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 March 31, 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)

                                 March 31, 2001

<TABLE>
<CAPTION>


Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $   681
   Receivables and deposits                                                      445
   Restricted escrows                                                             24
   Other assets                                                                  682
   Investment properties:
      Land                                                    $  1,814
      Buildings and related personal property                   25,915
                                                                27,729
      Less accumulated depreciation                            (19,148)        8,581

                                                                            $ 10,413
Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                          $   102
   Tenant security deposit liabilities                                           138
   Accrued property taxes                                                        114
   Other liabilities                                                             447
   Mortgage notes payable                                                     19,656

Partners' Deficit
   General partners                                            $ (140)
   Limited partners (27,500 units issued and
      outstanding)                                              (9,904)      (10,044)

                                                                            $ 10,413


                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

b)

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



                                                           Three Months Ended
                                                               March 31,
                                                         2001             2000
Revenues:
   Rental income                                        $1,544           $1,501
   Other income                                            121               63
      Total revenues                                     1,665            1,564

Expenses:
   Operating                                               649              623
   General and administrative                               89               53
   Depreciation                                            257              323
   Interest                                                363              155
   Property taxes                                          114              109
      Total expenses                                     1,472            1,263

Net income                                               $ 193           $  301

Net income allocated to general partners (1%)            $   2           $    3

Net income allocated to limited partners (99%)             191              298

                                                         $ 193           $  301

Net income per limited partnership unit                 $ 6.95           $10.84

Distributions per limited partnership unit              $54.76            $  --

                   See Accompanying Notes to Financial Statements


<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                   --            (6)      (1,506)      (1,512)

Net income for the three months
   ended March 31, 2001                     --             2          191          193

Partners' deficit capital at
   March 31, 2001                       27,500        $ (140)     $(9,904)    $(10,044)

                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>


d)

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

                                                                  Three Months Ended
                                                                       March 31,
                                                                   2001         2000
Cash flows from operating activities:
<S>                                                               <C>           <C>
  Net income                                                      $  193        $ 301
  Adjustments to reconcile net income to net
   cash provided by operating activities:
     Depreciation                                                    257          323
     Amortization of discounts and loan costs                          7           24
     Change in accounts:
      Receivables and deposits                                       402          186
      Other assets                                                   (89)         (37)
      Accounts payable                                               (46)         (86)
      Tenant security deposit liabilities                              6           (1)
      Accrued property taxes                                        (133)         (83)
      Other liabilities                                              115         (112)

        Net cash provided by operating activities                    712          515

Cash flows from investing activities:
   Property improvements and replacements                           (262)         (46)
   Net withdrawals from (deposits to) restricted escrows             884         (292)

        Net cash provided by (used in) investing activities          622         (338)

Cash flows from financing activities:
   Payments on mortgage notes payable                                (74)         (79)
   Loan cost paid                                                    (16)          --
   Distributions paid to partners                                 (1,512)          --

        Net cash used in financing activities                     (1,602)         (79)

Net (decrease) increase in cash and cash equivalents                (268)          98

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

Cash and cash equivalents at end of period                        $ 681       $ 1,425

Supplemental disclosure of cash flow information:
   Cash paid for interest                                         $ 237        $ 158

                   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 month
period ended March 31, 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

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
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.

                                                           Three Months Ended
                                                                March 31,
                                                          2001             2000
                                                             (in thousands)
     Net cash provided by operating activities            $  712          $ 515
        Payments on mortgage notes payable                   (74)           (79)
        Property improvements and replacements              (262)           (46)
        Change in restricted escrows, net                    884           (292)
        Changes in reserves for net operating
           liabilities                                      (255)           133
        Additional operating reserves                       (781)          (231)

           Net cash from operations                       $  224          $  --

For the three  months  ended  March 31,  2001 and 2000,  the  Corporate  General
Partner  believed it to be in the best interest of the Partnership to reserve an
additional  $781,000 and  $231,000,  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 three
months ended March 31, 2001 and 2000 are as follows:

                                                          2001       2000
                                                          (in thousands)
Property management fees (included in
  operating expenses)                                     $ 82       $ 78
Reimbursement for services of affiliates
  (included in investment properties,
  general and administrative expense and
  operating expense)                                        44         32
Due to general partners                                     58         58

During  the three  months  ended  March 31,  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  $82,000 and
$78,000 for the three months ended March 31, 2001 and 2000, respectively.

Affiliates  of  the  Corporate   General  Partner   received   reimbursement  of
accountable  administrative  expenses  amounting  to  approximately  $44,000 and
$32,000 for the three months ended March 31, 2001 and 2000, respectively.

During  1983,  a payable to the general  partners of  approximately  $58,000 was
accrued 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 March 31,  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  currently own 19,140 limited partnership
units in the Partnership  representing 69.60% 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 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  69.60% 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 three  months  ended  March 31,  2001,  the  Partnership  distributed
approximately  $1,512,000 to the partners  (approximately  $1,506,000 to limited
partners or $54.76 per limited partnership unit) from operations.  Subsequent to
March 31,  2001,  the  Partnership  distributed  approximately  $224,000  to the
partners  (approximately  $213,000  to  limited  partners  or $7.75 per  limited
partnership unit) from operations.  No distributions  were made during the three
months ended March 31, 2000.

Note E - 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 establishes  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 F - 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,  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 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 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.  The demurrer is scheduled to be heard
on May 14,  2001.  The Court has also  scheduled a hearing on a motion for class
certification  for August 27, 2001.  Plaintiffs must file their motion for class
certification  no later than June 15, 2001. 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 three months ended March 31, 2001 and 2000:

                                                            Average
                                                           Occupancy
       Property                                        2001          2000

       Parktown Townhouses
          Deer Park, Texas                             96%            94%
       Raintree Apartments
          Anderson, South Carolina                     95%            96%
       Signal Pointe Apartments
          Winter Park, Florida (1)                     91%            94%

(1)   The decrease in occupancy at Signal Pointe  Apartments is due to increased
      competition  and new  construction  of competing  units within the Orlando
      market area, the initiation of sub-metering and the purchase of new homes.

Results of Operations

The Partnership realized net income for the three months ended March 31, 2001 of
approximately  $193,000 compared to approximately $301,000 for the corresponding
period in 2000.  The  decrease  in net  income was due to an  increase  in total
expenses  partially  offset by an increase  in total  revenues.  Total  revenues
increased  due to  increased  rental  income  and other  income.  Rental  income
increased  primarily  due  to  increased  average  rental  rates  at  all of the
Partnership's properties,  partially offset by a decrease in occupancy at Signal
Pointe Apartments,  as discussed above. Other income increased  primarily due to
increased  interest  income due to higher  average  cash  balances  in  interest
bearing accounts and increases in tenant reimbursements.

Total expenses for the three months ended March 31, 2001 increased primarily due
to an increase in  operating,  interest and general and  adminstrative  expenses
partially  offset by a  decrease  in  depreciation  expense.  Operating  expense
increased  primarily  due  to  increases  in  gas  utility  bills  at  Parktowne
Townhouses  and increases in employee  compensation  at Raintree  Apartments and
Parktowne  Townhouses.  These  increases were partially  offset by a decrease in
maintenance expense due to a decrease in contract yard and grounds  improvements
and contract decorating at all three of the Partnership's  properties.  Interest
expense  increased due to the  refinancing  of the mortgage  notes for all three
properties  in  December  2000.  General  and  adminstrative  expense  increased
primarily due to an increase in the cost of services  included in the management
reimbursements to the Corporate General Partner as allowed under the Partnership
Agreement.  Depreciation  expense decreased in the first quarter 2001 due to the
cost of assets that became fully  depreciated in the first quarter 2000 exceeded
the depreciation on the cost of new additions.

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  March  31,  2001,  the  Partnership   had  cash  and  cash   equivalents  of
approximately  $681,000 compared to approximately  $1,425,000 at March 31, 2000.
Cash  and  cash   equivalents   decreased   approximately   $268,000   from  the
Partnership's  previous  year ended  December 31,  2000.  The decrease is due to
approximately  $1,602,000 of cash used in financing  activities partially offset
by  approximately   $622,000  of  cash  provided  by  investing  activities  and
approximately  $712,000 of cash provided by operating  activities.  Cash used in
financing  activities  consisted  of  payments  of  principal  on the  mortgages
encumbering the Registrant's properties, additional loan costs and distributions
to  the  partners.  Cash  provided  by  investing  activities  consisted  of net
withdrawals  from escrow accounts  maintained by the mortgage  lender  partially
offset by property  improvements and replacements.  The Partnership  invests its
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

For 2001,  the  Partnership  has  budgeted  approximately  $90,000  for  capital
improvements  at  Parktown  Townhouses,  consisting  primarily  of  parking  lot
resurfacing,  floor covering  replacements,  appliance  replacements and laundry
room enhancements. During the three months ended March 31, 2001, the Partnership
completed  approximately $173,000 of capital improvements,  consisting primarily
of  floor  covering  replacements,   resurfacing,  major  landscaping,  plumbing
fixtures and other building  improvements.  These  improvements were funded from
operating cash flow.

Raintree Apartments

For 2001,  the  Partnership  has  budgeted  approximately  $48,000  for  capital
improvements  at  Raintree   Apartments,   consisting   primarily  of  appliance
replacements, floor covering replacements and club house renovations. During the
three months  ended March 31,  2001,  the  Partnership  completed  approximately
$17,000  of  capital  improvements,   consisting  primarily  of  floor  covering
replacements,   cabinet   replacements,   fencing   enhancements   and  computer
replacement. These improvements were funded from operating cash flow.

Signal Pointe Apartments

For 2001,  the  Partnership  has  budgeted  approximately  $101,000  for capital
improvements at Signal Pointe Apartments, consisting primarily of floor covering
replacements,  appliance  replacements  and HVAC unit  replacements.  During the
three months  ended March 31,  2001,  the  Partnership  completed  approximately
$72,000  of  capital  improvements,   consisting  primarily  of  floor  covering
replacements,  HVAC replacement, major landscaping, and structural enhancements.
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  $19,656,000 is amortized over 237 months with no
required balloon payment at maturity.

During  the  three  months  ended  March 31,  2001,  the  Partnership  paid cash
distributions  of  approximately   $1,512,000  to  the  partners  (approximately
$1,506,000 to the limited partners or $54.76 per limited  partnership unit) from
operations.   Subsequent  to  March  31,  2001,  the   Partnership   distributed
approximately  $224,000 to the partners  (approximately  $213,000 to the limited
partners  or  $7.75  per  limited   partnership   unit)  from   operations.   No
distributions  were made during the three months  ended March 31,  2000.  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.  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 in 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  currently own 19,140 limited partnership
units in the Partnership  representing 69.60% 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 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  69.60% 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.


                           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,  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 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 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.  The demurrer is scheduled to be heard
on May 14,  2001.  The Court has also  scheduled a hearing on a motion for class
certification  for August 27, 2001.  Plaintiffs must file their motion for class
certification  no later than June 15, 2001. 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.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a) Exhibits:

               None.

            b) Reports  on Form 8-K filed  during the  quarter  ended  March 31,
               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: