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, 2000

[ ] 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, 2000


<TABLE>
<CAPTION>

Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $   849
   Receivables and deposits                                                      180
   Restricted escrows                                                            896
   Other assets                                                                  166
   Investment properties:
      Land                                                    $ 1,814
      Buildings and related personal property                   25,481
                                                                27,295
      Less accumulated depreciation                            (18,664)        8,631

                                                                            $ 10,722
Liabilities and Partners' (Deficit) Capital
Liabilities
   Accounts payable                                                           $   67
   Tenant security deposit liabilities                                           138
   Accrued property taxes                                                        337
   Other liabilities                                                             256
   Mortgage notes payable                                                      7,918

Partners' (Deficit) Capital
   General partners                                            $  (128)
   Limited partners (27,500 units issued and
      outstanding)                                               2,134         2,006

                                                                            $ 10,722
</TABLE>

                   See Accompanying Notes to Financial Statements

<PAGE>

b)

                              SHELTER PROPERTIES II
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)
                          (in thousands, except unit data)


<TABLE>
<CAPTION>

                                      Three Months Ended          Nine Months Ended
                                         September 30,              September 30,
                                       2000          1999         2000         1999
Revenues:
<S>                                  <C>           <C>           <C>          <C>
   Rental income                     $ 1,559       $ 1,465       $ 4,567      $ 4,299
   Other income                           93            64           248          201
       Total revenues                  1,652         1,529         4,815        4,500

Expenses:
   Operating                             706           810         1,984        1,973
   General and administrative            106            64           226          158
   Depreciation                          222           201           780          700
   Interest                              181           187           533          567
   Property taxes                        113           108           334          324
       Total expenses                  1,328         1,370         3,857        3,722

Net income                             $ 324         $ 159         $ 958        $ 778

Net income allocated to
   general partners (1%)               $   3         $   2         $  10          $ 8
Net income allocated to
   limited partners (99%)                321           157           948          770

                                      $  324         $ 159         $ 958        $ 778
Net income per limited
   partnership unit                  $ 11.67        $ 5.71       $ 34.47      $ 28.00

Distributions per limited
    partnership unit                   $ --        $ 10.80       $ 40.87      $ 10.80
</TABLE>

                   See Accompanying Notes to Financial Statements

<PAGE>

c)

                               SHELTER PROPERTIES II
                STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
                                   (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) capital at
   December 31, 1999                    27,500        $ (127)     $ 2,310    $ 2,183

Distributions to partners                   --           (11)      (1,124)    (1,135)

Net income for the nine months
   ended September 30, 2000                 --            10          948        958

Partners' (deficit) capital at
   September 30, 2000                   27,500        $ (128)     $ 2,134    $ 2,006
</TABLE>

                   See Accompanying Notes to Financial Statements

<PAGE>
d)

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

                                                                 Nine Months Ended
                                                                   September 30,
                                                                  2000        1999
Cash flows from operating activities:
<S>                                                              <C>           <C>
   Net income                                                    $  958        $ 778
   Adjustments to reconcile net income to net
     cash provided by operating activities:
        Depreciation                                                780          700
        Amortization of discounts and loan costs                     88           79
        Loss on disposal of property                                 --           11
        Change in accounts:
            Receivables and deposits                                189         (102)
            Other assets                                            (28)         (62)
            Accounts payable                                        (71)         (32)
            Tenant security deposit liabilities                     (57)          19
            Accrued property taxes                                  187           90
            Other liabilities                                      (186)           5

               Net cash provided by operating activities          1,860        1,486

Cash flows from investing activities:
   Property improvements and replacements                          (454)      (1,127)
   Net (deposits to) withdrawals from restricted escrows           (511)         604

               Net cash used in investing activities               (965)        (523)

Cash flows from financing activities:
   Distributions to partners                                     (1,135)        (300)
   Payments on mortgage notes payable                              (238)        (222)

               Net cash used in financing activity               (1,373)        (522)

Net (decrease) increase in cash and cash equivalents               (478)         441

Cash and cash equivalents at beginning of period                  1,327          576

Cash and cash equivalents at end of period                       $  849      $ 1,017

Supplemental disclosure of cash flow information:
   Cash paid for interest                                        $  470        $ 488
</TABLE>

                   See Accompanying Notes to Financial Statements

<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
months ended September 30, 2000, are not  necessarily  indicative of the results
that may be expected for the fiscal year ending  December 31, 2000.  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,
1999.

Note B - Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment  Investment and Management Company  ("AIMCO"),  a publicly
traded real estate investment trust, with AIMCO being the surviving  corporation
(the "Insignia Merger").  As a result, AIMCO acquired 100% ownership interest in
the Corporate  General Partner.  The Corporate  General Partner does not believe
that this  transaction has had or will have a material effect on the affairs and
operations of the Partnership.

Note C - Reconciliation of Cash Flows

The following is a reconciliation of the subtotal on the accompanying statements
of cash flows captioned "Net cash provided by operating activities" to "Net cash
used in operations", as defined in the partnership agreement. However, "Net cash
used in 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,
                                                          2000            1999
                                                             (in thousands)
     Net cash provided by operating activities           $ 1,860        $ 1,486
        Payments on mortgage notes payable                  (238)          (222)
        Property improvements and replacements              (454)        (1,127)
        Change in restricted escrows, net                   (511)           604
        Changes in reserves for net operating
           liabilities                                       (34)            82
        Additional operating reserves                       (307)          (823)

           Net cash from operations                       $ 316          $   --

For the nine months ended  September 30, 2000 and 1999,  the  Corporate  General
Partner  believed it to be in the best interest of the Partnership to reserve an
additional  $307,000 and  $823,000,  respectively,  to fund  continuing  capital
improvement needs in order for the properties to remain competitive.

Note D - 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, 2000 and 1999 are as follows:

                                                              2000        1999
                                                               (in thousands)
Property management fees (included in
  operating expenses)                                         $238        $226
Reimbursement for services of affiliates
  (included in investment properties,
  general and administrative expense and
  operating expense)                                           145         129
Due to general partners (included in other liabilities)         58          58

During the nine months  ended  September  30, 2000 and 1999,  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  $238,000 and
$226,000 for the nine months ended September 30, 2000 and 1999, respectively.

Affiliates  of  the  Corporate   General  Partner   received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $145,000 and
$129,000 for the nine months ended September 30, 2000 and 1999, respectively.

During 1983, a liability  of  approximately  $58,000 was incurred to the general
partners for sales commissions  earned.  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, 2000, the level of return to the limited
partners has not been met.

On September 26, 1997, an affiliate of the Corporate  General Partner  purchased
Lehman Brothers' Class "D" subordinated bonds of SASCO 1992-M1.  These bonds are
secured  by 55  multi-family  apartment  mortgage  loan  pairs  held  in  Trust,
including Parktown Townhouses, Raintree Apartments, and Signal Pointe Apartments
owned by the Partnership.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  currently own 17,637 limited partnership
units in the Partnership representing 64.135% of the outstanding units. 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 make one or more
additional offers to acquire  additional  limited  partnership  interests in the
Partnership  for cash or in exchange for units in the operating  partnership  of
AIMCO. 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 64.135%  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
their affiliation with the Corporate General Partner.

Note E - Distributions

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). During the nine
months ended September 30, 1999, the Partnership  paid cash  distributions  from
operations  of  approximately  $300,000  (approximately  $297,000 to the limited
partners or $10.80 per limited partnership unit).

Note F - Segment Reporting

Description  of the types of products  and  services  from which the  reportable
segment  derives its  revenues:  The  Partnership  has one  reportable  segment:
residential  properties,  consisting of three apartment complexes one located in
each of Texas,  South Carolina,  and Florida.  The  Partnership  rents apartment
units to tenants for terms that are typically twelve months or less.

Measurement of segment profit and loss: The  Partnership  evaluates  performance
based on segment profit (loss) before  depreciation.  The accounting policies of
the  reportable  segment are the same as those  described  in the  Partnership's
Annual Report on Form 10-KSB for the year ended December 31, 1999.

Factors  management used to identify the enterprise's  reportable  segment:  The
Partnership's  reportable  segment consists of investment  properties that offer
similar  products and services.  Although each of the  investment  properties is
managed  separately,  they have been aggregated into one segment as they provide
services with similar types of products and customers.

Segment  information  for the three and nine month periods  ended  September 30,
2000 and 1999 is shown in the tables below (in  thousands).  The "Other"  column
includes  Partnership  administration  related  items and income and expense not
allocated to the reportable segment.


 Three Months Ended September 30, 2000    Residential      Other       Totals

Rental income                               $ 1,559         $ --      $ 1,559
Other income                                     92             1          93
Interest expense                                181            --         181
Depreciation                                    222            --         222
General and administrative expense               --           106         106
Segment profit (loss)                           429          (105)        324


  Nine Months Ended September 30, 2000    Residential      Other       Totals

Rental income                               $ 4,567         $ --      $ 4,567
Other income                                    244             4         248
Interest expense                                533            --         533
Depreciation                                    780            --         780
General and administrative expense               --           226         226
Segment profit (loss)                         1,180          (222)        958
Total assets                                 10,565           157      10,722
Capital expenditures for investment
  properties                                    454            --         454


 Three Months Ended September 30, 1999    Residential      Other       Totals

Rental income                               $ 1,465         $ --      $ 1,465
Other income                                     63             1          64
Interest expense                                187            --         187
Depreciation                                    201            --         201
General and administrative expense               --            64          64
Segment profit (loss)                           222           (63)        159


  Nine Months Ended September 30, 1999    Residential      Other       Totals

Rental income                               $ 4,299         $ --      $ 4,299
Other income                                    195             6         201
Interest expense                                567            --         567
Depreciation                                    700            --         700
General and administrative expense               --           158         158
Segment profit (loss)                           930          (152)        778
Total assets                                 10,602           162      10,764
Capital expenditures for investment
  properties                                  1,127            --       1,127


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. 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 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; the management of partnerships
by the  Insignia  affiliates;  and the  Insignia  Merger.  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 have 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 final 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. The Court is considering applications for lead
counsel and has  currently  scheduled a hearing on the matter for  November  20,
2000. The Corporate  General Partner does not anticipate  that costs  associated
with this case 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.


<PAGE>

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, 2000 and 1999:

                                                            Average
                                                           Occupancy
       Property                                       2000           1999
       Parktown Townhouses
          Deer Park, Texas                             95%            94%
       Raintree Apartments
          Anderson, South Carolina                     95%            95%
       Signal Pointe Apartments
          Winter Park, Florida                         95%            95%

Results of Operations

The Partnership realized net income for the nine months ended September 30, 2000
of  approximately   $958,000   compared  to   approximately   $778,000  for  the
corresponding  period in 1999.  For the three month periods ended  September 30,
2000 and 1999, the Partnership realized net income of approximately $324,000 and
$159,000,  respectively.  The  increase in net income for the nine months  ended
September 30, 2000 is due to an increase in total revenues  partially  offset by
an increase in total  expenses.  The increase in net income for the three months
ended  September  30, 1999,  is due to an increase in total  revenues  and, to a
lesser extent,  a decrease in total  expenses.  Total revenues for the three and
nine months ended  September 30, 2000 increased  primarily due to an increase in
rental and, to a lesser extent,  other income.  The increase in rental income is
primarily due to an increase in the average rental rates at the three investment
properties.  The  increase in other  income is  primarily  due to an increase in
interest  income as a result of larger  average cash  balances  held in interest
bearing accounts.

Total expenses for the nine months ended September 30, 2000 increased  primarily
due to an increase in  depreciation  and  general  and  administrative  expenses
partially offset by a decrease in interest expense. Total expenses for the three
months  ended  September  30,  2000  decreased  primarily  due to a decrease  in
operating  expense largely offset by an increase in depreciation and general and
administrative  expenses.   Depreciation  expense  for  the  nine  months  ended
September  30, 2000  increased  due to property  improvements  and  replacements
completed during the past twelve months. Interest expense decreased for the nine
months  ended  September  30, 2000 due to a decrease in the average  outstanding
debt balances.  The decrease in operating  expense during the three months ended
September  30, 2000, is primarily due to the fact that no expenses were incurred
during the third quarter of 2000 for repairs as was incurred for repairs  during
the third quarter of 1999 for fire damage to four units at Parktown Townhouses.

General and administrative  expense increased due to an increase in the costs of
services  included in the  management  reimbursements  to the Corporate  General
Partner  as  allowed  under  the  Partnership  Agreement.  In  addition,   costs
associated  with the  quarterly  and annual  communications  with  investors and
regulatory  agencies and the annual audit required by the Partnership  Agreement
are also included.

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,  2000,  the  Partnership  had cash and  cash  equivalents  of
approximately  $849,000  compared to  approximately  $1,017,000 at September 30,
1999.  Cash and  cash  equivalents  decreased  approximately  $478,000  from the
Partnership's  previous  year ended  December 31,  1999.  The decrease is due to
approximately  $965,000 of cash used in investing  activities and  approximately
$1,373,000 of cash used in financing  activities  which was partially  offset by
approximately $1,860,000 of cash provided by operating activities.  Cash used in
investing  activities consisted of net deposits to escrow accounts maintained by
the mortgage lender and property  improvements  and  replacements.  Cash used in
financing activities consisted of distributions to the partners and, to a lesser
extent, payments of principal made on the mortgages encumbering the Registrant's
properties. The Partnership invests its working capital reserves in money market
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

For 2000,  the  Partnership  has  budgeted  approximately  $113,000  for capital
improvements  at  Parktown   Townhouses,   consisting  primarily  of  structural
improvements, floor covering replacements,  appliance replacements and HVAC unit
replacements.  During the nine months ended  September 30, 2000, the Partnership
completed   approximately   $165,000  of   budgeted   and   unbudgeted   capital
improvements,  consisting  primarily  of  floor  covering  replacements,  air
conditioning  improvements,  exterior  painting,  parking lot enhancements,  and
appliance replacements. These improvements were funded from operating cash flow.

Raintree Apartments

For 2000,  the  Partnership  has  budgeted  approximately  $73,000  for  capital
improvements at Raintree Apartments,  consisting primarily of major landscaping,
floor covering replacements and roof replacements.  During the nine months ended
September 30, 2000, the Partnership completed  approximately $80,000 of budgeted
and unbudgeted capital  improvements,  consisting primarily of roof replacement,
floor covering replacements,  appliance replacements,  and major landscaping.
These improvements were funded from operating cash flow.

Signal Pointe Apartments

For 2000,  the  Partnership  has  budgeted  approximately  $181,000  for capital
improvements  at Signal Pointe  Apartments,  consisting  primarily of structural
improvements, floor covering replacements,  appliance replacements and HVAC unit
replacements.  During the nine months ended  September 30, 2000, the Partnership
completed   approximately   $209,000  of   budgeted   and   unbudgeted   capital
improvements,  consisting  primarily of floor  covering and air  conditioning
replacements,  and structural and other  improvements.  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 $7,918,000, net of discount, is amortized over 257
months  with  required  balloon  payments  of  approximately  $7,370,000  due on
November 15, 2002. The Corporate  General Partner will attempt to refinance such
indebtedness  and/or sell the  properties  prior to such  maturity  date. If the
properties cannot be refinanced or sold for a sufficient  amount, the Registrant
may risk losing such properties through foreclosure.

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). During the nine
months ended September 30, 1999, the Partnership  paid cash  distributions  from
operations  of  approximately  $300,000  (approximately  $297,000 to the limited
partners or $10.80 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 quarterly basis.
Distributions  may be  restricted  by the  requirement  to deposit net operating
income (as  defined in the  mortgage  note) into the reserve  account  until the
reserve  account is funded in an amount equal to a minimum of $400 and a maximum
of  $1,000  per  apartment  unit for  each  respective  property  for a total of
approximately $341,000 to $853,000. The reserve account balance at September 30,
2000 was approximately  $872,000.  There can be no assurance,  however, that the
Partnership  will  generate  sufficient  funds from  operations  after  required
capital  expenditures to permit additional  distributions to its partners during
the remainder of 2000 or subsequent periods.

<PAGE>


                           PART II - OTHER INFORMATION


ITEM 1.     LEGAL PROCEDINGS

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. 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 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; the management of partnerships
by the  Insignia  affiliates;  and the  Insignia  Merger.  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 have 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 final 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. The Court is considering applications for lead
counsel and has  currently  scheduled a hearing on the matter for  November  20,
2000. The Corporate  General Partner does not anticipate  that costs  associated
with this case will be material to the Partnership's overall operations.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a)    Exhibits:

                  Exhibit 27, Financial Data Schedule, is filed as an exhibit to
                  this report.

            b)    Reports on Form 8-K filed during the quarter  ended  September
                  30, 2000:

                  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: