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

                                  FORM 10-Q

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

                  For the Quarterly Period Ended March 31, 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) 236-6577

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 March 31, 2000 (Unaudited) and December 31, 1999 (Unaudited)

Statements of Operations
    For the Three Months Ended March 31, 2000 and 1999 (Unaudited)

Statements of Changes in Net Assets
    For the Three Months Ended March 31, 2000 and 1999 (Unaudited)

Statements of Cash Flows
    For the Three Months Ended March 31, 2000 and 1999 (Unaudited)

Statements of Changes in  Partners'  Capital
    For the Three Months Ended March 31, 2000 (Unaudited)

Schedule of Portfolio Investments
    As of March 31, 2000 (Unaudited)

Notes to Financial Statements (Unaudited)

Supplemental Schedule of Net Unrealized Appreciation and Depreciation
    - Schedule 1 (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)


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

Investments - Notes 4 and 6
  Portfolio Investments at fair value
    Managed Companies (amortized cost $17,144
      as of March 31, 2000 and as of December 31, 1999)                      $   17,144                  $           17,144
    Non-Managed Companies (amortized cost $2,297
      as of March 31, 2000 and as of December 31, 1999)                             406                                 406
    Temporary Investments, at amortized cost (cost $15,726
      as of March 31, 2000 and $15,255 as of December 31, 1999)                  15,842                              15,280
Cash                                                                                  3                                  36
Accrued Interest & Other Receivable                                                 256                                 163
Prepaid Expenses                                                                      4                                   6
                                                                       ----------------                  ------------------
Total Assets                                                           $         33,655                  $           33,035
                                                                       ================                  ==================

Liabilities and Partners' Capital:

Liabilities
    Legal and Professional Fees Payable                                $             14                  $                5
    Reimbursable Administrative Expenses Payable - Note 5                           118                                 105
    Independent General Partners' Fees Payable - Note 5                               3                                   6
    Deferred Interest Income                                                         35                                  44
                                                                       ----------------                  ------------------
Total Liabilities                                                                   170                                 160
                                                                       ----------------                  ------------------

Partners' Capital
    Individual General Partner                                                       13                                  13
    Managing General Partner                                                        431                                 322
    Limited Partners (221,745 Units)                                             33,041                              32,540
                                                                       ----------------                  ------------------
Total Partners' Capital                                                          33,485                              32,875
                                                                       ----------------                  ------------------
Total Liabilities and Partners' Capital                                $         33,655                  $           33,035
                                                                       ================                  ==================

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

                                                                                      For the Three Months Ended
                                                                                 ------------------------------------
                                                                               March 31, 2000               March 31, 1999
                                                                             ------------------          -------------------
<S>                                                                          <C>                         <C>
Investment Income
  Interest                                                                   $              780          $               569
  Discount and Other Income                                                                 146                           58
                                                                             ------------------          -------------------
    Total Investment Income                                                                 926                          627
                                                                             ------------------          -------------------
Expenses:
  Investment Advisory Fee - Note 5                                                          166                          166
  Fund Administration Fee - Note 5                                                           56                           56
  Reimbursable Administrative Expenses - Note 5                                              60                           75
  Legal and Professional Fees                                                                11                            -
  Independent General Partners' Fees and Expenses                                            21                           24
  Insurance Expense                                                                           2                            1
                                                                             ------------------          -------------------
    Total Expenses                                                                          316                          322
                                                                             ------------------          -------------------
Net Investment Income                                                                       610                          305
                                                                             ------------------          -------------------
Realized Loss on Sale of Investment                                                           -                       (1,026)
                                                                             ------------------          -------------------
Net Change in Unrealized Depreciation on Investments - Schedule 1
  Nonpublic Securities                                                                        -                        4,041
                                                                             ------------------          -------------------

Net Increase in Net Assets Resulting from Operations                                        610                        3,320

Less:  Earned MGP Distributions to Managing General Partner                                (107)                         (98)
                                                                             ------------------          -------------------
Net Increase Available For Pro-Rata Distribution to All Partners             $              503          $             3,222
                                                                             ==================          ===================


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 Three Months Ended
                                                                                 ----------------------------------
                                                                           March 31, 2000               March 31, 1999
                                                                          ----------------             ----------------
<S>                                                                        <C>                        <C>
From Operations:
  Net Investment Income                                                   $            610             $            305
  Realized Loss on Sale of Investment                                                    -                       (1,026)
  Net Change in Unrealized Depreciation on Investments                                   -                        4,041
                                                                          ----------------             ----------------

  Net Increase in Net Assets Resulting from Operations                                 610                        3,320
  Cash Distributions to Partners                                                         -                       (2,120)
                                                                          ----------------             ----------------

  Total Increase                                                                       610                        1,200
Net Assets:
  Beginning of Year                                                                 32,875                       31,026
                                                                          ----------------             ----------------

  End of Period                                                           $         33,485             $         32,226
                                                                          ================             ================


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 Three Months Ended
                                                                                 -------------------------------
                                                                         March 31, 2000                 March 31, 1999
                                                                        ----------------               -----------------
<S>                                                                     <C>                            <C>
Increase (Decrease) in Cash

Cash Flows From Operating Activities:
  Interest, Discount and Other Income                                   $            733               $           1,663
  Legal and Professional Fees                                                         (2)                             (2)
  Investment Advisory Fee                                                           (166)                           (167)
  Fund Administration Fee                                                            (56)                            (56)
  Independent General Partners' Fees and Expenses                                    (24)                            (35)
  Reimbursable Administrative Expenses                                               (47)                            (22)
  Purchase of Temporary Investments, Net                                            (471)                         (5,646)
  Proceeds from Sale of Portfolio Company Investment                                   -                           6,387
                                                                        ----------------               -----------------
Net Cash Provided by (Used in) Operating Activities                                  (33)                          2,122
                                                                        ----------------               -----------------
Cash Flows from Financing Activities:
  Cash Distributions to Partners                                                       -                          (2,120)
                                                                        ----------------               -----------------
Net Cash Used in Financing Activities                                                  -                          (2,120)
                                                                        ----------------               -----------------
  Net Increase (Decrease) in Cash                                                    (33)                              2
  Cash at Beginning of Year                                                           36                               5
                                                                        ----------------               -----------------
Cash at End of Period                                                   $              3               $               7
                                                                        ================               =================


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

Net Investment Income                                                   $            610               $             305
                                                                        ----------------               -----------------
Adjustments to Reconcile Net Investment Income
  to Net Cash Provided by (Used in) Operating Activities
 (Increase) Decrease in Investments at Cost                                         (471)                          2,548
  Increase in Receivable for Investments Sold                                          -                            (782)
 (Increase) Decrease in Accrued Interest and Discount Receivable                    (193)                          1,036
  Decrease in Prepaid Expenses                                                         2                               1
  Increase (Decrease) in Legal and Professional Fees Payable                           9                              (2)
  Increase in Reimbursable Administrative Expenses Payable                            13                              53
  Decrease in Independent General Partners' Fees Payable                              (3)                            (11)
  Realized Loss on Sale of Investment                                                  -                          (1,026)
                                                                        -----------------               ----------------
Total Adjustments                                                                   (643)                          1,817
                                                                        -----------------               ----------------
Net Cash Provided by (Used in) Operating Activities                     $            (33)               $          2,122
                                                                        =================               ================

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 Three Months Ended March 31, 2000
  Partners' Capital as of January 1, 2000                              $         13  $      322    $    32,540   $  32,875
  Allocation of Net Investment Income                                             -         109            501         610
                                                                       ------------  ----------    -----------   ---------
Partners' Capital as of March 31, 2000                                 $         13  $      431    $    33,041   $  33,485
                                                                       ============  ==========    ===========   =========

See the Accompanying Notes to Financial Statements (Unaudited).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                 ML-LEE ACQUISITION FUND II, L.P.
                                                SCHEDULE OF PORTFOLIO INVESTMENTS
                                                         MARCH 31, 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)
$13,037            Big V Supermarkets, Inc., Sr. Sub. Nt. 14.14% due 03/15/01(b)       12/27/90   $ 13,037   $ 13,037
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)                                     --------------------------------
                                                                                                    17,144     17,144       51.34%
                                                                                                  --------------------------------
                   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                                          $ 17,144   $ 17,144       51.34%
                                                                                                  ===============================


                   NON-MANAGED COMPANIES

                   BIOLEASE, INC.- Note 6, Schedule 1
$784               BioLease, Inc., 13% Sub. Nt. due 06/06/04 (b)                        06/08/94  $    676   $    392
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
                                                                                                  -------------------------------
                                                                                                       784        406      1.22%
                                                                                                  -------------------------------

                   FLA. ORTHOPEDICS, INC. - Schedule 1
 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                                     $  2,297    $    406       1.22%
                                                                                                  ===============================

 See the Accompanying Notes to Financial Statements (Unaudited).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                           ML-LEE ACQUISITION FUND II, L.P.
                                   SCHEDULE OF PORTFOLIO INVESTMENTS (continued)
                                                  MARCH 31, 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   $ 13,713    $ 13,429    40.22%
                  Preferred Stock, Common Stock, Warrants and Stock Rights           Various      5,728       4,121    12.34%
                                                                                               ------------------------------
                  TOTAL MEZZANINE INVESTMENTS                                                  $ 19,441    $ 17,550    52.56%
                                                                                               ==============================

                  TEMPORARY INVESTMENTS

                  COMMERCIAL PAPER
$10,000           General Electric Capital Services, 5.75% due 4/3/00                2/14/00   $  9,922    $  9,995
$ 5,450           Prudential Funding, 5.74% due 4/3/00                               2/14/00      5,407       5,447
$   400           American General Finance, 5.75% due 4/3/00                         2/17/00        397         400
                                                                                               -----------------------------
                  TOTAL INVESTMENT IN COMMERCIAL PAPER                                         $ 15,726    $ 15,842    47.44%
                                                                                               -----------------------------
                  TOTAL TEMPORARY INVESTMENTS                                                  $ 15,726    $ 15,842    47.44%
                                                                                               -----------------------------
                  TOTAL INVESTMENT PORTFOLIO                                                   $ 35,167    $ 33,392   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 have not been audited by PricewaterhouseCoopers LLP.
(f)     Represents original cost and excludes accretion of discount of $33 for
        Mezzanine Investments and $116 for Temporary Investments.

See the Accompanying Notes to Financial Statements (Unaudited).
</TABLE>
<PAGE>
                         ML-LEE ACQUISITION FUND II, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 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  months  ended March 31, 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

     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,
which is  currently  scheduled  to commence in May 2000.  On March 7, 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., as well as the third and fourth  quarter 1999
income from operations.

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.
<PAGE>
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.

6.   Subsequent Event

     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.
<PAGE>
<TABLE>
<CAPTION>
                                                       SCHEDULE 1
                                              ML-LEE ACQUISITION FUND II, L.P.
                               SUPPLEMENTAL SCHEDULE OF UNREALIZED APPRECIATION AND DEPRECIATION
                                        FOR THE THREE MONTHS ENDED MARCH 31, 2000
                                                  (DOLLARS IN THOUSANDS)
                                                       (UNAUDITED)


                                                                         Unrealized          Total Unrealized      Total Unrealized
                                                                        Appreciation           Appreciation          Appreciation
                                                                     (Depreciation) for       (Depreciation)        (Depreciation)
                                       Investment        Fair          the Three Months           as of                  as of
Security                                  Cost           Value      Ended March 31, 2000    December 31, 1999       March 31, 2000
--------                               -----------      -------     --------------------    ------------------     ----------------
<S>                                    <C>              <C>         <C>                     <C>                    <C>
Non Public Securities
Biolease, Inc.
  Common Stock*                           $     94      $     -                $       -            $     (94)           $      (94)
  Subordinated Notes* (a)                      676          392                        -                 (317)                 (317)
FLA. Orthopedics, Inc.
  Preferred  Stock*                          1,513            -                        -               (1,513)               (1,513)
  Subordinated Note*                             -            -                        -                    -                     -
                                                                               ---------            ---------            ----------
Total Unrealized Depreciation                                                  $       -            $  (1,924)           $   (1,924)
                                                                               =========            =========            ==========

*  Restricted Security
(a) Investment cost excludes accretion of discount of $33


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 May 12,
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.

     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,
which is  currently  scheduled  to commence in May 2000.  On March 7, 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., as well as the third and fourth  quarter 1999
income from operations.

     As of  March  31,  2000,  Fund II had  outstanding  a total  (at  cost)  of
$19,441,000 invested in Mezzanine Investments  representing  $17,144,000 Managed
and $2,297,000 Non-Managed portfolio  investments,  and Temporary Investments of
$15,726,000 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 March 31,  2000 there is no  outstanding  Deferred  Distribution
Amount.

     As recovered capital from portfolio company sales is distributed to Limited
Partners,  the 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
distributions  paid to Partners will be derived  almost  entirely from recovered
capital  and  gains,  if any,  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,  Fund II  will  have  distributable  cash  from  operations
estimated to be less than one dollar per Unit each quarter  available for future
cash  distributions,  to the extent such cash is not  reserved  for expenses and
contingencies (see discussion of Hills matter above).

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  months  ended  March 31,  2000,  Fund II had net  investment
income of $610,000 as compared to $305,000  for the three months ended March 31,
1999.  The  increase in net  investment  during the three months ended March 31,
2000,  as compared to the same period in 1999, is primarily  attributable  to an
increase in interest  income from both Mezzanine and Temporary  Investments  and
other factors, as discussed below.

Investment Income and Expenses

     Total  investment  income from  operations for the three months ended March
31, 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  months  ended March 31,  2000,  Fund II had
investment income of $926,000 as compared to $627,000 for the three months ended
1999. The increase in investment  income during the three months ended March 31,
2000,  as compared to the same period in 1999,  is primarily  attributable  to a
$205,000 adjustment to correct for a 1999 understatement of Mezzanine Investment
income,  plus an increase in income earned on Temporary  Investments as a result
of investing the Fitz and Floyd,  Inc. sale proceeds,  which have been reserved.
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.

     Major expenses for the three months ended March 31, 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 each of the three months ended March 31,
2000 and 1999 was  $166,000  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 each of the three
months ended March 31, 2000 and 1999, Fund II incurred a Fund Administration Fee
of $56,000. For the three months ended March 31, 2000 and 1999, Fund II incurred
$60,000 and $75,000, respectively, in Reimbursable Administrative Expenses.

     Legal and  professional  fees for the three months ended March 31, 2000 and
1999 were $11,000 and $0, respectively.  These expenses are largely attributable
to legal fees incurred and advanced on behalf of indemnified  defendants as well
as fees  incurred  directly by Fund II in  connection  with  certain  litigation
proceedings.

Net Assets

     Fund II's net assets  increased  by $610,000  during the three months ended
March 31,  2000,  due to net  investment  income of  $610,000.  During the three
months ended March 31, 1999, Fund II's net assets  increased by $1,200,000,  due
to net investment income $305,000 and reversal of net unrealized depreciation of
$4,041,000, partially offset by cash distributions to partners of $2,120,000 and
a realized loss from the sale of a Mezzanine Investment of $1,026,000.

Unrealized Appreciation and Depreciation on Investments

     Fund II recorded no  unrealized  appreciation  or  depreciation  during the
three months  ended March 31, 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 March 31, 2000 totaled $1,924,000.

     The  Managing  General  Partner  and  the  Investment  Adviser  review  the
valuation  of  Fund  II's  portfolio  investments  that  do not  have a  readily
ascertainable  market value on a quarterly  basis with 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.

     Approximately  55.3% of Fund II's  investments  (at cost) are  invested  in
private placement securities for which there are no ascertainable market values,
while  approximately  44.7% is invested in commercial paper with maturities less
than 60 days.  Although the Managing General Partner and Investment  Adviser use
their best judgment in estimating the fair value of these investments, there are
inherent  limitations in any  estimation  technique.  Therefore,  the fair value
estimates  presented  herein are not necessarily  indicative of the amount which
Fund II could realize in a current transaction.  As of March 31, 2000, Fund II's
investment in Big V Supermarkets  Inc.  represents  approximately  51.3% of Fund
II's fair value.

     The  information   presented  herein  is  based  on  pertinent  information
available to the Managing General Partner and Investment Adviser as of March 31,
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
Net Unrealized Appreciation and Depreciation - Schedule 1.

Net Realized Gains and Losses

     Fund II recorded no realized  gains or lossed during the three months ended
March 31, 2000,  as compared to a realized  loss of  $1,026,000  during the same
period in 1999.
<PAGE>
Cash Distributions

     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.
<PAGE>
Item 3.  Quantitative and Qualitative Disclosure About Market Risk

     As of March 31, 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
                 March 31, 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 15th day of
May, 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:  May 15, 2000           /s/ Kevin T. Seltzer
                               ----------------------------------
                                   Kevin T. Seltzer
                                   ML Mezzanine II, Inc.
                                   Vice President and Treasurer
                                  (Principal Financial Officer of Registrant)