FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
                     THE SECURITIES EXCHANGE ACT OF 1934
                        Quarterly or Transitional Report



                   U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB

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

              For the quarterly period ended September 30, 2001

[ ]   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 0-10256


                              SHELTER PROPERTIES II
      (Exact name of small business issuer as specified in its charter)



         South Carolina                                          57-0709233
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                       55 Beattie Place, P.O. Box 1089
                       Greenville, South Carolina 29602
                   (Address of principal executive offices)

                                 (864) 239-1000
                           (Issuer's telephone number)


Check  whether the issuer (1) 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>



                         PART I - FINANCIAL INFORMATION



ITEM 1.     FINANCIAL STATEMENTS


a)

                              SHELTER PROPERTIES II
                                  BALANCE SHEET
                                   (Unaudited)
                       (in thousands, except unit data)

                               September 30, 2001

<TABLE>
<CAPTION>

Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $   160
   Receivables and deposits                                                    8,486
   Restricted escrows                                                             25
   Other assets                                                                  665
   Investment properties:
      Land                                                    $ 1,814
      Buildings and related personal property                   24,286
                                                                26,100
      Less accumulated depreciation                            (18,140)        7,960

                                                                            $ 17,296
Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                         $ 3,248
   Tenant security deposit liabilities                                           116
   Accrued property taxes                                                        359
   Other liabilities                                                             407
   Due to affiliate                                                            3,527
   Mortgage notes payable                                                     19,429

Partners' Deficit
   General partners                                            $ (147)
   Limited partners (27,500 units issued and
      outstanding)                                              (9,643)       (9,790)

                                                                            $ 17,296

                See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

b)

                              SHELTER PROPERTIES II
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)
                     (in thousands, except per unit data)
<TABLE>
<CAPTION>

                                      Three Months Ended          Nine Months Ended
                                         September 30,              September 30,
                                       2001          2000         2001         2000
Revenues:
<S>                                  <C>           <C>           <C>          <C>
   Rental income                     $ 1,619       $ 1,559       $ 4,683      $ 4,567
   Other income                           80            93           302          248
       Total revenues                  1,699         1,652         4,985        4,815

Expenses:
   Operating                             532           706         1,878        1,984
   General and administrative             65           106           197          226
   Depreciation                          171           222           693          780
   Interest                              288           181         1,011          533
   Property taxes                         64           113           293          334
       Total expenses                  1,120         1,328         4,072        3,857

Net income                            $ 579         $ 324         $ 913        $ 958

Net income allocated to
   general partners (1%)               $ 6           $ 3           $ 9         $ 10
Net income allocated to
   limited partners (99%)                573           321           904          948

                                      $ 579         $ 324         $ 913        $ 958
Net income per limited
   partnership unit                  $ 20.84       $ 11.67       $ 32.87      $ 34.47

Distributions per limited
    partnership unit                   $ --          $ --        $ 71.20      $ 40.87

                See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>


c)

                              SHELTER PROPERTIES II
                  STATEMENT OF CHANGES IN PARTNERS' DEFICIT
                                   (Unaudited)
                       (in thousands, except unit data)

<TABLE>
<CAPTION>
                                       Limited
                                     Partnership     General      Limited
                                        Units        Partners    Partners      Total

<S>                                    <C>             <C>       <C>         <C>
Original capital contributions         27,500          $ 2       $ 27,500    $ 27,502

Partners' deficit at
   December 31, 2000                   27,500         $ (136)    $ (8,589)   $ (8,725)

Distributions to partners                  --            (20)      (1,958)     (1,978)

Net income for the nine months
   ended September 30, 2001                --              9          904         913

Partners' deficit at
   September 30, 2001                  27,500         $ (147)    $ (9,643)   $ (9,790)

                See Accompanying Notes to Financial Statements
</TABLE>

<PAGE>
d)
                              SHELTER PROPERTIES II
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                (in thousands)
<TABLE>
<CAPTION>

                                                                 Nine Months Ended
                                                                   September 30,
                                                                  2001        2000
Cash flows from operating activities:
<S>                                                              <C>          <C>
   Net income                                                    $ 913        $ 958
   Adjustments to reconcile net income to net
     cash provided by operating activities:
      Depreciation                                                  693          780
      Amortization of discounts and loan costs                       20           88
      Change in accounts:
        Receivables and deposits                                 (4,722)         189
        Other assets                                                (41)         (28)
        Accounts payable                                            340          (71)
        Tenant security deposit liabilities                         (16)         (57)
        Accrued property taxes                                      112          187
        Due to affiliate                                             14           --
        Other liabilities                                            75         (186)

            Net cash (used in) provided by operating
              activities                                         (2,612)       1,860

Cash flows from investing activities:
   Property improvements and replacements                        (1,118)        (454)
   Net insurance proceeds                                           884           --
   Net withdrawals from (deposits to) restricted escrows            883         (511)

            Net cash provided by (used in) investing
              activities                                            649         (965)

Cash flows from financing activities:
   Payments on mortgage notes payable                              (301)        (238)
   Draws on due to affiliate                                      3,513           --
   Loan cost paid                                                   (60)          --
   Distributions to partners                                     (1,978)      (1,135)

            Net cash provided by (used in) financing
              activities                                          1,174       (1,373)

Net decrease in cash and cash equivalents                          (789)        (478)

Cash and cash equivalents at beginning of period                    949        1,327

Cash and cash equivalents at end of period                       $ 160        $ 849

Supplemental disclosure of cash flow information:
   Cash paid for interest                                        $ 943        $ 470

                See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>
e)

                              SHELTER PROPERTIES II
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


Note A - Basis of Presentation

The accompanying  unaudited  financial  statements of Shelter Properties II (the
"Partnership" or  "Registrant")  have been prepared in accordance with generally
accepted  accounting  principles for interim financial  information and with the
instructions  to Form 10-QSB and Item 310 (b) of  Regulation  S-B.  Accordingly,
they do not include all of the information  and footnotes  required by generally
accepted accounting principles for complete financial statements. In the opinion
of  Shelter  Realty  II  Corporation  (the  "Corporate  General  Partner"),  all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation  have been included.  Operating results for the three and nine
month periods ended  September 30, 2001, are not  necessarily  indicative of the
results that may be expected for the fiscal year ending  December 31, 2001.  For
further  information,  refer to the financial  statements and footnotes  thereto
included in the  Partnership's  Annual  Report on Form 10-KSB for the year ended
December 31, 2000.  The Corporate  General  Partner is a subsidiary of Apartment
Investment and Management Company ("AIMCO").  The non-corporate general partner,
AIMCO Properties, L.P., is also an affiliate of AIMCO.

Note B - Reconciliation of Cash Flows

As required by the Partnership  Agreement,  the following is a reconciliation of
"Net cash provided by operating  activities" in the  accompanying  statements of
cash  flows  to "Net  cash  from  operations",  as  defined  in the  Partnership
Agreement.  However,  "Net cash from  operations"  should not be  considered  an
alternative  to  net  income  as an  indicator  of the  Partnership's  operating
performance or to cash flows as a measure of liquidity.

                                                           Nine Months Ended
                                                              September 30,
                                                          2001            2000
                                                             (in thousands)
     Net cash (used in) provided by operating
       activities                                        $(2,612)       $ 1,860
        Payments on mortgage notes payable                  (301)          (238)
        Property improvements and replacements            (1,118)          (454)
        Change in restricted escrows, net                    883           (511)
        Changes in reserves for net operating
           liabilities                                     4,238            (34)
        Additional operating reserves                     (1,090)          (307)

           Net cash from operations                       $ --          $   316

For the nine months ended  September 30, 2001 and 2000,  the  Corporate  General
Partner  believed it to be in the best interest of the Partnership to reserve an
additional  $1,090,000 and $307,000,  respectively,  to fund continuing  capital
improvement needs in order for the properties to remain competitive.

Note C - Transactions with Affiliated Parties

The  Partnership  has no employees  and is dependent  on the  Corporate  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  The  Partnership  Agreement  provides  for (i) certain
payments to affiliates for services and (ii)  reimbursement  of certain expenses
incurred  by  affiliates  on  behalf  of the  Partnership.  Balances  and  other
transactions  with  affiliates  of the  Corporate  General  Partner for the nine
months ended September 30, 2001 and 2000 are as follows:

                                                          2001       2000
                                                          (in thousands)
Property management fees (included in
  operating expenses)                                    $ 241      $ 238
Reimbursement for services of affiliates
  (included in investment properties,
  general and administrative expense and
  operating expense)                                       307        145
Due to general partner                                   3,527         --

During the nine months  ended  September  30, 2001 and 2000,  affiliates  of the
Corporate General Partner were entitled to receive 5% of gross receipts from all
of the Registrant's properties as compensation for providing property management
services.  The Registrant  paid to such  affiliates  approximately  $241,000 and
$238,000 for the nine months ended September 30, 2001 and 2000, respectively.

Affiliates  of  the  Corporate   General  Partner   received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $307,000 and
$145,000 for the nine months ended  September  30, 2001 and 2000,  respectively.
For the  nine  months  ended  September  30,  2001,  approximately  $175,000  of
construction service reimbursements are included in reimbursement for services.

In accordance with the Partnership Agreement,  the Corporate General Partner has
loaned the Partnership  approximately  $3,513,000 to assist in the redevelopment
required at Parktowne Townhouses due to flood damage. Interest is charged at the
prime rate plus 1%.  Interest  expense  was  approximately  $14,000 for the nine
months ended September 30, 2001 and has been accrued as of September 30, 2001.

During  1983,  a payable to the general  partners of  approximately  $58,000 was
accrued for sales  commissions  earned and included in other  liabilities in the
accompanying  balance sheet at September 30, 2001.  Pursuant to the  Partnership
Agreement,  this  liability  cannot be paid until  certain  levels of return are
received by the limited partners.  As of September 30, 2001, the level of return
to the limited partners has not been met.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates owned 19,193.50 limited partnership units
in the Partnership representing 69.80% of the outstanding units at September 30,
2001. A number of these units were  acquired  pursuant to tender  offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional limited partnership  interests in the Partnership for cash or
in exchange  for units in the  operating  partnership  of AIMCO  either  through
private purchases or tender offers. Under the Partnership Agreement, unitholders
holding a majority of the Units are  entitled  to take action with  respect to a
variety of matters, which would include,  without limitation,  voting on certain
amendments  to the  Partnership  Agreement  and voting to remove  the  Corporate
General  Partner.  As a result of its  ownership  of  69.80% of the  outstanding
units,  AIMCO is in a position to influence all voting decisions with respect to
the Registrant.  When voting on matters,  AIMCO would in all likelihood vote the
Units it acquired in a manner favorable to the interest of the Corporate General
Partner because of its affiliation with the Corporate General Partner.

Note D - Distributions

During the nine months ended  September 30, 2001,  the  Partnership  distributed
approximately  $1,978,000 to the partners  (approximately  $1,958,000 to limited
partners or $71.20 per limited  partnership  unit) from  operations.  During the
nine months ended  September 30, 2000, the Partnership  paid cash  distributions
from operations of  approximately  $1,135,000  (approximately  $1,124,000 to the
limited  partners  or  $40.87  per  limited  partnership  unit).  Subsequent  to
September 30, 2000, the Partnership  declared and paid a cash  distribution from
operations  of  approximately  $316,000  (approximately  $313,000 to the limited
partners or $11.38 per limited partnership unit).

Note E - Casualty Event

During June 2001,  Parktowne Townhouses incurred extensive damage as a result of
severe flooding which affected certain areas of Texas. The estimated  damages to
the  property  include   approximately   $7,500,000  for  mold  remediation  and
approximately $4,100,000 for reconstruction of the property. These costs will be
covered by insurance. As of September 30, 2001, approximately $7,257,000 of mold
remediation  expenses  have been  incurred.  As these  costs  will be covered by
insurance,  the  expenses  are  included  in  receivables  and  deposits  on the
accompanying balance sheet. As the repairs are not yet complete and only a small
portion of  insurance  proceeds  have been  received  to cover the  repairs,  no
casualty gain or loss is being recognized at this time. In addition,  due to the
property  being 100%  physically  vacant  during  August and  September of 2001,
interest,  property taxes and certain operating expenses totaling  approximately
$246,000 have been capitalized as of September 30, 2001.

Note F - Segment Reporting

Statement of Financial  Accounting Standards ("SFAS") No. 131, "Disclosure about
Segments of an Enterprise and Related Information" established standards for the
way that public business enterprises report information about operating segments
in annual  financial  statements  and  requires  that those  enterprises  report
selected  information about operating segments in interim financial reports.  It
also established  standards for related disclosures about products and services,
geographic  areas,  and  major  customers.  As  defined  in SFAS  No.  131,  the
Partnership  has only one  reportable  segment.  The Corporate  General  Partner
believes that  segment-based  disclosures  will not result in a more  meaningful
presentation than the financial statements as currently presented.

Note G - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its Corporate  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purports  to  assert  claims  on  behalf  of a class  of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  which are named as nominal  defendants,  challenging,  among other
things,  the  acquisition of interests in certain  general  partner  entities by
Insignia  Financial  Group,  Inc.  ("Insignia")  and entities which were, at one
time,  affiliates of Insignia;  past tender offers by the Insignia affiliates to
acquire  limited  partnership  units;  management  of  the  partnerships  by the
Insignia  affiliates;  and the series of transactions which closed on October 1,
1998 and  February 26, 1999 whereby  Insignia  and  Insignia  Properties  Trust,
respectively,  were merged into AIMCO.  The plaintiffs seek monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998,  the Corporate  General  Partner filed a motion  seeking  dismissal of the
action.  In lieu of responding to the motion,  the  plaintiffs  filed an amended
complaint.  The  Corporate  General  Partner  filed  demurrers  to  the  amended
complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Corporate  General Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Corporate  General  Partner and its  affiliates  filed a
demurrer to the third amended  complaint.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied plaintiffs' motion for reconsideration.  On
October 5, 2001, the Corporate General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint,  which, together with a demurrer filed
by other  defendants,  is currently  scheduled to be heard on November 15, 2001.
The Court has set the matter for trial in January 2003.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Corporate  General Partner and affiliated
defendants  moved to strike the first  amended  complaint  in its  entirety  for
violating  the Court's July 10, 2001 order  granting in part and denying in part
defendants'  demurrer in the Nuanes action, or alternatively,  to strike certain
portions of the complaint based on the statute of limitations.  Other defendants
in the action  demurred to the fourth  amended  complaint,  and,  alternatively,
moved to strike the complaint.  The matters are currently  scheduled to be heard
on November 15, 2001.

The Corporate General Partner does not anticipate that any costs,  whether legal
or  settlement  costs,  associated  with  these  cases will be  material  to the
Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.


ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The  matters  discussed  in this Form  10-QSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions,   competitive  and  regulatory   matters,   etc.)  detailed  in  the
disclosures  contained  in this  Form  10-QSB  and the  other  filings  with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussion of the  Registrant's  business and results of  operations,  including
forward-looking  statements  pertaining  to such  matters,  does not  take  into
account the effects of any changes to the  Registrant's  business and results of
operations.  Accordingly,  actual  results  could differ  materially  from those
projected in the forward-looking  statements as a result of a number of factors,
including those identified herein.

The Partnership's  investment  properties consist of three apartment  complexes.
The following table sets forth the average  occupancy of the properties for each
of the nine months ended September 30, 2001 and 2000:

                                                            Average
                                                           Occupancy
       Property                                        2001          2000
       Parktowne Townhouses (1)
          Deer Park, Texas                             64%            95%
       Raintree Apartments
          Anderson, South Carolina                     94%            95%
       Signal Pointe Apartments (2)
          Winter Park, Florida                         91%            95%

   (1)   During June 2001,  Parktowne  Townhouses was damaged by severe flooding
         which  affected  certain  areas of Texas.  The  property  has  incurred
         extensive  damage  as a  result  of the  flooding  causing  100% of the
         property  to be  unavailable  for  occupancy.  It is  expected  that  a
         majority  of the  damage  costs  will  be  covered  by  insurance.  The
         Corporate General Partner is currently involved in the redevelopment of
         the property.

   (2)   The Corporate  General Partner  attributes the decrease in occupancy to
         softening of the rental market in the area.

Results of Operations

The Partnership realized net income for the nine months ended September 30, 2001
of  approximately   $913,000   compared  to   approximately   $958,000  for  the
corresponding  period in 2000.  For the three month periods ended  September 30,
2001 and 2000, the Partnership realized net income of approximately $579,000 and
$324,000,  respectively.  The  decrease in net income for the nine months  ended
September 30, 2001 is due to an increase in total expenses  partially  offset by
an  increase  in total  revenues.  Total  revenues  increased  primarily  due to
increased  rental and other  income.  Rental income  increased  primarily due to
increased average rental rates at two of the Partnership's properties, partially
offset by a decrease in occupancy at all of the Partnership's properties.  While
no units are physically occupied at Parktowne  Townhouses due to severe flooding
damage,  the Partnership has received insurance proceeds to partially cover lost
rents.  Other income increased due to an increase in utility  reimbursements  at
the Partnership's properties.

Total expenses for the nine months ended September 30, 2001 increased  primarily
due to an increase in interest expense partially offset by a decrease in general
and  administrative,  depreciation  and property tax expenses.  Interest expense
increased due to the  refinancing  of the mortgage notes  encumbering  all three
properties in December 2000.

Property tax expense decreased due to the capitalization of the taxes applicable
to  Parktowne  Townhouses  for the three months  ended  September  30, 2001 (see
discussion below). Depreciation expense decreased due to the cost of assets that
became fully depreciated during the first three quarters plus the assets written
off at Parktowne  Townhouses due to the flood damage  exceeding the depreciation
on the cost of the new additions,  combined with the fact that  depreciation for
Parktowne  Townhouses was not taken during August and September 2001 because the
property was not operating during this time period.

The increase in net income for the three months ended  September 30, 2001 is due
to an increase in total revenues and a decrease in total expenses.  The increase
in total  revenues is primarily due to an increase in rental income as discussed
above.  The  decrease  in total  expenses  is  primarily  due to a  decrease  in
operating,  depreciation,  property tax and general and administrative  expenses
partially offset by an increase in interest  expense.  The decrease in operating
expense is primarily  due to the 100% physical  vacancy at Parktowne  Townhouses
due to extensive damage caused by severe flooding during June 2001. The decrease
in depreciation and property tax expenses is primarily due to the capitalization
of the taxes  applicable  to  Parktowne  Townhouses  for the three  months ended
September  30,  2001  and  due  to no  depreciation  being  taken  at  Parktowne
Townhouses for August and September of 2001 (see discussion below). The increase
in interest  expense is primarily due to the  refinancing  of the mortgage notes
encumbering  all three  properties in December 2000. This increase was partially
offset by the capitalization of interest applicable to Parktowne  Townhouses for
the three months  ended  September  30, 2001 (see discussion below).

General  and  administrative  expenses  decreased  for the three and nine  month
periods  ended  September  30, 2001  primarily  due to a decrease in the cost of
services  included in the  management  reimbursements  to the Corporate  General
Partner as allowed under the Partnership Agreement. Also included in general and
administrative  expenses  are costs  associated  with the  quarterly  and annual
communications  with  investors  and  regulatory  agencies  and the annual audit
required by the Partnership Agreement.

As part of the ongoing  business plan of the Registrant,  the Corporate  General
Partner  monitors  the  rental  market  environment  at each  of its  investment
properties  to assess  the  feasibility  of  increasing  rents,  maintaining  or
increasing  occupancy  levels and protecting the  Partnership  from increases in
expenses.  As part of this plan,  the  Corporate  General  Partner  attempts  to
protect  the  Partnership  from the  burden of  inflation-related  increases  in
expenses by increasing  rents and  maintaining a high overall  occupancy  level.
However, due to changing market conditions which can result in the use of rental
concessions and rental reductions to offset softening market  conditions,  there
is no guarantee that the Corporate  General Partner will be able to sustain such
a plan.

Liquidity and Capital Resources

At  September  30,  2001,  the  Partnership  had cash and  cash  equivalents  of
approximately $160,000 compared to approximately $849,000 at September 30, 2000.
Cash  and  cash   equivalents   decreased   approximately   $789,000   from  the
Partnership's  previous  year ended  December 31,  2000.  The decrease is due to
approximately  $2,612,000 of cash used in operating  activities partially offset
by  approximately  $1,174,000  of cash  provided  by  financing  activities  and
approximatley  $649,000 of cash provided by investing activities.  Cash provided
by  investing  activities  consisted  of net  withdrawals  from escrow  accounts
maintained by the mortgage  lender and insurance  proceeds  partially  offset by
property  improvements and replacements.  Cash provided by financing  activities
consisted of loans from an affiliate of the Corporate  General Partner partially
offset  by  payments  of  principal  made  on  the  mortgages   encumbering  the
Registrant's  properties,  additional  loan  costs  paid for the  December  2000
refinancings,  and  distributions  to the partners.  The Partnership  invests it
working capital reserves in interest bearing accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the  properties  to  adequately  maintain the physical
assets and other  operating  needs of the Registrant and to comply with Federal,
state, and local legal and regulatory requirements. Capital improvements planned
for each of the Registrant's properties are detailed below.

Parktown Townhouses

During June 2001,  Parktowne Townhouses incurred extensive damage as a result of
severe flooding which affected certain areas of Texas. The estimated  damages to
the  property  include   approximately   $7,500,000  for  mold  remediation  and
approximately $4,100,000 for reconstruction of the property. These costs will be
covered by insurance. As of September 30, 2001, approximately $7,257,000 of mold
remediation  expenses  have been  incurred.  As these  costs  will be covered by
insurance,  the  expenses  are  included  in  receivables  and  deposits  on the
accompanying balance sheet. As the repairs are not yet complete and only a small
portion of  insurance  proceeds  have been  received  to cover the  repairs,  no
casualty gain or loss is being recognized at this time. In addition,  due to the
property  being 100%  physically  vacant  during  August and  September of 2001,
interest,  property taxes and certain operating expenses totaling  approximately
$246,000 have been capitalized as of September 30, 2001.

For 2001,  the  Partnership  has  budgeted  approximately  $203,000  for capital
improvements  at  Parktown  Townhouses,  consisting  primarily  of  parking  lot
improvements,  floor covering replacements,  appliance replacements, and laundry
room  enhancements.  During  the nine  months  ended  September  30,  2001,  the
Partnership completed  approximately $514,000 of budgeted and unbudgeted capital
improvements,  consisting  primarily  of  roof,  appliance  and  floor  covering
replacements,  parking lot resurfacing, plumbing improvements, HVAC replacement,
major landscaping, and structural and building improvements.  These improvements
were funded from operating cash flow,  insurance  proceeds and Corporate General
Partner loans.

Raintree Apartments

For 2001,  the  Partnership  has  budgeted  approximately  $144,000  for capital
improvements  at  Raintree   Apartments,   consisting   primarily  of  appliance
replacements,  floor covering replacements,  and club house renovations.  During
the  nine  months  ended   September  30,  2001,   the   Partnership   completed
approximately   $171,000  of  budgeted  and  unbudgeted  capital   improvements,
consisting  primarily  of floor  covering  replacements,  cabinet  replacements,
structural improvements, roof replacement, HVAC replacements, wall coverings and
major landscaping. These improvements were funded from operating cash flow.

Signal Pointe Apartments

For 2001,  the  Partnership  has  budgeted  approximately  $257,000  for capital
improvements at Signal Pointe Apartments, consisting primarily of floor covering
replacements, appliance replacements and HVAC unit replacements. During the nine
months  ended  September  30,  2001,  the  Partnership  completed  approximately
$433,000 of budgeted and unbudgeted capital  improvements,  consisting primarily
of flooring covering, appliance, and HVAC replacements, structural improvements,
electrical and lighting  enhancements and major landscaping.  These improvements
were funded from operating cash flow.

The additional  capital  expenditures will be incurred only if cash is available
from  operations  and  Partnership  reserves.  To the extent that such  budgeted
capital improvements are completed, the Registrant's distributable cash flow, if
any, may be adversely affected at least in the short term.

The  Registrant's  current assets are thought to be sufficient for any near term
needs  (exclusive  of capital  improvements)  of the  Registrant.  The  mortgage
indebtedness of  approximately  $19,429,000 is amortized over 231 months with no
required balloon payment at maturity as the mortgages will be fully amortized.

During the nine months ended  September 30, 2001,  the  Partnership  distributed
approximately  $1,978,000 to the partners  (approximately  $1,958,000 to limited
partners or $71.20 per limited  partnership  unit) from  operations.  During the
nine months ended  September 30, 2000, the Partnership  paid cash  distributions
from operations of  approximately  $1,135,000  (approximately  $1,124,000 to the
limited  partners  or  $40.87  per  limited  partnership  unit).  Subsequent  to
September 30, 2000, the Partnership  declared and paid a cash  distribution from
operations  of  approximately  $316,000  (approximately  $313,000 to the limited
partners or $11.38 per limited partnership unit). Future cash distributions will
depend on the levels of net cash generated from operations,  the availability of
cash reserves, and the timing of debt maturities,  refinancings, and/or property
sales.  The  Registrant's  distribution  policy is reviewed on a monthly  basis.
There  can  be  no  assurance,  however,  that  the  Partnership  will  generate
sufficient funds from operations  after required capital  expenditures to permit
any  additional  distributions  to its partners  during the remainder of 2001 or
subsequent periods.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates owned 19,193.50 limited partnership units
in the Partnership representing 69.80% of the outstanding units at September 30,
2001. A number of these units were  acquired  pursuant to tender  offers made by
AIMCO or its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will
acquire additional limited partnership  interests in the Partnership for cash or
in exchange  for units in the  operating  partnership  of AIMCO  either  through
private purchases or tender offers. Under the Partnership Agreement, unitholders
holding a majority of the Units are  entitled  to take action with  respect to a
variety of matters, which would include,  without limitation,  voting on certain
amendments  to the  Partnership  Agreement  and voting to remove  the  Corporate
General  Partner.  As a result of its  ownership  of  69.80% of the  outstanding
units,  AIMCO is in a position to influence all voting decisions with respect to
the Registrant.  When voting on matters,  AIMCO would in all likelihood vote the
Units it acquired in a manner favorable to the interest of the Corporate General
Partner because of its affiliation with the Corporate General Partner.

<PAGE>
                           PART II - OTHER INFORMATION


ITEM 1.     LEGAL PROCEEDINGS

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its Corporate  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purports  to  assert  claims  on  behalf  of a class  of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  which are named as nominal  defendants,  challenging,  among other
things,  the  acquisition of interests in certain  general  partner  entities by
Insignia  Financial  Group,  Inc.  ("Insignia")  and entities which were, at one
time,  affiliates of Insignia;  past tender offers by the Insignia affiliates to
acquire  limited  partnership  units;  management  of  the  partnerships  by the
Insignia  affiliates;  and the series of transactions which closed on October 1,
1998 and  February 26, 1999 whereby  Insignia  and  Insignia  Properties  Trust,
respectively,  were merged into AIMCO.  The plaintiffs seek monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998,  the Corporate  General  Partner filed a motion  seeking  dismissal of the
action.  In lieu of responding to the motion,  the  plaintiffs  filed an amended
complaint.  The  Corporate  General  Partner  filed  demurrers  to  the  amended
complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Corporate  General Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Corporate  General  Partner and its  affiliates  filed a
demurrer to the third amended  complaint.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied plaintiffs' motion for reconsideration.  On
October 5, 2001, the Corporate General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint,  which, together with a demurrer filed
by other  defendants,  is currently  scheduled to be heard on November 15, 2001.
The Court has set the matter for trial in January 2003.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Corporate  General Partner and affiliated
defendants  moved to strike the first  amended  complaint  in its  entirety  for
violating  the Court's July 10, 2001 order  granting in part and denying in part
defendants'  demurrer in the Nuanes action, or alternatively,  to strike certain
portions of the complaint based on the statute of limitations.  Other defendants
in the action  demurred to the fourth  amended  complaint,  and,  alternatively,
moved to strike the complaint.  The matters are currently  scheduled to be heard
on November 15, 2001.

The Corporate General Partner does not anticipate that any costs,  whether legal
or  settlement  costs,  associated  with  these  cases will be  material  to the
Partnership's overall operations.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a)    Exhibits:

                  None.

            b)    Reports on Form 8-K filed during the quarter  ended  September
                  30, 2001:

                  None.


<PAGE>


                                   SIGNATURES



In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.



                                    SHELTER PROPERTIES II


                                    By:   Shelter Realty II Corporation
                                          Corporate General Partner


                                    By:   /s/Patrick J. Foye
                                          Patrick J. Foye
                                          Executive Vice President


                                    By:   /s/Martha L. Long
                                          Martha L. Long
                                          Senior Vice President and
                                          Controller


                                    Date: