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


                                    FORM 10-Q



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


     For the quarterly period ended      June 30, 1998
                                   ---------------------------------------------


                                       OR

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

     For the transition period from ______________ to_____________
     Commission file number  0-9783



                        MCNEIL REAL ESTATE FUND XI, LTD.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)



         California                                      94-2669577
--------------------------------------------------------------------------------
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                           Identification No.)



              13760 Noel Road, Suite 600, LB70, Dallas, Texas 75240
--------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip code)



Registrant's telephone number, including area code     (972) 448-5800
                                                  ------------------------------




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


<PAGE>
                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
------- --------------------

                        MCNEIL REAL ESTATE FUND XI, LTD.

                                 BALANCE SHEETS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                June 30,         December 31,
                                                                  1998               1997
                                                              -------------     -------------
ASSETS
------

Real estate investments:
<S>                                                           <C>               <C>         
   Land .................................................     $  4,407,325      $  4,407,325
   Buildings and improvements ...........................       47,772,762        47,211,527
                                                              ------------      ------------
                                                                52,180,087        51,618,852
   Less:  Accumulated depreciation ......................      (31,968,496)      (30,941,665)
                                                              ------------      ------------
                                                                20,211,591        20,677,187

Assets held for sale ....................................        4,658,935         5,910,865

Cash and cash equivalents ...............................        4,106,010         3,045,785
Cash segregated for security deposits ...................          453,455           413,487
Accounts receivable .....................................          112,927            40,018
Prepaid expenses and other assets .......................           99,058           242,961
Escrow deposits .........................................          954,175           683,785
Deferred borrowing costs (net of accumulated
   amortization of $704,747 and $677,649 at
   June 30, 1998 and December 31, 1997,
   respectively) ........................................        1,198,803         1,355,831
                                                              ------------      ------------
                                                              $ 31,794,954      $ 32,369,919
                                                              ============      ============

LIABILITIES AND PARTNERS' DEFICIT
---------------------------------

Mortgage notes payable, net .............................     $ 36,034,801      $ 36,207,678
Mortgage note payable - affiliate .......................                -         2,588,971
Accrued interest ........................................          247,572           271,877
Accrued interest - affiliate ............................                -            20,889
Accrued expenses ........................................          588,503           382,446
Payable to affiliates - General Partner .................        2,724,034         2,231,389
Security deposits and deferred rental revenue ...........          459,176           460,567
                                                              ------------      ------------
                                                                40,054,086        42,163,817
                                                              ------------      ------------

Partners' deficit:
   Limited  partners - 159,813  limited partnership units
     authorized  and outstanding at June 30, 1998
     and December 31, 1997 ..............................       (1,811,577)       (3,602,274)
   General Partner ......................................       (6,447,555)       (6,191,624)
                                                              ------------      ------------
                                                                (8,259,132)       (9,793,898)
                                                              ------------      ------------
                                                              $ 31,794,954      $ 32,369,919
                                                              ============      ============
</TABLE>

The  financial  information  included  herein has been  prepared  by  management
without audit by independent public accountants.

                 See accompanying notes to financial statements.
<PAGE>
                        MCNEIL REAL ESTATE FUND XI, LTD.

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                           Three Months Ended                Six Months Ended
                                                June 30,                          June 30,
                                        ---------------------------     ---------------------------
                                            1998            1997            1998            1997
                                        -----------     -----------     -----------     -----------

Revenue:
<S>                                     <C>             <C>             <C>             <C>        
   Rent revenue ...................     $ 3,692,186     $ 3,763,175     $ 7,582,411     $ 7,513,324
   Interest .......................          46,357          26,967          96,122          52,861
   Gain on sale of real estate ....       3,319,137               -       3,319,137               -
   Gain on involuntary
     conversion ...................               -         172,987               -         172,987
                                        -----------     -----------     -----------     -----------
     Total revenue ................       7,057,680       3,963,129      10,997,670       7,739,172
                                        -----------     -----------     -----------     -----------

Expenses:
   Interest .......................         836,384         885,338       1,708,089       1,772,553
   Interest - affiliate mortgage...          39,318          61,444          99,964         120,875
   Depreciation ...................         517,436         523,065       1,026,831       1,046,130
   Property taxes .................         226,420         217,794         457,603         435,588
   Personnel expenses .............         456,974         418,305         946,396         914,639
   Utilities ......................         278,184         269,997         547,775         546,678
   Repair and maintenance .........         500,605         550,002         926,316       1,054,106
   Property management
     fees - affiliates ............         183,376         187,546         376,829         373,869
   Other property operating
     expenses .....................         182,667         172,256         395,026         375,354
   General and administrative .....         202,065          44,538         348,077         101,220
   General and administrative -
     affiliates ...................          93,793          66,130         174,542         132,009
                                        -----------     -----------     -----------     -----------
     Total expenses ...............       3,517,222       3,396,415       7,007,448       6,873,021
                                        -----------     -----------     -----------     -----------

Net income ........................     $ 3,540,458     $   566,714     $ 3,990,222     $   866,151
                                        ===========     ===========     ===========     ===========

Net income (loss) allocable to
   limited partners ...............     $ 3,363,435     $   442,417     $ 3,790,711     $  (132,442)
Net income allocable
   to General Partner .............         177,023         124,297         199,511         998,593
                                        -----------     -----------     -----------     -----------
Net income ........................     $ 3,540,458     $   566,714     $ 3,990,222     $   866,151
                                        ===========     ===========     ===========     ===========

Net income (loss) per limited
   partnership unit ...............     $     21.05     $      2.77     $     23.72     $      (.83)
                                        ===========     ===========     ===========     ===========

Distribution per limited
   partnership unit ...............     $         -     $         -     $     12.51     $         -
                                        ===========     ===========     ===========     ===========
</TABLE>


The  financial  information  included  herein has been  prepared  by  management
without audit by independent public accountants.

                 See accompanying notes to financial statements.
<PAGE>
                        MCNEIL REAL ESTATE FUND XI, LTD.

                         STATEMENTS OF PARTNERS' DEFICIT
                                   (Unaudited)

                 For the Six Months Ended June 30, 1998 and 1997

<TABLE>
<CAPTION>
                                                                              Total
                                         General          Limited           Partners'
                                         Partner          Partners           Deficit
                                      -------------     -------------     -------------
<S>                                   <C>               <C>               <C>          
Balance at December 31, 1996 ....     $ (6,454,008)     $ (4,179,456)     $(10,633,464)

Net income (loss) ...............          998,593          (132,442)          866,151

Management Incentive Distribution         (441,640)                -          (441,640)
                                      ------------      ------------      ------------

Balance at June 30, 1997 ........     $(5,897,055)      $ (4,311,898)     $(10,208,953)
                                      ============      ============      ============


Balance at December 31, 1997 ....     $(6,191,624)      $ (3,602,274)     $ (9,793,898)

Net income ......................          199,511         3,790,711         3,990,222

Management Incentive Distribution         (455,442)                -          (455,442)

Distributions to limited partners                -        (2,000,014)       (2,000,014)
                                      ------------      ------------      ------------

Balance at June 30, 1998 ........     $(6,447,555)      $ (1,811,577)     $ (8,259,132)
                                      ============      ============      ============

</TABLE>




The  financial  information  included  herein has been  prepared  by  management
without audit by independent public accountants.

                 See accompanying notes to financial statements.
<PAGE>
                        MCNEIL REAL ESTATE FUND XI, LTD.

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                Increase (Decrease) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
                                                            Six Months Ended
                                                                June 30,
                                                       ---------------------------
                                                          1998           1997
                                                       ------------   ------------
Cash flows from operating activities:
<S>                                                  <C>            <C>        
   Cash received from tenants ......................   $ 7,477,862    $ 7,484,507
   Cash paid to suppliers ..........................    (2,979,370)    (2,968,518)
   Cash paid to affiliates .........................      (514,168)      (539,730)
   Interest received ...............................        96,122         52,861
   Interest paid ...................................    (1,633,619)    (1,678,278)
   Interest paid - affiliates ......................      (120,853)      (123,899)
   Property taxes paid .............................      (560,097)      (513,947)
                                                       -----------    -----------
Net cash provided by operating activities ..........     1,765,877      1,712,996
                                                       -----------    -----------

Cash flow from investing activities:
   Additions to real estate investments ............      (561,235)      (436,979)
   Additions to assets held for sale ...............       (97,399)             -
   Proceeds from sale of real estate ...............     4,787,389              -
   Insurance proceeds from fire ....................             -        172,987
                                                       -----------    -----------
Net cash provided by (used in)
   investing activities ............................     4,128,755       (263,992)
                                                       -----------    -----------

Cash flows from financing activities:
   Principal payments on mortgage notes
     payable .......................................      (254,380)      (235,597)
   Proceeds from mortgage note payable .............     2,635,000              -
   Repayment of mortgage note payable - affiliate...    (2,588,971)             -
   Retirement of mortgage note payable .............    (2,565,604)             -
   Deferred borrowing costs paid ...................       (60,438)             -
   Management Incentive Distribution ...............             -     (1,050,900)
   Distributions to limited partners ...............    (2,000,014)             -
                                                       -----------    -----------
Net cash used in financing activities ..............    (4,834,407)    (1,286,497)
                                                       -----------    -----------

Net increase in cash and cash equivalents ..........     1,060,225        162,507

Cash and cash equivalents at beginning of
   period ..........................................     3,045,785      2,351,879
                                                       -----------    -----------

Cash and cash equivalents at end of period .........   $ 4,106,010    $ 2,514,386
                                                       ===========    ===========
</TABLE>


The  financial  information  included  herein has been  prepared  by  management
without audit by independent public accountants.

                 See accompanying notes to financial statements.
<PAGE>
                        MCNEIL REAL ESTATE FUND XI, LTD.

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

              Reconciliation of Net Income to Net Cash Provided by
                              Operating Activities

<TABLE>
<CAPTION>
                                                               Six Months Ended
                                                                  June 30,
                                                       -------------------------------
                                                          1998                 1997
                                                       -----------         -----------
<S>                                                    <C>                 <C>        
Net income ....................................        $ 3,990,222         $   866,151
                                                       -----------         -----------

Adjustments to reconcile net income to net cash
   provided  by  operating activities:
   Depreciation ...............................          1,026,831           1,046,130
   Amortization of deferred borrowing costs ...             86,668              80,973
   Amortization of discounts on mortgage
     notes payable ............................             12,107              11,766
   Gain on sale of real estate ................         (3,319,137)                  -
   Gain on involuntary conversion .............                  -            (172,987)
   Changes in assets and liabilities:
     Cash segregated for security deposits ....            (39,968)            (27,008)
     Accounts receivable ......................            (72,909)            (32,493)
     Prepaid expenses and other assets ........            143,903             135,182
     Escrow deposits ..........................           (270,390)           (344,110)
     Accounts payable .........................                  -             (37,907)
     Accrued interest .........................            (24,305)              1,536
     Accrued interest-affiliates ..............            (20,889)             (3,024)
     Accrued expenses .........................            217,932             204,321
     Payable to affiliates - General Partner ..             37,203             (33,852)
     Security deposits and deferred rental
       revenue ................................             (1,391)             18,318
                                                       -----------         -----------
       Total adjustments ......................         (2,224,345)            846,845
                                                       -----------         -----------

Net cash provided by operating activities .....        $ 1,765,877         $ 1,712,996
                                                       ===========         ===========

</TABLE>



The  financial  information  included  herein has been  prepared  by  management
without audit by independent public accountants.

                 See accompanying notes to financial statements.
<PAGE>
                        McNEIL REAL ESTATE FUND XI, LTD.

                          Notes to Financial Statements
                                   (Unaudited)

                                  June 30, 1998

NOTE 1.
-------

McNeil Real Estate Fund XI, Ltd. (the  "Partnership") was organized June 2, 1980
as a limited  partnership under the provisions of the California Uniform Limited
Partnership Act. The general partner of the Partnership is McNeil Partners, L.P.
(the "General Partner"), a Delaware limited partnership,  an affiliate of Robert
A.  McNeil.  The  Partnership  is governed by an amended  and  restated  limited
partnership   agreement,   dated  August  6,  1991  (the  "Amended   Partnership
Agreement").  The principal  place of business for the  Partnership  and for the
General Partner is 13760 Noel Road, Suite 600, LB70, Dallas, Texas 75240.

In the opinion of management,  the financial  statements reflect all adjustments
necessary  for a fair  presentation  of the  financial  position  and results of
operations  of the  Partnership.  All  adjustments  were of a  normal  recurring
nature.  However,  the results of  operations  for the six months ended June 30,
1998 are not  necessarily  indicative of the results to be expected for the year
ending December 31, 1998.

NOTE 2.
-------

The  financial  statements  should  be read in  conjunction  with the  financial
statements  contained in the  Partnership's  Annual  Report on Form 10-K for the
year  ended  December  31,  1997,  and the  notes  thereto,  as  filed  with the
Securities and Exchange  Commission,  which is available upon request by writing
to McNeil Real Estate Fund XI, Ltd.,  c/o McNeil Real Estate  Management,  Inc.,
Investor Services, 13760 Noel Road, Suite 600, LB70, Dallas, Texas 75240.

NOTE 3.
-------

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

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

Under terms of the Amended  Partnership  Agreement,  the Partnership is paying a
Management  Incentive  Distribution  ("MID") to the General Partner. The maximum
MID is  calculated  as 1% of the tangible  asset value of the  Partnership.  The
maximum MID  percentage  decreases  subsequent to 1999.  Tangible asset value is
determined  by using the  greater  of (i) an amount  calculated  by  applying  a
capitalization  rate  of 9% to the  annualized  net  operating  income  of  each
property or (ii) a value of $10,000 per apartment unit to arrive at the property
tangible  asset value.  The property  tangible  asset value is then added to the
book value of all other assets excluding intangible items.



<PAGE>
MID will be paid to the extent of the lesser of the  Partnership's  excess  cash
flow,  as  defined,  or net  operating  income,  as  defined  ("the  Entitlement
Amount"),  and may be paid (i) in cash, unless there is insufficient cash to pay
the  distribution  in which  event  any  unpaid  portion  not  taken in  limited
partnership  units ("Units") will be deferred and is payable,  without interest,
from the first  available cash and/or (ii) in Units. A maximum of 50% of the MID
may be paid in Units.  The number of Units issued in payment of the MID is based
on the greater of $50 per Unit or the net tangible asset value, as defined,  per
Unit.

Any  amount  of the MID that is paid to the  General  Partner  in Units  will be
treated as if cash is distributed to the General Partner and is then contributed
to the Partnership by the General Partner. The MID represents a return of equity
to the General Partner for increasing cash flow, as defined,  and accordingly is
treated as a distribution.

In November 1996, the  Partnership  obtained a loan from McNeil Real Estate Fund
XXVII,  L.P., an affiliate of the General Partner,  for $2,588,971.  The note is
secured by The Village  Apartments and requires monthly  interest-only  payments
equal to the prime  lending rate of Bank of America  plus 1% with the  principal
balance due November 25, 1999. This mortgage note was paid off on May 13, 1998.

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

                                                             Six Months Ended
                                                                June 30,
                                                         -----------------------
                                                           1998            1997
                                                         --------        -------

Property management fees - affiliates ...........        $376,829       $373,869
Interest - affiliates ...........................          99,964        120,875
Charged to general and administrative affiliates:
   Partnership administration ...................         174,542        132,009
                                                         --------       --------
                                                         $651,335       $626,753
                                                         ========       ========

Charged to General Partner's deficit:
   MID ..........................................        $455,442       $441,640
                                                         ========       ========


<PAGE>
NOTE 4.
-------

On  April  30,  1998,  the  Partnership  sold  to  Park  Associates,   L.P.,  an
unaffiliated buyer, The Park, a 192 unit apartment complex in Joplin,  Missouri,
for a cash purchase price of $4,900,000.  Net cash proceeds to the  Partnership,
after payoff of the first mortgage note and various  closing costs,  amounted to
approximately  $2,161,000.  Cash proceeds from this transaction,  as well as the
gain on sale are detailed below.

<TABLE>
<CAPTION>
                                                                     Gain on Sale            Cash Proceeds
                                                                   ----------------          -------------
       <S>                                                         <C>                       <C>          
       Cash sales price.....................................       $     4,900,000           $   4,900,000

       Selling costs........................................              (112,611)               (112,611)
       Basis of real estate sold............................            (1,337,454)
       Basis of deferred borrowing costs
         written off......................................                (130,798)                      
                                                                   ---------------           -------------


       Gain on sale of real estate..........................       $     3,319,137
                                                                    ==============           

       Proceeds from sale of real estate....................                                     4,787,389
       Retirement of mortgage note payable..................                                    (2,565,604)
                                                                                             -------------

       Net cash proceeds....................................                                 $   2,221,785
                                                                                             =============
</TABLE>

NOTE 5.
-------

On April 27, 1998, the Partnership refinanced The Village mortgage note. The new
mortgage  note,  in the amount of $2,635,000  bears  interest at a variable rate
equal to  1.75%  plus the  London  Interbank  Offered  Rate per  annum.  The new
mortgage note requires monthly  interest-only  payments and quarterly  principal
payments in an amount  necessary to reduce the principal  balance of the note by
5% annually.  The maturity  date of the new mortgage  note is May 1, 2001.  Cash
proceeds from the refinancing transaction are as follows:

       New mortgage note proceeds...........................      $2,635,000
       Amount required to payoff existing debt..............       2,588,971
                                                                  ----------

       Cash proceeds from refinancing.......................      $   46,029
                                                                  ==========

The  Partnership  incurred  $60,438 of deferred  borrowing  costs related to the
refinancing of The Village mortgage note.




<PAGE>
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
-------   ---------------------------------------------------------------
          RESULTS OF OPERATIONS
          ---------------------

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

The Partnership is engaged in real estate  activities,  including the ownership,
operation and management of residential and other real estate related assets. At
June 30, 1998, the Partnership owned seven apartment  properties,  which are all
subject to mortgage notes.

The Partnership  recorded a $3,449,935 gain on the sale of The Park  Apartments.
Net  proceeds  from the sale,  after  repayment  of the related  mortgage  note,
amounted  to  $2,221,785.  The net  proceeds  from  the sale  were  added to the
Partnership's balance of cash reserves.

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

Revenue:

Partnership  revenues  increased  $3,049,551 and $3,431,485 for the three months
and six months  ended June 30,  1998 as  compared  to the same period last year.
Excluding the effects of the sale of The Park Apartments,  Partnership  revenues
increased  $234,988 or 3% for the six months ended June 30,  1998.  Greater cash
reserves led to an increase of $43,261 in interest income.

Rental  revenues   increased  at  six  of  the  Partnership's   seven  remaining
properties.  The  properties  reporting the largest  increases in rental revenue
were  Acacia  Lakes,  Rock Creek and The  Village.  This  increase in revenue on
Acacia  Lakes,  Rock Creek and The  Village is due to an  increase in the rental
rates,  as compared to the prior year.  The Village also recorded an increase in
the occupancy rate from 93% at June 30, 1997 to 98% at June 30, 1998.

Expenses:

Partnership  expenses  increased  $120,807 and $134,427 for the three months and
six  months  ended  June 30,  1998 as  compared  to the same  period  last year.
Excluding the effects of the sale of The Park Apartments,  Partnership  expenses
increased $314,004 or 5% for the six months ended June 30, 1998.

Decreases  in  interest  expense -  affiliates,  depreciation,  and  repairs and
maintenance  were offset by  increases  in property  taxes,  property  operating
expenses and general and administrative.

General and administrative expenses increased $246,857 or 244% for the first six
months of 1998 as compared to the same period last year. The increase was mainly
due to costs  incurred  to explore  alternatives  to  maximize  the value of the
Partnership  (see Liquidity and Capital  Resources).  The increase was partially
offset by decreases attributable to investor services.  During 1997, charges for
investor  services were provided by a third party vendor.  Beginning  with 1998,
these services are provided by affiliates of the General Partner.

General and  administrative - affiliates expense increased by $42,533 or 32% for
the first six months of 1998 as compared to the same period last year due to the
change in investor services charges as discussed above.

<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

The Partnership generated $1,765,877 through operating activities for the period
ending June 30, 1998 as compared to $1,712,996 for the same period in 1997. This
increase is primarily due to an increase in interest received.

The Partnership  expended $658,634 and $436,979 for capital  improvements to its
properties  in the  first  six  months  of  1998  and  1997,  respectively.  The
Partnership  also received  proceeds of  $4,787,389  for the sale of The Park in
April 1998.

Total  principal  payments on mortgage  notes  payable were $254,380 for the six
months  ended June 30, 1998 as compared to $235,597 for the same period in 1997.
The Partnership used $2,565,604 of the proceeds from The Park sale to retire the
related mortgage note payable.

On April 27, 1998, the  Partnership  refinanced the mortgage note payable on The
Village.  The new mortgage note, in the amount of $2,635,000 bears interest at a
variable rate equal to 1.75% plus the London  Interbank  Offered Rate per annum.
The new mortgage  note  requires  monthly  interest  only payments and quarterly
principal  payments in the amount  necessary to reduce the principal  balance of
the note by 5% annually.  The maturity  date of the new mortgage  note is May 1,
2001. The Partnership  realized  $46,029 of cash proceeds from the  transaction;
however,  $60,438  of the cash  proceeds  and cash  reserves  were  used to fund
various deferred borrowing costs related to the transaction.

The Partnership  used its cash flow from operations as well as its cash reserves
to distribute $2,000,014 to the limited partners in March 1998. The distribution
amounted to $12.51 per limited partnership unit.

Short-term liquidity:

At June 30, 1998, the Partnership  held cash and cash equivalents of $4,106,010.
The General Partner considers this level of cash reserves to be adequate to meet
the Partnership's operating needs. The General Partner believes that anticipated
operating results for 1998 will be sufficient to fund the Partnership's budgeted
$1.3 million in capital  improvements  for 1998 and to repay the current portion
of the Partnership's mortgage notes.

Long-term liquidity:

For the long-term,  property operations will remain the primary source of funds.
In this regard,  the General Partner expects that the capital  improvements made
by the  Partnership  during the past will yield improved cash flow from property
operations in the future. If the Partnership's cash position  deteriorates,  the
General Partner may elect to defer certain of the capital  improvements,  except
where  such  improvements  are  expected  to  increase  the  competitiveness  or
marketability of the Partnership's properties.


<PAGE>
As   previously   announced,    the   Partnership   has   retained   PaineWebber
("PaineWebber"),  Incorporated  as its  exclusive  financial  advisor to explore
alternatives  to  maximize  the  value  of the  Partnership  including,  without
limitation,  a  transaction  in  which  limited  partnership  interests  in  the
Partnership are converted into cash. The Partnership,  through PaineWebber,  has
provided  financial and other information to interested parties and is currently
conducting  discussions  with one such party in an attempt to reach a definitive
agreement  with respect to a sale  transaction.  It is possible that the General
Partner  and its  affiliates  will  receive  non-cash  consideration  for  their
ownership  interests in connection  with any such  transaction.  There can be no
assurance that any such agreement will be reached nor the terms thereof.

Income/Loss Allocation and Distributions:

Terms of the Amended  Partnership  Agreement  specify  that  income/loss  before
depreciation  is allocated  to the General  Partner to the extent of MID paid in
cash. Depreciation is allocated in the ratio of 95:5 to the limited partners and
the General Partner, respectively.  Therefore, for the six months ended June 30,
1998 and 1997,  $199,511  and  $998,593,  respectively,  were  allocated  to the
General Partner.  The limited partners received net income (loss) allocations of
$3,790,711  and  $(132,442)  for the six months  ended  June 30,  1998 and 1997,
respectively.

The Partnership distributed $2,000,014 to the limited partners in March 1998. In
light of the  discussions  relating to the sale  transaction  as disclosed,  the
Partnership  is presently  deferring  any decision with respect to the amount or
timing of distributions to limited partners.  A distribution of $455,442 for the
MID has been accrued by the Partnership for the six month period ending June 30,
1998 for the General Partner.

Forward-Looking Information:

Within this document,  certain  statements are made as to the expected occupancy
trends,  financial  condition,  results  of  operations,  and cash  flows of the
Partnership  for  periods  after  June 30,  1998.  All of these  statements  are
forward-looking  statements  made pursuant to the safe harbor  provisions of the
Private  Securities  Litigation  Reform Act of 1995.  These  statements  are not
historical  and  involve  risks  and  uncertainties.  The  Partnership's  actual
occupancy trends, financial condition, results of operations, and cash flows for
future  periods may differ  materially  due to several  factors.  These  factors
include,  but are not limited to, the  Partnership's  ability to control  costs,
make necessary  capital  improvements,  negotiate  sales or  refinancings of its
properties, and respond to changing economic and competitive factors.


<PAGE>
Other Information:

Management  has begun to review its  information  technology  infrastructure  to
identify any systems that could be affected by the year 2000  problem.  The year
2000 problem is the result of computer  programs  being written using two digits
rather  than  four to  define  the  applicable  year.  Any  programs  that  have
time-sensitive  software may recognize a date using "00" as the year 1900 rather
than  the  year  2000.   This  could   result  in  major   systems   failure  or
miscalculations.  The information  systems used by the Partnership for financial
reporting and  significant  accounting  functions  were made year 2000 compliant
during  recent  systems  conversions.  The  Partnership  is in  the  process  of
evaluating the computer systems at the various properties.  The Partnership also
intends to communicate  with  suppliers,  financial  institutions  and others to
coordinate  year 2000 issues.  Management  believes that the  remediation of any
outstanding  year 2000  conversion  issues  will not have a material  or adverse
effect on the Partnership's operations.




<PAGE>
                          PART II. - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
-------  -----------------

James F.  Schofield,  Gerald C. Gillett,  Donna S. Gillett,  Jeffrey  Homburger,
Elizabeth Jung,  Robert Lewis, and Warren Heller et al. v. McNeil Partners L.P.,
McNeil Investors,  Inc., McNeil Real Estate Management,  Inc., Robert A. McNeil,
Carole J. McNeil,  McNeil Pacific  Investors Fund 1972, Ltd., McNeil Real Estate
Fund IX,  Ltd.,  McNeil Real  Estate  Fund X, Ltd.,  McNeil Real Estate Fund XI,
Ltd.,  McNeil  Real Estate Fund XII,  Ltd.,  McNeil Real Estate Fund XIV,  Ltd.,
McNeil Real Estate Fund XV, Ltd.,  McNeil Real Estate Fund XX, L.P., McNeil Real
Estate Fund XXI, L.P.,  McNeil Real Estate Fund XXII,  L.P.,  McNeil Real Estate
Fund XXIV,  L.P.,  McNeil Real Estate  Fund XXV,  L.P.,  McNeil Real Estate Fund
XXVI, L.P., and McNeil Real Estate Fund XXVII,  L.P., et al. - Superior Court of
the State of California for the County of Los Angeles,  Case No. BC133799 (Class
and Derivative Action Complaint).

The action involves  purported  class and derivative  actions brought by limited
partners of each of the fourteen limited partnerships that were named as nominal
defendants as listed above (the  "Partnerships").  Plaintiffs allege that McNeil
Investors, Inc., its affiliate McNeil Real Estate Management,  Inc. and three of
their senior officers and/or directors (collectively, the "Defendants") breached
their  fiduciary  duties and certain  obligations  under the respective  Amended
Partnership  Agreement.  Plaintiffs  allege that  Defendants  have rendered such
Units highly illiquid and  artificially  depressed the prices that are available
for Units on the resale market.  Plaintiffs also allege that Defendants  engaged
in a course of conduct to prevent the  acquisition  of Units by an  affiliate of
Carl  Icahn  by  disseminating  purportedly  false,  misleading  and  inadequate
information.  Plaintiffs  further allege that Defendants  acted to advance their
own personal  interests at the expense of the Partnerships'  public unit holders
by failing to sell Partnership  properties and failing to make  distributions to
unitholders.

On December 16, 1996, the Plaintiffs filed a consolidated and amended complaint.
Plaintiffs  are suing for breach of  fiduciary  duty,  breach of contract and an
accounting,  alleging,  among other things, that the management fees paid to the
McNeil affiliates over the last six years are excessive,  that these fees should
be reduced retroactively and that the respective Amended Partnership  Agreements
governing the Partnerships are invalid.

Defendants  filed a demurrer to the  consolidated  and amended  complaint  and a
motion to strike on February 14, 1997,  seeking to dismiss the  consolidated and
amended complaint in all respects.  A hearing on Defendant's demurrer and motion
to strike  was held on May 5,  1997.  The Court  granted  Defendants'  demurrer,
dismissing  the  consolidated  and  amended  complaint  with leave to amend.  On
October  31,  1997,  the  Plaintiffs  filed a second  consolidated  and  amended
complaint.  The case has  been  stayed  pending  settlement  discussions.  While
actively working toward a final resolution, there can be no assurances regarding
settlement.

<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
-------  --------------------------------

(a)      Exhibits.

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

         4.                         Amended  and  Restated  Limited  Partnership
                                    Agreement   dated  as  of  August  6,  1991.
                                    (Incorporated  by reference to the Quarterly
                                    Report on Form 10-Q,  for the quarter  ended
                                    June 30, 1991).

         11.                        Statement regarding  computation of net loss
                                    per limited  partnership  unit: Net loss per
                                    limited  partnership  unit  is  computed  by
                                    dividing  net loss  allocated to the limited
                                    partners    by   the   number   of   limited
                                    partnership  units  outstanding.   Per  unit
                                    information   has  been  computed  based  on
                                    159,813    limited     partnership     units
                                    outstanding in 1998 and 1997, respectively.

         27.                        Financial   Data   Schedule  for the quarter
                                    ended June 30, 1998.

(b)      Reports  on  Form  8-K.  There were no reports on Form 8-K filed during
         the quarter ended June 30, 1998.



<PAGE>


                        McNEIL REAL ESTATE FUND XI, LTD.

                                   SIGNATURES

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



                               McNEIL REAL ESTATE FUND XI, Ltd.

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

                                    By: McNeil Investors, Inc., General Partner






August 14, 1998                     By: /s/  Ron K. Taylor
---------------                        -----------------------------------------
Date                                    Ron K. Taylor
                                        President and Director of McNeil 
                                         Investors, Inc.
                                        (Principal Financial Officer)




August 14, 1998                     By: /s/  Brandon K. Flaming
---------------                        -----------------------------------------
Date                                    Brandon K. Flaming
                                        Vice President of McNeil Investors, Inc.
                                        (Principal Accounting Officer)