial Statements (Unaudited).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                           ML-LEE ACQUISITION FUND II, L.P.
                                   SCHEDULE OF PORTFOLIO INVESTMENTS (continued)
                                                  JUNE 30, 2000
                                              (DOLLARS IN THOUSANDS)
                                                    (UNAUDITED)


                                                                                                                       % of
 Principal                                                                         Investment  Investment    Fair      Total
Amount/Shares     Investment                                                          Date       Cost(f)     Value  Investments
-------------     ----------                                                       ----------  ----------  -------- -----------
<S>               <C>                                                              <C>         <C>         <C>       <C>
                  SUMMARY OF MEZZANINE INVESTMENTS

                  Subordinated Notes                                                 Various   $ 11,006    $ 10,764    31.77%
                  Preferred Stock, Common Stock, Warrants and Stock Rights           Various      5,728       4,121    12.16%
                                                                                               ------------------------------
                  TOTAL MEZZANINE INVESTMENTS                                                  $ 16,734    $ 14,885    43.93%
                                                                                               ==============================

                  TEMPORARY INVESTMENTS

                  COMMERCIAL PAPER
$10,000           Ford Motor Credit Corp., 6.48% due 7/3/00                          5/17/00   $  9,915    $  9,994
$ 6,100           Prudential Funding, 6.46% due 7/3/00                               5/17/00      6,049       6,097
$ 2,660           American General Finance, 6.40% due 7/3/00                         6/19/00      2,653       2,659
$   250           American General Finance, 6.45% due 7/3/00                         5/17/00        248         250
                                                                                               -----------------------------
                  TOTAL INVESTMENT IN COMMERCIAL PAPER                                         $ 18,865    $ 19,000    56.07%
                                                                                               -----------------------------
                  TOTAL TEMPORARY INVESTMENTS                                                  $ 18,865    $ 19,000    56.07%
                                                                                               -----------------------------
                  TOTAL INVESTMENT PORTFOLIO                                                   $ 35,599    $ 33,885   100.00%
                                                                                               =============================


(a)  Represents investment in affiliates as defined in the Investment Company Act of 1940.
(b)  Restricted security.
(c)  Restricted non-income producing equity security.
(d)  Non-accrual investment status.
(e)  Percentages of Common Equity are not audited by PricewaterhouseCoopers LLP.
(f)  Represents original cost and excludes accretion of discount of $28 for
     Mezzanine Investments and $135 for Temporary Investments.
(g)  $3,911,000 is scheduled to mature on December 15, 2000, with the remaining $6,519,000
     scheduled to mature on March 1, 2001.

See the Accompanying Notes to Financial Statements (Unaudited).
</TABLE>
<PAGE>
                         ML-LEE ACQUISITION FUND II, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                                 JUNE 30, 2000
                                  (UNAUDITED)

1.   Organization

     ML-Lee  Acquisition  Fund II, L.P. ("Fund II") was formed along with ML-Lee
Acquisition  Fund  (Retirement   Accounts)  II,  L.P.  (the  "Retirement  Fund";
collectively  referred  to as the  "Funds")  and  the  Certificates  of  Limited
Partnership  were filed under the Delaware  Revised Uniform Limited  Partnership
Act on September 23, 1988. The Funds' operations commenced on November 10, 1989.
Capital  contributions  from the Limited  Partners and the General  Partners (as
defined below) totaled $222,295,000 in the public offering of Fund II, the final
closing for which was held on January 5, 1990.

     Mezzanine Investments II, L.P. (the "Managing General Partner"), subject to
the  supervision  of the  Individual  General  Partners  (as  defined  below and
hereinafter  with the Managing  General Partner as the "General  Partners"),  is
responsible for overseeing and monitoring of Fund II's investments. The Managing
General Partner is a Delaware limited  partnership in which ML Mezzanine II Inc.
is the general  partner and Thomas H. Lee  Advisors  II,  L.P.,  the  Investment
Adviser to the Funds, is the limited  partner.  The Individual  General Partners
are Vernon R. Alden,  Joseph L. Bower and Stanley H. Feldberg (the  "Independent
General  Partners")  and Thomas H. Lee. ML Fund  Administrators  Inc. (the "Fund
Administrator") is an indirect  wholly-owned  subsidiary of Merrill Lynch & Co.,
Inc. and is responsible for the day to day administrative services necessary for
the operations of Fund II.

2.   Basis of Accounting

     For financial  reporting  purposes,  the records of Fund II are  maintained
using the accrual method of accounting.  The preparation of financial statements
in accordance with generally accepted accounting  principles requires management
to make estimates and assumptions that affect the amounts and disclosures in the
financial statements. Actual reported results could vary from these estimates.

     The financial  statements reflect all adjustments which are, in the opinion
of management,  necessary for a fair  presentation  of the financial  condition,
results of operations and cash flows for the periods presented. Such adjustments
consisted of those of a normal  recurring  nature,  as well as an  adjustment of
$205,000 to correct for a 1999  understatement of Mezzanine  Investment  income.
The results of  operations  for the three and six months ended June 30, 2000 are
not  necessarily  indicative  of the results that may be achieved for the entire
year.  Footnote   disclosure  which  substantially   duplicates  the  disclosure
contained  in Fund II's Annual  Report on Form 10-K for the year ended  December
31, 1999, which is hereby incorporated by reference, has been omitted.

3.   Investment Transactions

     On  April  28,  2000,  BioLease,   Inc.  ("BioLease")  refinanced  existing
construction  and term loans and utilized a portion of the refinancing  proceeds
to  make a  $116,000  partial  paydown  to  Fund  II of  BioLease's  13%  Senior
Subordinated  Note.  Fund II  realized a loss from this  transaction  of $7,000,
after the payment of $18,000 in  transaction  costs and the write-off of $11,000
of unamortized note discount.

     On June  15,  2000,  $2,607,000  (20%)  of  Fund  II's  $13,037,000  senior
subordinated  Note from Big V  Supermarkets,  Inc.  ("Big V")  matured.  Fund II
recorded no gain or loss from this transaction.  An additional  $3,911,000 (30%)
is scheduled to mature on December 15, 2000, with the remaining $6,519,000 (50%)
scheduled to mature on March 1, 2001.

     As  previously  reported,  Fund II had expected to make a  distribution  of
Distributable  Capital Proceeds relating to the August 27, 1999 sale of Fitz and
Floyd,  Inc.  However,  on  November 9, 1999,  a special  meeting of the General
Partners of Fund II was held to review Fund II's reserves,  prior to considering
making any cash  distributions.  At this  meeting,  the  General  Partners  were
briefed on the status of certain  litigation  commenced by Hills Stores  Company
("Hills")  against its former  directors,  including Thomas H. Lee (who had been
serving on the Hills Board of  Directors  as a  representative  of Fund II). The
Hills  litigation was brought in connection  with the July 1995 payment by Hills
of  approximately  $32  million in golden  parachute  payments to certain of its
officers in connection  with the change of control of Hills  associated with the
Dickstein  proxy  contest.   The  General   Partners   discussed  the  potential
liabilities  to Thomas H. Lee in connection  with this  litigation and Fund II's
potential indemnification obligations to Thomas H. Lee, as well as the liquidity
of Fund II's remaining assets.

     Following  discussion of these issues,  the Individual  General Partners of
Fund  II  determined  that  since  Fund  II  may  have  future   indemnification
obligations  with  respect  to such  litigation,  suitable  reserves  should  be
maintained for such contingency.  Accordingly,  the Individual  General Partners
determined,  at such time, that it would not be prudent to make distributions to
Partners.  However,  this reserve  will be reviewed  each quarter by the General
Partners of Fund II in light of the status of the litigation,  and distributions
if any,  will be made in accordance  with Fund II's  Partnership  Agreement.  On
February 22, 2000, the court granted  defendants'  motion for summary  judgement
dismissing claims against Mr. Lee.  However,  Hills has the right to appeal that
ruling after trial of the remaining claims against certain other defendants.  On
June 21,  2000,  the General  Partners  reviewed  the status of the Hills matter
again,  considering  the court's ruling on February 22, 2000, and the Individual
General  Partners  again  determined  that  it  would  not be  prudent  to  make
distributions to Partners at such time. Currently,  Fund II has reserved all the
net proceeds received from the sale of Fitz and Floyd, Inc., the partial paydown
of the Biolease  note and the partial  maturity of Big V note, as well as income
from operations from the third quarter 1999 and forward.

4.   Non-Accrual of Investments

     In accordance with Fund II's Accounting Policy,  Florida Orthopedics,  Inc.
has been on non-accrual status since January 1, 1995.

5.   Related Party Transactions

     The  Investment  Adviser,  pursuant to an investment  management  agreement
among  the  Investment  Adviser,  the  Thomas H. Lee  Company  and Fund II dated
November  10,  1989,  is  responsible  for the  identification,  management  and
liquidation of Mezzanine  Investments  and Bridge  Investments  for Fund II. The
Investment  Adviser  is  entitled  to  receive  an  Investment  Advisory  Fee as
compensation for these services.

     As compensation for its services,  the Fund Administrator,  an affiliate of
the Managing General Partner,  is entitled to receive a Fund Administration Fee.
In addition,  the Fund  Administrator  is entitled to  reimbursement  of 100% of
out-of-pocket expenses incurred by the Fund Administrator on behalf of the Funds
("Reimbursable  Administrative Expenses").  Reimbursable Administrative Expenses
primarily  consist  of  printing,  audit  and tax  preparation,  legal  fees and
expenses, and custodian fees.

     As provided by the Partnership  Agreement,  the Managing General Partner of
Fund II is entitled to receive an incentive  distribution after Limited Partners
have received their Priority Return of 10% per annum ("MGP  Distributions").  Of
the MGP Distributions,  the Investment Adviser is entitled to receive 95% and ML
Mezzanine II Inc. is entitled to receive 5%. During 2000,  the Managing  General
Partner received no cash distributions.



<PAGE>
<TABLE>
<CAPTION>

                                              SCHEDULE 1
                                    ML-LEE ACQUISITION FUND II, L.P.
                                SUPPLEMENTAL SCHEDULE OF REALIZED LOSS
                                FOR THE SIX MONTHS ENDED JUNE 30, 2000
                                       (DOLLARS IN THOUSANDS)
                                             (UNAUDITED)


                                   Principal Amount/     Investment        Net         Realized
 Security                          Number of Shares         Cost         Proceeds        Loss
 --------                          ----------------      ----------      --------      --------
 <S>                               <C>                   <C>             <C>           <C>

 Biolease, Inc. (Note)                   $ 116             $ 105           $ 98          $ (7)
                                         =====             =====           ====          ====

 See the Accompanying Notes to Financial Statements (Unaudited).
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                                        SCHEDULE 2
                                             ML-LEE ACQUISITION FUND II, L.P.
                                   SUPPLEMENTAL SCHEDULE OF UNREALIZED DEPRECIATION
                                         FOR THE SIX MONTHS ENDED JUNE 30, 2000
                                                  (DOLLARS IN THOUSANDS)
                                                       (UNAUDITED)


                                                               Reversal of      Reversal of
                                                                Unrealized       Unrealized
                                                               Depreciation    Depreciation
                                                                   for              for        Total Unrealized   Total Unrealized
                                                             the Three Months  the Six Months    Depreciation       Depreciation
                            Investment        Fair                Ended            Ended            as of              as of
Security                       Cost           Value           June 30, 2000    June 30, 2000   December 31, 1999   June 30, 2000
--------------------------  ----------      --------         ---------------  ---------------  -----------------   --------------
<S>                         <C>             <C>              <C>              <C>              <C>                <C>
Non Public Securities:
Biolease, Inc.
  Common Stock*             $     94        $     -            $         -      $        -        $       (94)       $      (94)
  Subordinated Notes* (a)        576            334                      -               -               (270)             (270)
FLA. Orthopedics, Inc.
  Preferred  Stock*            1,513              -                      -               -             (1,513)           (1,513)
  Subordinated Note*               -              -                      -               -                  -                 -
                                                               -----------      ----------         ----------        ----------
Unrealized Depreciation from Non Public Securities                       -               -             (1,877)           (1,877)
                                                               -----------      ----------         ----------        ----------

Reversal of Unrealized Depreciation on Securities Sold in 2000:
BioLease, Inc.
  Subordinate Note*                                                     47              47                (47)                -
                                                               -----------      ----------         ----------        ----------
Total Unrealized Depreciation                                  $        47      $       47         $   (1,924)       $   (1,877)
                                                               ===========      ==========         ==========        ==========

*  Restricted Security
(a) Investment cost is after April 28, 2000 partial note paydown and excludes accretion of remaining discount of $28.


See the Accompanying Notes to Financial Statements (Unaudited).
</TABLE>
<PAGE>
Item 2.  Management's  Discussion  and Analysis of Financial  Condition and
         Results of Operations

Liquidity & Capital Resources

     At  the  regular  quarterly  meeting  of the  General  Partners  of  ML-Lee
Acquisition  Fund II, L.P.  ("Fund II"),  held on December  14, 1999,  Vernon R.
Alden,  Joseph L. Bower,  Stanley H. Feldberg and Thomas H. Lee (the "Individual
General  Partners")  determined  to extend the initial ten year term of Fund II,
which was due to terminate  January 5, 2000,  for an additional two year period,
pursuant to Section 2.4 of the Partnership Agreement.  Such extension will allow
Fund II to more effectively deal with its assets pending their liquidation.  The
term of Fund II will now expire on January 5, 2002. In addition,  the Individual
General  Partners  have the right,  pursuant to the  Partnership  Agreement,  to
extend the term of Fund II for an additional  one year period if they  determine
that such extension is in the best interest of Fund II.

     On August 6, 1991, the Independent  General Partners approved a reserve for
follow-on investments of approximately $24,900,000 for Fund II. As of August 11,
2000,  this  remaining  reserve  balance  was  approximately  $3,100,000  due to
follow-on  investments  in Petco Animal  Supplies,  Fitz and Floyd,  Inc.,  Fine
Clothing, Inc., Hills Stores, Ghirardelli Holdings and Anchor Advanced Products.
Additionally,  approximately  $8,300,000 of the reserve has been returned to the
partners.  The level of the  reserve  was based upon an  analysis  of  potential
follow-on  investments in specific portfolio companies that may become necessary
to protect or enhance Fund II's existing investment.

     On  April  28,  2000,  BioLease,   Inc.  ("BioLease")  refinanced  existing
construction  and term loans and utilized a portion of the refinancing  proceeds
to  make a  $116,000  partial  paydown  to  Fund  II of  BioLease's  13%  Senior
Subordinated  Note.  Fund II  realized a loss from this  transaction  of $7,000,
after the payment of $18,000 in  transaction  costs and the write-off of $11,000
of unamortized note discount.

     On June  15,  2000,  $2,607,000  (20%)  of  Fund  II's  $13,037,000  senior
subordinated  Note from Big V  Supermarkets,  Inc.  ("Big V")  matured.  Fund II
recorded no gain or loss from this transaction.  An additional  $3,911,000 (30%)
is scheduled to mature on December 15, 2000, with the remaining $6,519,000 (50%)
scheduled to mature on March 1, 2001.

     As previously reported, Fund II may have future indemnification obligations
with respect to certain  litigation  commenced by Hills Stores Company ("Hills")
against its former  directors,  including Thomas H. Lee (who had been serving on
the Hills Board of Directors as a representative  of Fund II). As a result,  the
Individual  General Partners of Fund II determined that suitable reserves should
be maintained for such contingency. Accordingly, the Individual General Partners
have determined that it would not be prudent to make  distributions  to Partners
at this time.  However,  such  reserves  will be  reviewed  each  quarter by the
General  Partners of Fund II in light of the status of this ongoing  litigation,
and distributions, if any, will be made in accordance with Fund II's Partnership
Agreement.  Currently,  Fund II has reserved all the net proceeds  received from
the  August  1999 sale of Fitz and  Floyd,  Inc.,  the  partial  paydown  of the
Biolease note and the partial maturity of the Big V note, as well as income from
operations from the third quarter 1999 and forward.

     As of  June  30,  2000,  Fund  II had  outstanding  a total  (at  cost)  of
$16,734,000 invested in Mezzanine Investments  representing  $14,537,000 Managed
and $2,197,000 Non-Managed portfolio  investments,  and Temporary Investments of
$18,865,000 comprised of commercial paper with maturities of less than 60 days.

     As provided by the Partnership  Agreement,  the Managing General Partner of
Fund II is entitled to receive an incentive  distribution after Limited Partners
have received their Priority Return of 10% per annum ("MGP Distributions").  The
Managing  General Partner is required to defer a portion of any MGP Distribution
earned  from the sale of  portfolio  investments  in excess  of 20% of  realized
capital  gains,  net realized  capital losses and  unrealized  depreciation,  in
accordance with the Partnership Agreement (the "Deferred  Distribution Amount").
Any Deferred  Distribution  Amount is distributable to the Partners  pro-rata in
accordance with their capital contributions, and certain amounts otherwise later
payable to Limited Partners from  distributable cash from operations are instead
payable to the Managing General Partner until the Deferred  Distribution  Amount
is paid.  As of June 30,  2000  there is no  outstanding  Deferred  Distribution
Amount.

     As recovered capital from portfolio company sales is distributed to Limited
Partners,  the Limited  Partners'  net asset  value  ("NAV") per Unit is reduced
accordingly, and the interest income previously generated by holdings which have
been sold will no longer be received by Fund II.  Because  Fund II has only four
portfolio  companies  remaining,  only two of which are  income  producing,  the
amount of interest income received by Fund II is not  significant.  As a result,
it is expected that any future cash (to the extent such cash is not reserved for
expenses and  contingencies - see discussion of Hills matter above) available to
pay  distributions  to Partners will be derived  almost  entirely from recovered
capital and gains from asset sales,  which are subject to market  conditions and
are inherently  unpredictable  as to timing.  Therefore,  in the absence of cash
available for distribution resulting from the future sale of portfolio holdings,
the only cash available for distribution by Fund II will derive from operations;
this cash is estimated to be less than one dollar per Unit each quarter.
<PAGE>
Investment in High-Yield Securities

     Fund II  invested  primarily  in  subordinated  debt  and  preferred  stock
securities   ("High-Yield   Securities"),   generally   linked  with  an  equity
participation,  issued in conjunction with the mezzanine  financing of privately
structured,   friendly  leveraged  acquisitions,   recapitalizations  and  other
leveraged  financings.  High-Yield  Securities  are  debt and  preferred  equity
securities that are unrated or are rated by Standard & Poor's  Corporation as BB
or lower and by Moody's  Investor  Services,  Inc. as Ba or lower.  Risk of loss
upon default by the issuer is significantly  greater with High-Yield  Securities
than  with  investment  grade  securities  because  High-Yield   Securities  are
generally unsecured and are often subordinated to other creditors of the issuer.
Also,  these  issuers  usually  have high  levels of  indebtedness  and are more
sensitive  to adverse  economic  conditions,  such as  recession  or  increasing
interest rates,  than  investment  grade issuers.  Most of these  securities are
subject to resale  restrictions and generally there is no quoted market for such
securities.

     Although Fund II cannot eliminate the risks associated with its investments
in High-Yield Securities,  it has established risk management policies.  Fund II
subjected each prospective  investment to rigorous  analysis and made only those
investments  that were  recommended by the Investment  Advisor and that met Fund
II's  investment  guidelines or that had otherwise been approved by the Managing
General Partner and the Independent General Partners. Fund II's investments were
measured  against  specified Fund II investment and performance  guidelines.  To
limit the  exposure of Fund II's capital in any single  issuer,  Fund II limited
the  amount of its  investment  in a  particular  issuer.  Fund II's  Investment
Adviser also continually  monitors portfolio  companies in order to minimize the
risks associated with its investments in High-Yield Securities.

     The  Investment   Adviser  reviews  each  portfolio   company's   financial
statements quarterly.  In addition, the Investment Adviser routinely reviews and
discusses  financial and operating  results with the  company's  management  and
where  appropriate,   attends  board  of  director  meetings.   In  some  cases,
representatives  of the Investment  Adviser,  acting on behalf of the Funds (and
affiliated investors where applicable), serve as one or more of the directors on
the  boards  of  portfolio  companies.  Fund II may,  from  time to  time,  make
follow-on investments to the extent necessary to protect or enhance its existing
investments.

Forward Looking Information

     In  addition  to  historical   information  contained  or  incorporated  by
reference   in  this  report  on  Form  10-Q,   Fund  II  may  make  or  publish
forward-looking statements about management expectations,  strategic objectives,
business  prospects,   anticipated  financial  performance,  and  other  similar
matters.  In  order  to  comply  with the  terms  of the  safe  harbor  for such
statements  provided by the Private  Securities  Litigation  Reform Act of 1995,
Fund II notes that a variety of factors,  many of which are beyond its  control,
affect its operations,  performance,  business  strategy,  and results and could
cause actual results and experience to differ  materially from the  expectations
expressed in these  statements.  These factors include,  but are not limited to,
the effect of changing  economic and market  conditions,  trends in business and
finance and in investor  sentiment,  the level of volatility of interest  rates,
the actions undertaken by both current and potential new competitors, the impact
of current,  pending,  and future  legislation and regulation both in the United
States and throughout the world, and the other risks and uncertainties  detailed
in this Form 10-Q.  Fund II undertakes no  responsibility  to update publicly or
revise any forward-looking statements.

Results of Operations

Net Investment Income

     For the three and six months ended June 30, 2000 and 1999,  Fund II had net
investment income of $456,000, $1,066,000, $357,000 and $662,000,  respectively.
The increase in net investment income during the three and six months ended June
30, 2000, as compared to the same periods in 1999, is primarily  attributable to
an increase in interest and discount income from Temporary Investments and other
factors, as discussed below.

Investment Income and Expenses

     Total investment  income from operations for the three and six months ended
June 30, 2000 and 1999 consists primarily of interest and discount income earned
on Fund II's  portfolio of Mezzanine and Temporary  Investments  and  short-term
money market  instruments.  For the three and six months ended June 30, 2000 and
1999,  Fund II had  investment  income of  $742,000,  $1,668,000,  $647,000  and
$1,274,000, respectively. The increase in investment income during the three and
six months  ended June 30,  2000,  as compared to the same  periods in 1999,  is
primarily  attributable to an increase in income earned on Temporary Investments
as a result of investing the Fitz and Floyd, Inc. sale proceeds, which have been
reserved,   the  Biolease,   Inc.   partial  paydown  proceeds  and  the  Big  V
Supermarkets, Inc. partial maturity proceeds. This increase was partially offset
by a  decrease  in income  earned on  Mezzanine  Investments  as a result of the
August 1999 sale of Fitz and Floyd,  Inc., the April 2000 partial paydown of the
Biolease, Inc. subordinated note and the June 2000 partial maturity of the Big V
Supermarkets,  Inc.  senior  subordinated  note.  In  addition,  the increase in
investment  income during the six months ended June 30, 2000, as compared to the
same  period in 1999,  is  attributable  to a $205,000  adjustment  in the first
quarter of 2000 to correct for a 1999  understatement  of  Mezzanine  Investment
income.

     Major  expenses  for the three and six months  ended June 30, 2000 and 1999
consisted of Investment Advisory Fees and Administrative Expenses.

     The  Investment   Adviser  and  Fund   Administrator   both  receive  their
compensation on a quarterly basis. The total Investment Advisory Fee incurred by
Fund II to the  Investment  Adviser for the three and six months  ended June 30,
2000 and 1999 were $167,000, $333,000, $167,000 and $333,000,  respectively, and
was  calculated  at an  annual  rate of 1.0% of  assets  under  management  (net
offering proceeds reduced by cumulative capital reductions and realized losses),
with a minimum annual amount of $1,200,000 for the Funds on a combined basis.

     As compensation  for its services,  the Fund  Administrator  is entitled to
receive an annual  amount of $400,000  for the Funds on a combined  basis,  plus
reimbursement   of  100%  of  out-of-pocket   expenses   incurred  by  the  Fund
Administrator  on behalf of Fund II  ("Reimbursable  Administrative  Expenses").
Reimbursable  Administrative Expenses primarily consist of printing,  audit, tax
preparation,  legal fees and expenses, and custodian fees. For the three and six
months ended June 30, 2000 and 1999, Fund II incurred a Fund  Administration Fee
of $55,000, $111,000, $55,000 and $111,000,  respectively. For the three and six
months ended June 30, 2000 and 1999, Fund II incurred $43,000, $103,000, $50,000
and $125,000, respectively, in Reimbursable Administrative Expenses.

     For the six months ended June 30, 2000 and 1999,  the Fund  incurred  legal
and  professional  fees of $11,000 and $0,  respectively.  The Fund  incurred no
legal and  professional  fees for the three months ended June 30, 2000 and 1999.
Such  expenses are  primarily  attributable  to legal fees incurred on behalf of
indemnified defendants in connection with the Hills litigation.

Net Assets

     Fund II's net assets  increased by  $1,106,000  during the six months ended
June 30, 2000, due to net investment  income of $1,066,000 and a reversal of net
unrealized  depreciation of $47,000,  partially offset by a net realized loss of
$7,000 from the partial paydown of a Mezzanine Investment. During the six months
ended June 30, 1999, Fund II's net assets  decreased by $4,370,000,  due to cash
distributions  to partners of $8,047,000  and a realized loss from the sale of a
Mezzanine  Investment of $1,026,000,  partially offset by net investment  income
of $662,000 and reversal of net unrealized depreciation of $4,041,000.

Unrealized Appreciation and Depreciation on Investments

     Fund II  recorded  a reversal  of net  unrealized  depreciation  of $47,000
during the six months ended June 30, 2000 as compared to a  $4,041,000  reversal
of net  unrealized  depreciation  during  the same  period  in 1999.  Fund  II's
cumulative  net  unrealized  depreciation  on  investments  as of June 30, 2000
totaled $1,877,000.

     The  Managing  General  Partner and the  Investment  Adviser  review,  on a
quarterly  basis,  the valuation of Fund II's portfolio  investments that do not
have a readily  ascertainable  market  value;  such  investment  valuations  are
subject  to final  approval  from the  Individual  General  Partners.  Portfolio
investments  are  valued at  original  cost plus  accreted  value in the case of
original issue discount or deferred pay  securities.  Such  investments  will be
revalued  if there is an  objective  basis  for doing so at a  different  price.
Investments  will be written down in value if the Managing  General  Partner and
Investment  Adviser believe adverse credit  developments of a significant nature
require a write-down of such securities. Investments will be written up in value
only if there has been an  arms'-length  third party  transaction to justify the
increased  valuation.  Although  the  Managing  General  Partner and  Investment
Advisor  use  their  best  judgement  in  estimating  the  fair  value  of these
investments, there are inherent limitations in any estimation technique.

     As  a  result  of  total  net  realized  and  unrealized  appreciation  and
depreciation  recorded by Fund II through June 30, 2000,  Limited  Partners' NAV
was $150.79 per Unit. Fund II's net assets include private placement  securities
(approximately  43.8% of net assets) for which there are no ascertainable market
values and commercial paper  (approximately 55.9% of net assets) which is stated
at  amortized  cost.  Fund  II's  private  placement  securities  are  primarily
comprised of its  investments in Big V Supermarkets,  Inc.,  which are valued at
cost.  The June 30,  2000 NAV figure  does not  reflect any change that may have
occurred  in the value of Fund  II's  holdings  since  June 30,  2000,  does not
reflect ongoing costs related to the Hills  litigation other than those incurred
through June 30, 2000,  nor does it represent the Units'  current  market value.
Furthermore,  Limited Partners may not be able to realize this value upon a sale
of their Units.

     The  information   presented  herein  is  based  on  pertinent  information
available to the Managing General Partner and Investment  Adviser as of June 30,
2000. Although the Managing General Partner and Investment Adviser are not aware
of any  factors  not  disclosed  herein  that  would  significantly  affect  the
estimated  fair  value  amounts,  such  amounts  have not  been  comprehensively
revalued  since  that  time,  and the  current  estimated  fair  value  of these
investments may have changed significantly since that point in time.

     For  additional  information  please  refer  to  Supplemental  Schedule  of
Unrealized Depreciation - Schedule 2.

Realized Losses

     Fund II recorded a realized loss of $7,000 during the six months ended June
30, 2000, as compared to a realized loss of $1,026,000 during the same period in
1999.

     Should a Limited  Partner  decide to sell his Units,  any such sale will be
recorded  on the  books  and  records  of  Fund  II  quarterly,  only  upon  the
satisfactory  completion and acceptance of Fund II's transfer  documents.  There
can be no assurances  that such  transfer will be effected  before any specified
date. Additionally,  pursuant to the Partnership Agreement,  until a transfer is
recognized,  the Limited  Partner of record (i.e. the transferor) is entitled to
receive all the benefits and burdens of ownership of Units,  and any  transferee
has no rights to distributions  of sale proceeds  generated at any time prior to
the recognition of the transfer and assignment. Accordingly,  Distributable Cash
from  Investments for a quarter and  Distributable  Capital  Proceeds from sales
after  transfer or assignment  have been entered into,  but before such transfer
and  assignment is  recognized,  would be payable to the  transferor and not the
transferee.

Item 3.  Quantitative and Qualitative Disclosure About Market Risk

     As of June 30, 2000, Fund II maintains a portion of its cash equivalents in
financial  instruments  with original  maturities of three months or less. These
financial  instruments  are subject to interest  rate risk,  and will decline in
value if interest rates increase. A significant increase or decrease in interest
rates is not expected to have a material effect on Fund II's financial position.
<PAGE>
                          PART II - OTHER INFORMATION


     Item 1. Legal Proceedings.
             -----------------
             None

     Item 2. Changes in Securities and Use of Proceeds.
             -----------------------------------------
             None

     Item 3. Defaults Upon Senior Securites.
             ------------------------------
             None

     Item 4. Submission of Matters to a Vote of Security holders.
             ---------------------------------------------------
             None

     Item 5. Other Information.
             -----------------
             None

     Item 6. Exhibits and Reports on Form 8-K.
             --------------------------------
             (a) Exhibits:

                 Exhibit 27 - Financial  Data Schedule for the quarter  ended
                 June 30, 2000.

             (b) Reports on Form 8-K:

                 None

<PAGE>
                                    SIGNATURES



     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  on the 14th day of
August, 2000.


                                   ML-LEE ACQUISITION FUND II, L.P.

                             By:   Mezzanine Investments II, L.P.
                                   Managing General Partner

                             By:   ML Mezzanine II Inc.,
                                   its General Partner



Dated:  August 14, 2000        /s/ Kevin T. Seltzer
                               ----------------------------------
                                   Kevin T. Seltzer
                                   ML Mezzanine II, Inc.
                                   Vice President and Treasurer
                                  (Principal Financial Officer of Registrant)