Form 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

       |X|    Quarterly Report Pursuant to Section 13 or 15(d) of
              the Securities Exchange Act of 1934.
              For the quarterly period ended September 30, 1997

       |_|    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 000-17631

                  ATEL Cash Distribution Fund II, a California
                       Limited Partnership (Exact name of
                     registrant as specified in its charter)

California                                                          94-3051991
(State or other jurisdiction of                              (I. R. S. Employer
 incorporation or organization)                              Identification No.)

           235 Pine Street, 6th Floor, San Francisco, California 94104
                    (Address of principal executive offices)

        Registrant's telephone number, including area code (415) 989-8800

Former name, former address and former fiscal year, if changed since last report

Indicate  by a check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (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  |_|

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

<PAGE>

                          Part I FINANCIAL INFORMATION

Item 1. Financial Statements.


<PAGE>

                         ATEL CASH DISTRIBUTION FUND II
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                 BALANCE SHEETS

                               SEPTEMBER 30, 1997
                                   (Unaudited)

                                     ASSETS


Cash and cash equivalents                                             $969,259

Accounts receivable, net of allowance for doubtful 
   accounts of $15,552                                                 119,606

Investment in equipment and leases                                   3,026,091
                                                               ----------------
                                                                    $4,114,956
                                                               ================

                        LIABILITIES AND PARTNERS' CAPITAL

Non-recourse debt                                                     $868,333
Accrued interest                                                        11,607
Accounts payable:
     General Partners                                                   20,117
     Other                                                              70,498
Deposits due to lessees                                                  9,000
Unearned lease income                                                   25,488
                                                               ----------------
Total liabilities                                                    1,005,043

Partners' capital:
     General Partners                                                   84,288
     Limited Partners                                                3,025,625
                                                               ----------------
Total partners' capital                                              3,109,913
                                                               ----------------
                                                                    $4,114,956
                                                               ================

                             See accompanying notes.
<PAGE>


                         ATEL CASH DISTRIBUTION FUND II
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                INCOME STATEMENTS

                       NINE AND THREE MONTH PERIODS ENDED
                           SEPTEMBER 30, 1997 AND 1996

                                   (Unaudited)
<TABLE>
<CAPTION>

                                                  Nine Months Ended                   Three Months Ended
                                                    September 30,                       September 30,
Revenues:                                      1997              1996              1997              1996
                                               ----              ----              ----              ----
<S>                                            <C>                 <C>               <C>               <C>     
Lease income:
     Operating                                  $695,748         $1,144,100          $178,166          $338,012
     Direct financing                            120,782            250,018            33,779            71,411
     Leveraged                                    14,161             12,860             2,023             3,215
     Gain (loss) on disposition of assets        150,984             51,757               867           (11,893)
Interest income                                   20,681             10,869             7,716             4,724
Other                                             64,298            177,151               546            79,323
                                          ---------------   ----------------  ----------------  ----------------
                                               1,066,654          1,646,755           223,097           484,792
                                          ---------------   ----------------  ----------------  ----------------
Expenses:
Depreciation                                     291,868            712,396            74,075           184,516
Interest expense                                  96,282            190,085            24,964            55,118
Management fees                                   63,963            119,981            14,048            45,941
Administrative cost reimbursements                99,420            101,298            34,552            40,396
Taxes                                             20,641             32,048                 -                 -
Other expense                                     28,987             31,345             2,916            12,376
Professional fees                                 21,052             19,682            12,602             6,471
Provision for losses                               4,162             16,192                 -             4,846
                                          ---------------   ----------------  ----------------  ----------------
                                                 626,375          1,223,027           163,157           349,664
                                          ---------------   ----------------  ----------------  ----------------
Net income                                      $440,279           $423,728           $59,940          $135,128
                                          ===============   ================  ================  ================
Net income:
     General Partners                             $4,403             $4,237              $599            $1,351
     Limited Partners                            435,876            419,491            59,341           133,777
                                          ---------------   ----------------  ----------------  ----------------
                                                $440,279           $423,728           $59,940          $135,128
                                          ===============   ================  ================  ================

Net income per Limited Partnership unit            $6.23              $5.99             $0.85             $1.91

Weighted average number of units
   outstanding                                    69,979             69,979            69,979            69,979

</TABLE>

                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                      NINE MONTHS ENDED SEPTEMBER 30, 1997

<TABLE>
<CAPTION>
                                                  Limited Partners        General
                                      Units             Amount           Partners            Total
<S>                                       <C>            <C>                  <C>            <C>       
Balance December 31, 1996                 69,979         $3,608,097           $79,885        $3,687,982
Net income                                                  435,876             4,403           440,279
Distributions to limited partners                        (1,018,348)                -        (1,018,348)
                                  ---------------   ----------------  ----------------  ----------------
Balance September 30, 1997                69,979         $3,025,625           $84,288        $3,109,913
                                  ===============   ================  ================  ================
</TABLE>

                             See accompanying notes.


<PAGE>

                         ATEL CASH DISTRIBUTION FUND II
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                            STATEMENTS OF CASH FLOWS

                       NINE AND THREE MONTH PERIODS ENDED
                           SEPTEMBER 30, 1997 AND 1996

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                  Nine Months Ended                  Three Months Ended
                                                                    September 30,                       September 30,
                                                                    -------------                       -------------
                                                               1997              1996              1997              1996
                                                               ----              ----              ----              ----
Operating activities:
<S>                                                            <C>                <C>                <C>               <C>     
Net income                                                      $440,279           $423,728           $59,940          $135,128
Adjustments to reconcile net income to net
   cash provided by operations:
     Depreciation                                                291,868            712,396            74,075           184,516
     Revenues from leveraged leases                              (14,161)           (12,860)           (2,023)           (3,215)
     (Gain) loss on dispositions of assets                      (150,984)           (51,757)             (867)           11,893
     Provision for losses                                          4,162             16,192                 -             4,846
Changes in operating assets and liabilities:
   Accounts receivable                                           (89,363)            26,349           (26,286)            1,675
   Accounts payable, General Partner                              (1,165)           (15,252)           18,576            12,120
   Accounts payable, other                                         3,714             19,169            (1,583)           (1,632)
   Accrued interest                                              (17,485)           (17,777)           (5,663)           (6,030)
   Customer deposit                                              (60,000)                 -                 -                 -
   Unearned operating lease income                                 8,989            (23,818)           14,807           (11,028)
                                                          ---------------   ----------------  ----------------  ----------------
Net cash provided by operations                                  415,854          1,076,370           130,976           328,273
                                                          ---------------   ----------------  ----------------  ----------------

Investing activities:
Proceeds from sales of equipment                                 768,223            679,310           204,259           248,151
Reductions of net investment in direct
   financing leases                                              639,725            670,327           216,916           220,499
                                                          ---------------   ----------------  ----------------  ----------------
Net cash provided by investing activities                      1,407,948          1,349,637           421,175           468,650
                                                          ---------------   ----------------  ----------------  ----------------
</TABLE>




<PAGE>

                         ATEL CASH DISTRIBUTION FUND II
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                            STATEMENTS OF CASH FLOWS

                       NINE AND THREE MONTH PERIODS ENDED
                           SEPTEMBER 30, 1997 AND 1996

                                   (Unaudited)
                                   (Continued)
<TABLE>
<CAPTION>

                                                                  Nine Months Ended                  Three Months Ended
                                                                    September 30,                       September 30,
                                                                    -------------                       -------------
                                                               1997              1996              1997              1996
                                                               ----              ----              ----              ----
<S>                                                           <C>                <C>                 <C>               <C>     
Financing activities:
Repayment of non-recourse debt                                  (825,532)          (956,809)         (240,258)         (307,442)
Distributions to limited partners                             (1,018,348)        (1,603,898)         (272,772)         (472,804)
                                                          ---------------   ----------------  ----------------  ----------------
Net cash used in financing activities                         (1,843,880)        (2,560,707)         (513,030)         (780,246)
                                                          ---------------   ----------------  ----------------  ----------------

Net (decrease) increase in cash and cash
   equivalents                                                   (20,078)          (134,700)           39,121            16,677
Cash and cash equivalents at beginning of
   period                                                        989,337            874,714           930,138           723,337
                                                          ---------------   ----------------  ----------------  ----------------
Cash and cash equivalents at end of
   period                                                       $969,259           $740,014          $969,259          $740,014
                                                          ===============   ================  ================  ================


Supplemental disclosures of cash flow information:

Cash paid for interest                                           $96,282           $190,085           $24,964           $55,118
                                                          ===============   ================  ================  ================

Supplemental schedule of non-cash transactions:

Operating lease assets reclassified to equipment
   held for lease                                             $1,131,256           $146,252           $85,102          $146,252
Less accumulated depreciation                                   (865,387)          (118,612)          (62,762)         (118,612)
                                                          ---------------   ----------------  ----------------  ----------------
                                                                $265,869            $27,640           $22,340           $27,640
                                                          ===============   ================  ================  ================

Assets held for lease reclassified as operating
   lease assets                                               $1,045,766                           $1,045,766
Less accumulated depreciation                                   (802,625)                            (802,625)
                                                          ---------------                     ----------------
                                                                $243,141                             $243,141
                                                          ===============                     ================
</TABLE>

                             See accompanying notes.


<PAGE>

                         ATEL CASH DISTRIBUTION FUND II
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1996
                                   (Unaudited)


1.  Interim financial statements:

The unaudited interim financial statements reflect all adjustments which are, in
the opinion of the general partners,  necessary to a fair statement of financial
position and results of operations for the interim periods  presented.  All such
adjustments are of a normal recurring nature.  These unaudited interim financial
statements  should be read in  conjunction  with the most recent  report on Form
10K.


2. Investment in leases:

The Partnership's investment in leases consists of the following:

<TABLE>
<CAPTION>
                                                                               Depreciation
                                                                              Expense or         Reclass-
                                         December 31,                        Amortization      ifications &       September 30,
                                              1996          Additions          of Leases        Dispositions         1997
                                              ----          ---------          ---------      - -------------        ----
<S>                                           <C>                <C>              <C>               <C>              <C>       
Net investment in operating leases            $2,756,220                          ($291,868)        ($634,469)       $1,829,883
Net investment in direct
   financing leases                            1,774,588                           (639,725)           (6,396)        1,128,467
Net investment in leveraged
   leases                                         93,925                             14,161                 -           108,086
Assets held for sale                                   -                                  -            22,728            22,728
Reserve for losses                               (59,809)        ($4,162)                 -               898           (63,073)
                                         ---------------- ---------------   ----------------  ----------------  ----------------
                                              $4,564,924         ($4,162)         ($917,432)        ($617,239)       $3,026,091
                                         ================ ===============   ================  ================  ================
</TABLE>

The following  schedule provides an analysis of the Partnership's  investment in
equipment on operating leases by major  classifications as of December 31, 1996,
dispositions  during  the  three  month  periods  ended  March  31,  June 30 and
September 30, 1997 and as of September 30, 1997:

<TABLE>
<CAPTION>
                                           December 31,    -------- Reclassifications & Dispositions --------     September 30,
        Equipment type                        1996         1st Quarter        2nd Quarter       3rd Quarter          1997
        --------------                        ----         -----------        -----------       -----------          ----
<S>                                           <C>              <C>              <C>                <C>               <C>       
Aircraft                                      $3,164,533       ($810,000)                                            $2,354,533
Mining                                         1,316,547               -        ($1,045,766)       $1,275,560         1,546,341
Manufacturing                                    717,059               -                  -            (1,007)          716,052
Materials handling                               835,681               -           (105,498)         (455,493)          274,690
Other                                          1,035,350         (76,913)          (192,613)         (682,951)           82,873
                                         ---------------- ---------------   ----------------  ----------------  ----------------
                                               7,069,170        (886,913)        (1,343,877)          136,109         4,974,489
Less accumulated depreciation                 (4,312,950)        391,502            969,615          (192,773)       (3,144,606)
                                         ---------------- ---------------   ----------------  ----------------  ----------------
                                              $2,756,220       ($495,411)         ($374,262)         ($56,664)       $1,829,883
                                         ================ ===============   ================  ================  ================

</TABLE>
<PAGE>

                         ATEL CASH DISTRIBUTION FUND II
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1996
                                   (Unaudited)


2. Investment in leases (continued):

At September 30, 1997,  the aggregate  amounts of future  minimum lease payments
are as follows:

                                         Direct
                                       Financing      Operating       Total
                                       ---------      ---------       -----
Three months ending December 31, 1997    $29,298       $154,891      $184,189
         Year ending December 31,1998    115,204        314,951       430,155
                                 1999      4,248        306,932       311,180
                                 2000          -        239,499       239,499
                                 2001          -         37,200        37,200
                                 2002          -         18,600        18,600
                                       ==========   ============  ============
                                        $148,750     $1,072,073    $1,220,823
                                       ==========   ============  ============


3. Non-recourse debt:

Notes payable to financial  institutions are due in varying  monthly,  quarterly
and semi-annual installments of principal and interest. The notes are secured by
assignments  of lease  payments and pledges of the assets  which were  purchased
with the proceeds of the particular notes. Interest rates on the notes vary from
9.43% to 12.86%.

Future  minimum  principal  payments  of debt as of  September  30,  1997 are as
follows:

                                       Principal    Interest       Total
                                       ---------    --------       -----
Three months ending December 31, 1997   $211,620     $24,028    $235,648
        Year ending December 31, 1998    230,050      61,609     291,659
                                 1999    233,530      36,202     269,732
                                 2000    193,133       9,166     202,299
                                       ----------  ----------  ----------
                                        $868,333    $131,005    $999,338
                                       ==========  ==========  ==========


4. Commitments, management and report of fees:

The terms of the  Agreement  of Limited  Partnership  provide  that the  General
Partners and/or Affiliates are entitled to receive certain fees.

The  General  Partners  and/or  Affiliates  earned   partnership  and  equipment
management  fees of $63,963 in 1997 and  $119,181 in 1996,  as  permitted in the
Agreement of Limited Partnership .



<PAGE>

Item 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
Capital Resources and Liquidity

The  Partnership's  primary  source of  liquidity  is cash  received  from lease
rentals. The liquidity of the Partnership will vary in the future, increasing to
the extent cash flows from leases exceed expenses and decreasing as lease assets
are  acquired,  as  distributions  are made to the Limited  Partners  and to the
extent expenses exceed cash flows from leases.

The Partnership currently has available adequate reserves to meet contingencies,
but in the event those  reserves were found to be  inadequate,  the  Partnership

would  likely be in a position to borrow  against its current  portfolio to meet
such  requirements.  The  General  Partners  envision no such  requirements  for
operating  purposes,  nor have they  explored  with lenders the  possibility  of
obtaining loans. There can be no assurance as to the terms of any such financing
or that the Partnership will be able to obtain such loans.

As  of  September  30,  1997,  the   Partnership   had  borrowed   approximately
$21,700,000.  The remaining unpaid balance on those borrowings was approximately
$868,000. The borrowings are non-recourse to the Partnership,  that is, the only
recourse of the lender will be to the equipment or corresponding  lease acquired
with the loan  proceeds.  The  Agreement  of  Limited  Partnership  limits  such
borrowings to 40% of the total cost of equipment, in aggregate.

No commitments of capital have been or are expected to be made.

The Partnership made distributions of cash from 1997 first quarter operations in
April 1997,  from second quarter  operations in July 1997 and from third quarter
operations in October 1997. The amounts of each of the distributions  were $3.75
per Unit. These distributions represent an annualized distribution rate of 3.0%.

If  inflation  in the general  economy  becomes  significant,  it may affect the
Partnership  inasmuch as the residual  (resale) values and rates on re-leases of
the  Partnership's  leased  assets may  increase as the costs of similar  assets
increase.  However,  the  Partnership's  revenues from existing leases would not
increase,  as such rates are generally fixed for the terms of the leases without
adjustment for inflation.

If interest rates increase or decrease  significantly,  the lease rates that the
Partnership can obtain on future leases will be expected to increase or decrease
in  parallel  as the cost of capital is a  significant  factor in the pricing of
lease  financing.  Leases  already  in place,  for the most  part,  would not be
affected by changes in interest rates.

Cash flows, nine months, 1997 vs. 1996

Lease revenues,  the Partnership's primary source of cash, decreased by $576,287
compared to 1996.  Lease  revenues  have declined as leases have matured and the
underlying assets have been sold.

Cash flows provided by investing  activities increased by $58,311 primarily as a
result of increased  asset sales.  The increase in sales  proceeds was partially
offset by a decrease in cash flows from direct financing leases.

There were no financing sources of cash in 1997 or 1996. Debt principal payments
have decreased due to scheduled debt payments.


<PAGE>

Cash flows, three months, 1997 vs. 1996

For the third  quarter,  lease  rents  were the  primary  source of cash for the
Partnership. Lease rents decreased by $198,670 compared to 1996. As noted above,
the  decrease  is the result of assets  coming off lease and being  subsequently
sold.

Cash flows provided by investing  activities decreased by $44,475 due largely to
decreased asset sales.

There were no financing sources of cash in 1997 or 1996. Debt principal payments
decreased due to the causes noted above for the nine month  period.  In both the
nine  and  three  month  periods,   distributions  decreased  as  the  per  Unit
distribution rate was decreased effective with the distribution in April 1997.


Results of Operations

The results of operations in future periods may vary significantly from those of
the first nine months of 1997 as the  Partnership's  lease  portfolio of capital
equipment  matures.  Revenues  from leases are expected to decline over the long
term as leased  assets come off lease and are sold or  re-leased  at lower lease
rates. The effect on net income is not determinable as it will depend to a large
degree on the amounts  received  from the sales of assets or from  re-leases  to
either the same or new lessees once the initial lease terms expire.

1996 vs. 1995

Operating  lease  revenues  decreased  by $448,352 for the nine month period and
$159,846 for the three month  period due to lease  terminations  and  subsequent
asset sales.  Direct financing lease revenues decreased by $129,236 for the nine
month period and  decreased  by $37,632 for the three month  period  compared to
1996. The decreases  resulted from lease  terminations and asset sales. In 1997,
sales of assets  resulted  in gains of  $150,984  (nine  months) and $867 (three
months).  In 1996,  sales of assets  resulted  in gains of $51,757  for the nine
month  period and losses of $11,893 for the three month  period.  Such gains and
losses  are  not  expected  to  be  comparable   from  one  period  to  another.
Depreciation  expense  declined by $420,528  (nine  months) and $110,441  (three
months) as a result of asset  sales  since  October 1,  1995.  Interest  expense
continues to decline in both the three and nine month periods in relation to the
declining  balances of debt.  There have been no new  borrowings  in the current
year.






<PAGE>

                           PART II. OTHER INFORMATION

Item 1.        LEGAL PROCEEDINGS.

                Inapplicable.

Item 2.        CHANGES IN SECURITIES.

                Inapplicable.

Item 3.        DEFAULTS UPON SENIOR SECURITIES.

                Inapplicable.

Item 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY
               HOLDERS.
                Inapplicable.

Item 5.        OTHER INFORMATION.

                Inapplicable.

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

           (a) Documents filed as a part of this report

             1  Financial Statements.

                Included in Part I of this report:

                Balance sheets, September 30, 1997.
                Income  statements  for the nine and three month
                   periods ended September 30, 1997 and 1996.
                Statement of changes in  partners'  capital  for
                   the nine months ended September 30, 1997.
                Statements  of cash flows for the nine and three
                   month  periods  ended  September 30, 1997 and
                   1996.
                Notes to the financial statements

             2  Financial Statement Schedules.

                All other  schedules for which provision is made
                in the applicable accounting  regulations of the
                Securities  and  Exchange   Commission  are  not
                required under the related  instructions  or are
                inapplicable, and therefore have been omitted.

           (b)  Report on Form 8-K
                None


<PAGE>

                                   SIGNATURES


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

Date:
November 12, 1997
                         ATEL Cash Distribution Fund II,
                        a California Limited Partnership
                                  (Registrant)





          By:  /s/   A. J. BATT
              ---------------------------------------------------
              A. J. Batt
              General Partner of registrant



          By:  /s/  DEAN L. CASH
              ---------------------------------------------------
              Dean L. Cash
              General Partner of registrant



          By:   /s/ F. RANDALL BIGONY
              ---------------------------------------------------
              F. RANDALL BIGONY
              Principal financial officer
              of registrant



          By:   /s/ DONALD E.  CARPENTER
              ---------------------------------------------------
              Donald E.  Carpenter,
              Principal accounting
              officer of registrant