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 period ended      September 30, 1997
                           -----------------------------------------------------


                                       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>
                        MCNEIL REAL ESTATE FUND XI, LTD.

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
------- --------------------
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                        September 30,       December 31,
                                                                             1997                1996
                                                                       ----------------     ----------------
ASSETS
------ 

Real estate investments:
<S>                                                                    <C>                  <C>            
   Land.....................................................           $     4,407,325      $     4,572,654
   Buildings and improvements...............................                47,002,048           50,600,784
                                                                        --------------       --------------
                                                                            51,409,373           55,173,438
   Less:  Accumulated depreciation..........................               (30,448,759)         (32,181,184)
                                                                        --------------       --------------
                                                                            20,960,614           22,992,254

Assets held for sale........................................                 5,706,270            4,203,597

Cash and cash equivalents...................................                 2,730,009            2,351,879
Cash segregated for security deposits.......................                   402,607              403,949
Accounts receivable.........................................                    38,836              204,542
Prepaid expenses and other assets...........................                   127,175              256,151
Escrow deposits.............................................                 1,131,819              662,003
Deferred borrowing costs (net of accumulated
   amortization of $637,159 and $515,702 at
   September 30, 1997 and December 31, 1996,
   respectively)............................................                 1,396,319            1,517,778
                                                                        --------------       --------------
                                                                       $    32,493,649      $    32,592,153
                                                                        ==============       ==============

LIABILITIES AND PARTNERS' DEFICIT

Mortgage notes payable, net.................................           $    36,326,333      $    36,666,074
Mortgage note payable - affiliate...........................                 2,588,971            2,588,971
Accounts payable............................................                         -               52,886
Accrued interest............................................                   272,806              272,189
Accrued interest - affiliate................................                    20,889               23,239
Accrued expenses............................................                   931,869              455,857
Deferred gain - fire damage.................................                     1,669              174,656
Payable to affiliates - General Partner.....................                 1,920,073            2,558,338
Security deposits and deferred rental revenue...............                   465,693              433,407
                                                                        --------------       --------------
                                                                            42,528,303           43,225,617
                                                                        --------------       --------------

Partners' deficit:
   Limited partners - 159,813 limited partnership units
     authorized  and outstanding at September 30, 1997
     and December 31, 1996..................................                (4,107,870)          (4,179,456)
   General Partner..........................................                (5,926,784)          (6,454,008)
                                                                        --------------       --------------
                                                                           (10,034,654)         (10,633,464)
                                                                        --------------       --------------
                                                                       $    32,493,649      $    32,592,153
                                                                        ==============       ==============
</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                      Nine Months Ended
                                               September 30,                         September 30,
                                      ---------------------------------    ---------------------------------
                                          1997               1996               1997                1996
                                      --------------    ---------------    --------------     --------------
Revenue:
<S>                                   <C>                <C>               <C>                <C>           
   Rental revenue................     $    3,816,132     $    3,728,509    $   11,329,456     $   11,057,876
   Interest......................             34,629             39,102            87,490             97,731
   Gain on involuntary
     conversion..................                  -                  -           172,987                  -
                                       -------------      -------------     -------------      -------------
     Total revenue...............          3,850,761          3,767,611        11,589,933         11,155,607
                                       -------------      -------------     -------------      -------------

Expenses:
   Interest......................            882,605            947,022         2,655,158          2,856,971
   Interest - affiliate mortgage.             62,543                  -           183,418                  -
   Depreciation..................            503,239            612,367         1,549,369          1,861,120
   Property taxes................            217,794            216,796           653,382            655,978
   Personnel expenses............            493,521            439,231         1,408,160          1,320,836
   Utilities.....................            313,379            301,626           860,057            818,198
   Repair and maintenance........            459,527            514,782         1,513,633          1,489,725
   Property management
     fees - affiliates...........            189,258            184,227           563,127            548,619
   Other property operating
     expenses....................            213,088            199,279           588,442            589,037
   General and administrative....             50,370             81,059           151,590            162,950
   General and administrative -
     affiliates..................             65,752             75,804           197,761            269,655
                                       -------------      -------------     -------------      -------------
     Total expenses..............          3,451,076          3,572,193        10,324,097         10,573,089
                                       -------------      -------------     -------------     --------------

Net income.......................     $      399,685     $      195,418    $    1,265,836    $       582,518
                                       =============      =============     =============     ==============

Net income allocable to
   limited partners..............     $      274,397     $       68,817    $       71,586    $       518,355
Net income allocable
   to General Partner............            125,288            126,601         1,194,250             64,163
                                       -------------      -------------     -------------     --------------
Net income.......................     $      399,685     $      195,418    $    1,265,836    $       582,518
                                       =============      =============     =============     ==============

Net income per limited
   partnership unit..............     $         1.72     $          .43    $          .45    $          3.24
                                       =============      =============     =============     ==============

</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 Nine Months Ended September 30, 1997 and 1996


<TABLE>
<CAPTION>

                                                                                                  Total
                                                    General                 Limited               Partners'
                                                    Partner                 Partners              Deficit
                                                 ---------------         ---------------       ---------------
<S>                                              <C>                     <C>                   <C>            
Balance at December 31, 1995..............       $   (6,339,886)         $   (4,983,492)       $  (11,323,378)

Net income................................               64,163                 518,355               582,518

Management Incentive Distribution.........             (650,861)                      -              (650,861)
                                                  -------------           -------------         -------------

Balance at September 30, 1996.............       $   (6,926,584)         $   (4,465,137)       $  (11,391,721)
                                                  =============           =============         =============


Balance at December 31, 1996..............       $   (6,454,008)         $   (4,179,456)       $  (10,633,464)

Net income................................            1,194,250                  71,586             1,265,836

Management Incentive Distribution.........             (667,026)                      -              (667,026)
                                                  -------------           -------------         -------------

Balance at September 30, 1997.............       $   (5,926,784)         $   (4,107,870)       $  (10,034,654)
                                                  =============           =============         =============
</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>
                                                                              Nine Months Ended
                                                                                September 30,
                                                                -------------------------------------------
                                                                        1997                      1996
                                                                -------------------        ----------------
Cash flows from operating activities:
<S>                                                             <C>                        <C>            
   Cash received from tenants........................           $       11,357,484         $    10,941,390
   Cash paid to suppliers............................                   (4,498,797)             (4,324,633)
   Cash paid to affiliates...........................                     (794,461)             (1,127,238)
   Interest received.................................                       87,490                  97,731
   Interest paid.....................................                   (2,515,433)             (2,756,487)
   Interest paid - affiliates........................                     (185,768)                      -
   Property taxes paid...............................                     (595,862)               (685,700)
                                                                 -----------------          --------------
Net cash provided by operating activities............                    2,854,653               2,145,063
                                                                 -----------------          --------------

Cash flow from investing activities:
   Additions to real estate investments..............                   (1,020,402)             (1,209,618)
   Insurance proceeds from fire......................                      172,987                       -
                                                                 -----------------          --------------
Net cash used in investing activities................                     (847,415)             (1,209,618)
                                                                 -----------------          --------------

Cash flows from financing activities:
   Principal payments on mortgage notes
     payable.........................................                     (357,390)               (357,164)
   Management Incentive Distribution.................                   (1,271,718)               (157,219)
                                                                 -----------------          --------------
Net cash used in financing activities................                   (1,629,108)               (514,383)
                                                                 -----------------          --------------

Net increase in cash and cash equivalents............                      378,130                 421,062

Cash and cash equivalents at beginning of
   period............................................                    2,351,879               2,030,544
                                                                 -----------------          --------------

Cash and cash equivalents at end of period...........           $        2,730,009         $     2,451,606
                                                                 =================          ==============

</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>
                                                                             Nine Months Ended
                                                                                 September 30,
                                                                  -----------------------------------------
                                                                        1997                     1996
                                                                  -----------------        ----------------
<S>                                                               <C>                      <C>            
Net income...........................................             $      1,265,836         $       582,518
                                                                   ---------------          --------------

Adjustments to reconcile net income to net cash
   provided  by  operating  activities:
   Depreciation......................................                    1,549,369               1,861,120
   Amortization of deferred borrowing costs..........                      121,459                  89,864
   Amortization of discounts on mortgage
     notes payable...................................                       17,649                  13,339
   Gain on involuntary conversion-...................                     (172,987)                      -
   Changes in assets and liabilities:
     Cash segregated for security deposits...........                        1,342                 (10,618)
     Accounts receivable.............................                       (7,281)               (232,873)
     Prepaid expenses and other assets...............                      128,976                 135,736
     Escrow deposits.................................                     (469,816)               (377,659)
     Accounts payable................................                      (52,886)                (46,090)
     Accrued interest................................                          617                  (2,719)
     Accrued property taxes..........................                      523,093                 450,228
     Accrued interest-affiliates.....................                       (2,350)                      -
     Accrued expenses................................                      (47,081)                (43,535)
     Payable to affiliates - General Partner.........                      (33,573)               (308,964)
     Security deposits and deferred rental
       revenue.......................................                       32,286                  34,716
                                                                   ---------------          --------------
       Total adjustments.............................                    1,588,817               1,562,545
                                                                   ---------------          --------------

Net cash provided by operating activities............             $      2,854,653         $     2,145,063
                                                                   ===============          ==============
</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)

                               September 30, 1997

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 nine months ended September
30, 1997 are not  necessarily  indicative  of the results to be expected for the
year ending December 31, 1997.

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,  1996,  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 The Herman Group,  2121 San Jacinto St.,
26th Floor, Dallas, TX 75201.

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 Rock Creek  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.

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

                                                             Nine Months Ended
                                                                September 30,
                                                          ----------------------
                                                             1997        1996
                                                          ---------    ---------

Property management fees - affiliates................     $ 563,127    $ 548,619
Interest - affiliates................................       183,418            -
Charged to general and administrative affiliates:
   Partnership administration........................       197,761      269,655
                                                           --------     --------
                                                          $ 944,306    $ 818,274
                                                           ========     ========

Charged to General Partner's deficit:
   MID...............................................     $ 667,026    $ 650,861
                                                           ========     ========

NOTE 4.
-------

In 1996, the  Partnership  adopted the Financial  Accounting  Standards  Board's
Statement  of  Financial  Accounting  Standards  No.  121,  "Accounting  for the
Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be Disposed Of."
This statement  requires the cessation of  depreciation on assets held for sale.
On August 1, 1997,  the  Partnership  placed The Park on the market for sale and
accordingly ceased recording depreciation charges effective August 1, 1997.







<PAGE>
NOTE 5.
-------

On January 8, 1996, 23,347 square feet of Knollwood  Apartments was destroyed by
fire causing  $856,654 in damages.  The  Partnership  has  received  $681,998 in
insurance  reimbursements  as of December 31, 1996,  to cover the cost to repair
Knollwood.  In 1997, the property  received an additional  $172,987 in insurance
reimbursements.  Insurance reimbursements received in excess of the basis of the
property  damaged  were  recorded  as a  gain  on  involuntary  conversion.  The
Partnership recorded a gain of $172,987 in 1997.

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
September 30, 1997, the Partnership owned eight apartment properties,  which are
all subject to mortgage notes.

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

Revenue:

Partnership  revenues  increased  by $83,150 and $434,326 for the three and nine
months ended  September 30, 1997,  respectively,  as compared to the same period
last year.  Rental  revenue  increased  $271,580 or 3% for the nine months ended
September 30, 1997.  Interest income  decreased by $10,241 or 11% for the period
ended September 30, 1997. The Partnership  also recognized a gain on involuntary
conversion of $172,987 as a result of a fire at Knollwood.

Rental revenue for the first nine months of 1997 was  $11,329,456 as compared to
$11,057,876  for the same  period in 1996.  The  increase  in rental  revenue is
primarily  due to an  increase  in  occupancy  rates at Acacia  Lakes along with
increases in the rental rates at Acacia Lakes,  Knollwood,  Sun Valley and Villa
Del Rio.

Expenses:

Total Partnership  expenses decreased by $121,117 and $248,992 for the three and
nine months  ended  September  30, 1997,  respectively,  as compared to the same
period  in  1996.   Decreases   in  interest,   depreciation   and  general  and
administration  - affiliates  were offset by  increases  in personnel  expenses,
utilities and repairs and maintenance.

Interest expense decreased by $201,813 or 7% for the nine months ended September
30, 1997 as compared to the same period last year.  This  decrease is due to the
payoff of The Village  mortgage  note in November  1996 and receiving a mortgage
loan from an affiliate.

Interest expense - affiliate  increase by $183,418 due to the mortgage loan from
an affiliate in November  1996 on The Village.  This loan accrues  interest at a
rate of prime plus 1% and at September 30, 1997, the interest rate was 9.5%.

<PAGE>
Depreciation  decreased by $311,751 or 17% for nine months ended  September  30,
1997 as compared to the same period in 1996. This decrease is mainly due to Rock
Creek,  which is currently  classified  as an asset held for sale,  for which no
depreciation  has been  recognized  since  October  1,  1996.  The Park was also
classified as an asset held for sale as of August 1, 1997,  and no  depreciation
has been since that date.

Personnel  expense  increased $87,324 or 7% for the first nine months of 1997 as
compared to the same  period last year.  This  increase is  primarily  due to an
increase in employee insurance.

General and  administrative  expenses decreased $11,360 or 7% for the first nine
months  of 1997  as  compared  to the  same  period  last  year.  In  1996,  the
Partnership incurred costs to evaluate and disseminate  information regarding an
unsolicited  tender  offer.  The  decrease was  partially  offset by charges for
investor  services,  which  beginning  in 1997,  are  provided  by a third party
vendor.  In 1996,  these costs were paid to an affiliate of the General  Partner
and were included in general and administrative - affiliates.

General and  administrative - affiliates expense decreased by $71,894 or 27% for
the first nine  months of 1997 as  compared  to the same period last year due to
the  reduction  of overhead  expenses  allocable to the  Partnership.  Allocated
expenses  decreased  in part due to  investor  services  being  performed  by an
unrelated third party in 1997, as discussed above.

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

The Partnership generated $2,854,653 through operating activities for the period
ending September 30, 1997 as compared to $2,145,063 for the same period in 1996.
This  increase  is due to an  increase  in  cash  received  from  tenants  and a
reduction in the cash paid to affiliates.

The Partnership  funded  $1,020,402 in additions to real estate  investments for
the nine months ending September 30, 1997. All of the  Partnership's  properties
continued capital improvement projects to enhance the value of the properties so
they can  remain  competitive  in the  market.  The  Partnership  also  received
$172,987 in insurance proceeds due to a fire at Knollwood in January 1996.

Financing  activities  included principal payments on mortgage notes of $357,390
and MID payments of $1,271,718.

Short-term liquidity:

At  September  30,  1997,  the  Partnership  held cash and cash  equivalents  of
$2,730,009.  The General  Partner  considers  this level of cash  reserves to be
adequate to meet the Partnership's  operating needs. The Partnership resumed MID
payments  during the third quarter of 1996 and will continue making MID payments
as long as the Partnership's  properties  continue to perform as projected.  The
General Partner  believes that  anticipated  operating  results for 1997 will be
sufficient  to  fund  the   Partnership's   budgeted  $1.4  million  in  capital
improvements  for 1997 and to repay the  current  portion  of the  Partnership's
mortgage notes.






<PAGE>
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.

The Partnership  has determined to begin orderly  liquidation of all its assets.
Although  there can be no assurance as to the timing of the  liquidation  due to
real estate  market  conditions,  the general  difficulty  of  disposing of real
estate,  and  other  general  economic  factors,  it is  anticipated  that  such
liquidation  would result in the  dissolution of the  Partnership  followed by a
liquidating  distribution to Unit holders by December 2001. In this regard,  the
Partnerships  has placed Rock Creek on the market for sale. The  Partnership has
also placed The Park on the market for sale as of August 1, 1997.

Income allocation and distributions:

Terms  of  the  Amended   Partnership   Agreement  specify  that  income  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  nine  months  ended
September  30,  1997  and  1996,  $1,194,250  and  $64,163,  respectively,  were
allocated to the General Partner.  The limited partners received  allocations of
$71,586 and  $518,355  for the nine months  ended  September  30, 1997 and 1996,
respectively.

With the exception of the MID,  distributions  to partners  have been  suspended
since 1986 as part of the General Partner's policy of maintaining  adequate cash
reserves.  Distributions  to the limited  partners will remain suspended for the
foreseeable  future.  The  General  Partner  will  continue  to monitor the cash
reserves and working  capital needs of the  Partnership  to determine  when cash
flows will support  distributions  to the limited  partners.  A distribution  of
$667,026  for the MID has been  accrued  by the  Partnership  for the nine month
period ending September 30, 1997 for the General Partner.

                          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).



<PAGE>
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.  Defendants intend to file a demurrer to the second  consolidated and
amended complaint on or before December 1, 1997.



<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 1997 and 1996, respectively.

         27.                        Financial   Data   Schedule  for the quarter
                                    ended September 30, 1997.

(b)      Reports  on   Form 8-K.  There were no reports on Form 8-K filed during
         the quarter ended  September 30, 1997.


<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






November 14, 1997                 By:  /s/  Ron K. Taylor
-----------------                    -------------------------------------------
Date                                   Ron K. Taylor
                                       President and Director of McNeil 
                                        Investors, Inc.
                                       (Principal Financial Officer)




November 14, 1997                 By:  /s/  Brandon K. Flaming
-----------------                    -------------------------------------------
Date                                   Brandon K. Flaming
                                       Vice President of McNeil Investors, Inc.
                                       (Principal Accounting Officer)