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 March 31, 2001

                         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)

                      4 World Financial Center - 26th Floor
                               New York, NY 10080

              (Address of principal executive offices and zip code)

Registrant's telephone number, including area code:  1 (800) 288-3694

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, 2001 (Unaudited) and December 31, 2000 (Unaudited)

Statements of Operations
    For the Three Months Ended March 31, 2001 and 2000 (Unaudited)

Statements of Changes in Net Assets
    For the Three Months Ended March 31, 2001 and 2000 (Unaudited)

Statements of Cash Flows
    For the Three Months Ended March 31, 2001 and 2000 (Unaudited)

Statements of Changes in  Partners'  Capital
    For the Three Months Ended March 31, 2001 (Unaudited)

Schedule of Portfolio Investments
    As of March 31, 2001 (Unaudited)

Notes to Financial Statements (Unaudited)

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

                                                                    March 31,     December 31,
                                                                      2001            2000
                                                                  -----------     ------------
<S>                                                               <C>             <C>
Assets:

Investments - Notes 3, 4
  Portfolio Investments at fair value
    Managed Companies (amortized cost $14,537
      at March 31, 2001 and December 31, 2000)                    $   14,537       $   14,537
    Non-Managed Companies (amortized cost $2,183
      at March 31, 2001 and December 31, 2000)                           334              334
    Temporary Investments, at amortized cost (cost $19,381
      at March 31, 2001 and $19,271 at December 31, 2000)             19,497           19,393
Cash                                                                      22              162
Accrued Interest and Other Receivable                                    603              591
Prepaid Expenses                                                          21               23
                                                                  ----------       ----------
Total Assets                                                      $   35,014       $   35,040
                                                                  ==========       ==========


Liabilities and Partners' Capital:

Liabilities
  Reimbursable Administrative Expenses Payable - Note 6           $      115       $      104
  Independent General Partners' Fees Payable - Note 6                     11               16
  Legal and Professional Fees Payable                                     58               42
  Deferred Interest Income                                                 4                4
                                                                  ----------       ----------
Total Liabilities                                                        188              166
                                                                  ----------       ----------

Partners' Capital
  Individual General Partner                                              13               13
  Managing General Partner                                               612              612
  Limited Partners (221,745 Units)                                    34,201           34,249
                                                                  ----------       ----------
Total Partners' Capital                                               34,826           34,874
                                                                  ----------       ----------
Total Liabilities and Partners' Capital                           $   35,014       $   35,040
                                                                  ==========       ==========

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,
                                                            --------------------
                                                              2001       2000
                                                            --------   --------
<S>                                                         <C>        <C>
Investment Income:
  Interest                                                  $     23   $    780
  Discount                                                       283        146
                                                            --------   --------
    Total Investment Income                                      306        926
                                                            --------   --------
Expenses:
  Investment Advisory Fee - Note 6                               166        166
  Fund Administration Fee - Note 6                                56         56
  Reimbursable Administrative Expenses - Note 6                   56         60
  Independent General Partners' Fees and Expenses                 28         21
  Legal and Professional Fees                                     46         11
  Insurance Expense                                                2          2
                                                            --------   --------
    Total Expenses                                               354        316
                                                            --------   --------

Net Investment Income (Loss)                                     (48)       610

Less: Earned MGP Distributions to Managing General Partner         -       (107)
                                                            --------   --------
Net Increase (Decrease) Available for Pro-Rata
  Distribution to All Partners                              $    (48)  $    503
                                                            ========   ========

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,
                                                ----------------------------
                                                   2001               2000
                                                ---------          ---------
<S>                                             <C>                <C>
From Operations:
  Net Investment Income (Loss)                  $     (48)         $     610

Net Assets:
  Beginning of Year                                34,874             32,875
                                                ---------          ---------
  End of Period                                 $  34,826          $  33,485
                                                =========          =========

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,
                                                      --------------------------
                                                        2001             2000
                                                      --------         --------
<S>                                                   <C>              <C>
Decrease in Cash

Cash Flows From Operating Activities:
  Interest and Discount Income                        $    312         $    733
  Investment Advisory Fee                                 (166)            (166)
  Fund Administration Fee                                  (56)             (56)
  Reimbursable Administrative Expenses                     (45)             (47)
  Independent General Partners' Fees and Expenses          (33)             (24)
  Legal and Professional Fees                              (31)              (2)
  Purchase of Temporary Investments, Net                  (110)            (471)
  Purchase of Portfolio Company Investment                 (11)               -
                                                      --------         --------
Net Cash Used in Operating Activities                     (140)             (33)

Cash at Beginning of Year                                  162               36
                                                      --------         --------
Cash at End of Period                                 $     22         $      3
                                                      ========         ========


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

Net Investment Income (Loss)                          $    (48)        $    610
                                                      --------         --------
Adjustments to Reconcile Net Investment Income
 (Loss) to Net Cash Used in Operating Activities:
  Increase in Investments at Cost                         (110)            (471)
 (Increase) Decrease in Accrued Interest
    and Discount Receivable                                  6             (193)
  Increase in Other Receivable                             (12)               -
  Decrease in Prepaid Expenses                               2                2
  Increase in Reimbursable Administrative
    Expenses Payable                                        11               13
  Decrease in Independent General Partners'
    Fees Payable                                            (5)              (3)
  Increase in Legal and Professional
    Fees Payable                                            16                9
                                                      --------         --------
Total Adjustments                                          (92)            (643)
                                                      --------         --------
Net Cash Used in Operating Activities                 $   (140)        $    (33)
                                                      ========         ========

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, 2001
  Partners' Capital as of January 1, 2001          $    13   $   612   $ 34,249   $ 34,874
  Allocation of Net Investment Loss                      -         -        (48)       (48)
                                                   -------   -------   --------   --------
Partners' Capital as of March 31, 2001             $    13   $   612   $ 34,201   $ 34,826
                                                   =======   =======   ========   ========

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, 2001
                                                     (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)(d) 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)
                                                                                                  -------------------------------
                   TOTAL INVESTMENT IN MANAGED COMPANIES                                          $ 14,537   $ 14,537       42.30%
                                                                                                  ===============================

                   NON-MANAGED COMPANIES

                   BIOLEASE, INC.- Schedule 1
$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          -
9,362 Options      BioTransplant, Inc., Common Stock Purchase Options(c)               02/02/96          -          -
                                                                                                  -------------------------------
                                                                                                       670        334        0.97%
                                                                                                  -------------------------------
                   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)          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                                      $  2,183    $    334       0.97%
                                                                                                  ===============================

                   SUMMARY OF MEZZANINE INVESTMENTS

                   Subordinated Notes                                                  Various    $ 11,006    $ 10,764      31.32%
                   Preferred Stock, Common Stock, Options, Warrants and Stock Rights   Various       5,714       4,107      11.95%
                                                                                                  -------------------------------
                   TOTAL MEZZANINE INVESTMENTS                                                    $ 16,720    $ 14,871      43.27%
                                                                                                  ===============================

                   TEMPORARY INVESTMENTS

                   COMMERCIAL PAPER
$10,000            General Electric Capital Corp, 5.40% due 4/2/01                     02/20/01   $  9,938    $  9,998
$ 9,500            American General, 5.31% due 4/2/01                                  02/20/01      9,443       9,499
                                                                                                  -------------------------------
                   TOTAL INVESTMENT IN COMMERCIAL PAPER                                           $ 19,381    $ 19,497      56.73%
                                                                                                  -------------------------------
                   TOTAL TEMPORARY INVESTMENTS                                                    $ 19,381    $ 19,497      56.73%
                                                                                                  ===============================

                   TOTAL INVESTMENT PORTFOLIO                                                     $ 36,101    $ 34,368     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 $28 for
    Mezzanine Investments and $116 for Temporary Investments.
(g) Big V failed to make the November 15, 2000 interest payment due under the note.
    Principal payments were scheduled to be made on December 15, 2000 for $3,911,000 and on
    March 15, 2001 for the remaining $6,519,000. However, since the November 22, 2000 Big V
    Supermarkets, Inc. bankruptcy filing, these two principal payments and the
    February 15, 2001 and March 15, 2001 interest payments due under the note have been stayed.
    See also Note 3 of Notes to Financial Statements.

See the Accompanying Notes to Financial Statements (Unaudited).
</TABLE>
<PAGE>
                         ML-LEE ACQUISITION FUND II, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 2001
                                   (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.  The results of operations for
the three  months  ended March 31, 2001 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, 2000, which is hereby  incorporated by
reference, has been omitted.

3.   Investment Transactions

     Before consenting to the distribution of all or part of Fund II's reserves,
at the quarterly  meetings held on September 19, 2000 and February 21, 2001, the
General  Partners  reviewed  certain  contractual  covenants,   commitments  and
contingencies which may affect Fund II by virtue of its investments in Big V and
Big V Holdings Corp. ("BVH", Big V's parent company). Such potential obligations
arise from letter  agreements (the  "Agreements")  entered into by Wakefern Food
Corporation   ("Wakefern"),   Big  V  (together  with  certain  of  its  related
companies),  and Fund II  (together  with  other  investor  groups  in Big V) in
December  1990  and  November  1993.   Since  the  covenants,   commitments  and
contingencies  associated  with the  Agreements  may have the effect of delaying
and/or  decreasing  the amount of future  distributions,  the  General  Partners
determined   that   further   distributions   should   not  be  made  until  any
responsibilities  of Fund II with  respect to such  covenants,  commitments  and
contingencies have been determined.

     On  November  22,  2000,   following   careful  analysis  of  its  business
operations,  finances,  and the outlook for the operating  region in which Big V
competes with other  supermarket  retailers,  Big V and other  related  entities
filed voluntary  petitions under Chapter 11 of the United States Bankruptcy Code
in the United States  Bankruptcy  Court for the District of Delaware (the "Big V
Bankruptcy"),   in  order  to  implement  a  major   financial  and  operational
restructuring  of its  business.  Fund  II  believes  that  Big  V's  management
currently  intends to put forward a  reorganization  plan that fully pays all of
Big V's creditors' claims,  including  Wakefern's,  and changes its distribution
agreement, which is currently with Wakefern.

     At  issue in the Big V  Bankruptcy  and  related  litigation,  among  other
things, are the terms under which change in the Wakefern distribution  agreement
will be effectuated and the cost of such change,  if any, to Big V. In the event
Big V is  unsuccessful  in its  reorganization  plan,  Wakefern may have certain
remedies  available  to it under the  Agreements,  including  the  potential  of
gaining control of Big V by acquiring,  among other interests,  Fund II's equity
interests  in Big V at a price to be  determined  by  investment  bankers  to be
selected by an agreed-upon procedure.

     Currently,  Fund II holds a Senior  Subordinated  Note issued by Big V with
outstanding  principal of $10.4 million, as well as 117,333 shares of BVH common
stock. The carrying value of Fund II's investments in Big V and BVH at March 31,
2001 was $14.5 million.  At the time of the Big V Bankruptcy  filing,  Big V had
failed to make the  November  15,  2000  interest  payment due Fund II under the
Senior Subordinated Note held by Fund II. Since the Big V Bankruptcy filing, the
December  15, 2000 and March 15, 2001  principal  payments  and the February 15,
2001 and March 15, 2001 interest  payments due Fund II under such note have been
stayed. As a result of the uncertainties surrounding the Big V Bankruptcy,  Fund
II stopped accruing  interest on the Senior  Subordinated  Note as of January 1,
2001.

     If the Big V Bankruptcy  proceedings  are resolved in Big V's favor and the
Wakefern  distribution  agreement is transferred with minimal cost to Big V, the
Investment  Adviser believes that the value of Fund II's debt investments should
be preserved and the value of Fund II's equity  investments may be enhanced.  On
the other hand, if the Big V Bankruptcy  proceedings are not resolved in Big V's
favor  and/or  the  costs to Big V of  transferring  the  Wakefern  distribution
agreement are  substantial,  the value of Fund II's debt and equity  investments
may be impaired, and Fund II could conceivably be exposed to losses in excess of
its original  investments  in Big V and BVH.  Currently,  neither the Investment
Adviser nor the General Partners can predict the outcome of the Big V Bankruptcy
proceedings,  including  such  proceedings  impact  on the  value of the  Senior
Subordinated  Note or the BVH equity held by Fund II, or the timing or amount of
payments,  if any,  that  might be made to Fund II  pursuant  to Big V's plan of
reorganization.  In addition,  the General Partners cannot currently predict how
the Big V Bankruptcy  may affect the timing of the ultimate  liquidation of Fund
II.

     The  General  Partners  will  continue to review  Fund II's  reserves  each
quarter in light of the  foregoing  matter,  and  distributions  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 April 2000 partial paydown of the BioLease, Inc. Note, the June 2000 partial
maturity of the Big V Note,  and the November 2000 sale of  BioTransplant,  Inc.
Common Stock,  as well as income from operations from the third quarter 1999 and
subsequent quarters.

4.   Non-Accrual of Investments

     In accordance with Fund II's Accounting  Policy,  the following  securities
have been on non-accrual status since the dates indicated:

     - Florida Orthopedics, Inc.    January 1, 1995
     - Big V Supermarkets, Inc.     January 1, 2001

5.   Payment-In-Kind Securities

     All  payment-in-kind  securities received in lieu of cash interest payments
by Fund II's portfolio  companies are recorded at face value (which approximates
accrued  interest),  unless the  Investment  Adviser  and the  Managing  General
Partner  determine that there is no reasonable  assurance of collecting the full
principal  amounts of such  securities.  In accordance  with this policy,  as of
March 31,  2001 and  December  31,  2000,  Fund II's  portfolio  of  investments
excluded   approximately   $178,000   and   $168,000,   respectively,   of  such
payment-in-kind notes received from BioLease, Inc.

6.   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 2001,  the Managing  General
Partner received no cash distributions.
<PAGE>
<TABLE>
<CAPTION>
                                                 SCHEDULE 1
                                      ML-LEE ACQUISITION FUND II, L.P.
                             SUPPLEMENTAL SCHEDULE OF UNREALIZED DEPRECIATION
                                FOR THE THREE MONTHS ENDED MARCH 31, 2001
                                           (DOLLARS IN THOUSANDS)
                                                (UNAUDITED)


                                                    Reversal of
                                                     Unrealized
                                                    Depreciation
                                                        for         Total Unrealized   Total Unrealized
                                                  the Three Months    Depreciation       Depreciation
                            Investment    Fair         Ended              as of              as of
Security                       Cost       Value    March 31, 2001   December 31, 2000   March 31, 2001
--------------------------  ----------  --------  ----------------  -----------------  ----------------
<S>                         <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*               -          -               -                 -                  -
                                                     ----------        ----------         ----------
Total Unrealized Depreciation from
  Non-Public Securities                              $        -        $   (1,877)        $   (1,877)
                                                     ==========        ==========         ==========

* Restricted Security
(a) Investment cost 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. Fund II will then have
an additional five year period to liquidate its remaining assets.

     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 14,
2001,  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,  Anchor Advanced Products,
and BioTransplant Inc. 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.

     Before consenting to the distribution of all or part of Fund II's reserves,
at the quarterly  meetings held on September 19, 2000 and February 21, 2001, the
General  Partners  reviewed  certain  contractual  covenants,   commitments  and
contingencies which may affect Fund II by virtue of its investments in Big V and
Big V Holdings Corp. ("BVH", Big V's parent company). Such potential obligations
arise from letter  agreements (the  "Agreements")  entered into by Wakefern Food
Corporation   ("Wakefern"),   Big  V  (together  with  certain  of  its  related
companies),  and Fund II  (together  with  other  investor  groups  in Big V) in
December  1990  and  November  1993.   Since  the  covenants,   commitments  and
contingencies  associated  with the  Agreements  may have the effect of delaying
and/or  decreasing  the amount of future  distributions,  the  General  Partners
determined   that   further   distributions   should   not  be  made  until  any
responsibilities  of Fund II with  respect to such  covenants,  commitments  and
contingencies have been determined.

     On  November  22,  2000,   following   careful  analysis  of  its  business
operations,  finances,  and the outlook for the operating  region in which Big V
competes with other  supermarket  retailers,  Big V and other  related  entities
filed voluntary  petitions under Chapter 11 of the United States Bankruptcy Code
in the United States  Bankruptcy  Court for the District of Delaware (the "Big V
Bankruptcy"),   in  order  to  implement  a  major   financial  and  operational
restructuring  of its  business.  Fund  II  believes  that  Big  V's  management
currently  intends to put forward a  reorganization  plan that fully pays all of
Big V's creditors' claims,  including  Wakefern's,  and changes its distribution
agreement, which is currently with Wakefern.

     At  issue in the Big V  Bankruptcy  and  related  litigation,  among  other
things, are the terms under which change in the Wakefern distribution  agreement
will be effectuated and the cost of such change,  if any, to Big V. In the event
Big V is  unsuccessful  in its  reorganization  plan,  Wakefern may have certain
remedies  available  to it under the  Agreements,  including  the  potential  of
gaining control of Big V by acquiring,  among other interests,  Fund II's equity
interests  in Big V at a price to be  determined  by  investment  bankers  to be
selected by an agree-upon procedure.

     Currently,  Fund II holds a Senior  Subordinated  Note issued by Big V with
outstanding  principal of $10.4 million, as well as 117,333 shares of BVH common
stock. The carrying value of Fund II's investments in Big V and BVH at March 31,
2001 was $14.5 million.  At the time of the Big V Bankruptcy  filing,  Big V had
failed to make the  November  15,  2000  interest  payment due Fund II under the
Senior Subordinated Note held by Fund II. Since the Big V Bankruptcy filing, the
December  15, 2000 and March 15, 2001  principal  payments  and the February 15,
2001 and March 15, 2001 interest  payments due Fund II under such note have been
stayed. As a result of the uncertainties surrounding the Big V Bankruptcy,  Fund
II stopped accruing  interest on the Senior  Subordinated  Note as of January 1,
2001.

     If the Big V Bankruptcy  proceedings  are resolved in Big V's favor and the
Wakefern  distribution  agreement is transferred with minimal cost to Big V, the
Investment  Adviser believes that the value of Fund II's debt investments should
be preserved and the value of Fund II's equity  investments may be enhanced.  On
the other hand, if the Big V Bankruptcy  proceedings are not resolved in Big V's
favor  and/or  the  costs to Big V of  transferring  the  Wakefern  distribution
agreement are  substantial,  the value of Fund II's debt and equity  investments
may be impaired, and Fund II could conceivably be exposed to losses in excess of
its original  investments  in Big V and BVH.  Currently,  neither the Investment
Adviser nor the General Partners can predict the outcome of the Big V Bankruptcy
proceedings,  including  such  proceedings  impact  on the  value of the  Senior
Subordinated  Note or the BVH equity held by Fund II, or the timing or amount of
payments,  if any,  that  might be made to Fund II  pursuant  to Big V's plan of
reorganization.  In addition,  the General Partners cannot currently predict how
the Big V Bankruptcy  may affect the timing of the ultimate  liquidation of Fund
II.

     The  General  Partners  will  continue to review  Fund II's  reserves  each
quarter in light of the  foregoing  matter,  and  distributions  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 April 2000 partial paydown of the BioLease, Inc. Note, the June 2000 partial
maturity of the Big V Note,  and the November 2000 sale of  BioTransplant,  Inc.
Common Stock,  as well as income from operations from the third quarter 1999 and
subsequent quarters.

     As of  March  31,  2001,  Fund II had  outstanding  a total  (at  cost)  of
$16,720,000 invested in Mezzanine Investments  representing  $14,537,000 Managed
and $2,183,000 Non-Managed portfolio  investments,  and Temporary Investments of
$19,381,000 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, 2001,  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 corresponding interest income previously generated by such
holdings will no longer be received by Fund II. Fund II has only three portfolio
companies  remaining,  only one of which is  income  producing;  the  amount  of
interest  income  received  by  Fund  II  from  such  portfolio  company  is not
significant.  As a result,  it is expected that any future cash available to pay
distributions  to Partners (to the extent such cash is not reserved for expenses
and  contingencies  - see  discussion  of the Big V  Bankruptcy  above)  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.

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 Fund II and
ML-Lee Acquisition Fund (Retirement Accounts) II, L.P. (collectively referred to
as 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, the impact of current ongoing  litigation as it
relates to Fund II, 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, 2001,  Fund II had net investment loss
of $48,000 as compared to net investment income of $610,000 for the three months
ended March 31, 2000.  The decrease in net  investment  income  during 2001,  as
compared to 2000,  is primarily  attributable  to a decrease in interest  income
from Mezzanine Investments and other factors, partially offset by an increase in
interest and discount income from Temporary Investments, as discussed below.

Investment Income and Expenses

     The total  investment  income from  operations  for the three  months ended
March 31, 2001 and 2000  consists  primarily  of interest  and  discount  income
earned on the investment of proceeds from Partner's  contributions  in Mezzanine
Investments  and  short-term  money market  instruments.  For 2001,  Fund II had
investment income of $306,000, as compared to $926,000 for 2000.

     The decrease in  investment  income  during 2001,  as compared to 2000,  is
primarily  attributable to a decrease in income earned on Mezzanine  Investments
as  result  of the  non-accrual  status  of Big V in  2001  and a  non-recurring
$205,000  adjustment  in  the  first  quarter  of  2000  to  correct  for a 1999
understatement  of Mezzanine  Investment  income.  This  decrease was  partially
offset by an increase in income earned on Temporary  Investments  as a result of
investing  Mezzanine  Investment sale,  paydown and maturity  proceeds  received
since August 1999, as well as on income from  operations  from the third quarter
1999 and subsequent quarters, all of which have been reserved.

     Major expenses for the three months ended March 31, 2001 and 2000 consisted
of Investment Advisory Fees, Administrative Expenses, and Legal and Professional
Fees.

     The  Investment   Adviser  and  Fund   Administrator   both  receive  their
compensation on a quarterly basis.  The total Investment  Advisory Fees incurred
by Fund II to the  Investment  Adviser for each of the three  months ended March
31, 2001 and 2000 were $166,000,  and were  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, 2001 and 2000, Fund II incurred Fund  Administration Fees
of $56,000. For the three months ended March 31, 2001 and 2000, Fund II incurred
$56,000 and $60,000, respectively, in Reimbursable Administrative Expenses.

     Legal and  professional  fees for the three months ended March 31, 2001 and
2000  were  $46,000  and  $11,000,  respectively.  The  increase  in  legal  and
professional  fees for 2001, as compared to 2000, is primarily  attributable  to
the legal fees incurred by Fund II in connection with the Big V Bankruptcy.

Net Assets

     Fund II's net assets decreased during the three months ended March 31, 2001
due to net investment loss of $48,000. Fund II's net assets increased during the
three months ended March 31, 2000 due to net investment income of $610,000.

Unrealized Appreciation and Depreciation on Investments

     Securities for which market  quotations are readily available are valued by
reference to such market  quotation  using the last trade price (if reported) or
the  last  bid  price  for  the  period.   For  securities   without  a  readily
ascertainable  market value  (including  securities  restricted as to resale for
which a corresponding  publicly traded class exists),  fair value is determined,
on a quarterly basis, in good faith by the Investment Adviser and is approved by
the Managing  General  Partner with final approval from the  Individual  General
Partners of Fund II. For privately issued  securities in which Fund II typically
invests,  the fair value of an  investment  is generally  its original cost plus
accrued value in the case of original issue discount or deferred pay securities.
Such  investments  generally 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
Investment Adviser and the General Partners 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 Investment Adviser
and the General Partners 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.
Future  confirming  events will also affect the  estimates of fair value and the
effect of such events on the estimates of fair value could be material.

     As  a  result  of  total  net  realized  and  unrealized  appreciation  and
depreciation  recorded by Fund II through March 31, 2001,  Limited Partners' net
asset value  ("NAV") was $154.23 per Unit.  Fund II's net assets as of that date
included  its  holdings  in Big V and BVH  (approximately  41.7% of net  assets,
valued at cost) and other private placement  securities  (approximately  1.0% of
net assets),  for which there are no ascertainable market values, and commercial
paper  (approximately  56.0% of net assets),  which is stated at amortized cost.
The March 31, 2001 NAV figure does not reflect any change that may  subsequently
have  occurred  in the value of Fund II's  holdings.  Moreover,  in light of the
recent Big V Bankruptcy filing, there is a high degree of uncertainty associated
with Fund II's  estimate of the value of its  investments  in Big V and BVH (see
also Liquidity and Capital Resources above).  Finally,  the Big V Bankruptcy and
related  litigation may  potentially  have an effect on other assets of Fund II.
The previously  computed NAV does not represent the Units' current market value,
and Limited  Partners may not be able to realize this value upon a sale of their
Units or ultimate liquidation of Fund II's assets.

    The  information   presented  herein  is  based  on  pertinent  information
available to the Investment Adviser and Managing General Partner as of March 31,
2001. Although the Investment Adviser and Managing General Partner 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 1.

     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 March 31, 2001,  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.
             --------------------------------
             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 11th day of
May, 2001.


                                   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 11, 2001         By:   /s/ Kevin T. Seltzer
                                   ----------------------------------
                                   Kevin T. Seltzer
                                   ML Mezzanine II, Inc.
                                   Vice President and Treasurer
                                   (Principal Financial Officer of Registrant)