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 March 31, 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



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 SHEET

                                 MARCH 31, 1997
                                   (Unaudited)


                                     ASSETS



Cash and cash equivalents                                            $1,045,503

Accounts receivable, net of allowance for doubtful
accounts of $15,551                                                      46,583

Investment in equipment and leases                                    3,862,788
                                                                ----------------
Total assets                                                         $4,954,874
                                                                ================


                        LIABILITIES AND PARTNERS' CAPITAL


Non-recourse debt                                                    $1,404,945

Accrued interest                                                         23,182

Accounts payable:
     General Partners                                                    17,912
     Other                                                               74,523

Customer deposit                                                          9,000

Unearned income                                                          22,704
                                                                ----------------
Total liabilities                                                     1,552,266

Partners' capital:
     General Partners                                                    81,759
     Limited partners                                                 3,320,849
                                                                ----------------
Total partners' capital                                               3,402,608
                                                                ----------------
Total liabilities and partners' capital                              $4,954,874
                                                                ================

                             See accompanying notes.

<PAGE>

                         ATEL CASH DISTRIBUTION FUND II
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                INCOME STATEMENTS

                            THREE MONTH PERIODS ENDED
                             MARCH 31, 1997 and 1996
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                                     1997               1996
                                                                                                     ----               ----
<S>                                                                                                      <C>              <C>
Revenues:
Lease income:
     Operating                                                                                           $274,437         $431,672
     Direct financing                                                                                      46,622           93,004
     Leveraged                                                                                              6,069            4,823
     Gain on sale of lease assets                                                                          82,072            1,927
Interest income                                                                                             6,227            2,997
Other                                                                                                         819           79,466
                                                                                              -------------------- ----------------
                                                                                                          416,246          613,889
                                                                                              -------------------- ----------------
Expenses:
Depreciation and amortization                                                                             113,174          323,465
Interest expense                                                                                           39,376           71,185
Equipment and partnership management fees to General Partners                                              25,968           40,220
Administrative cost reimbursements to General Partners                                                     37,249           23,541
Other                                                                                                       8,886            9,303
Provision for losses                                                                                        4,162            5,874
                                                                                              -------------------- ----------------
                                                                                                          228,815          473,588
                                                                                              -------------------- ----------------
Net Income                                                                                               $187,431         $140,301
                                                                                              ==================== ================

Net income:
     General Partners                                                                                      $1,874           $1,403
     Limited Partners                                                                                     185,557          138,898
                                                                                              -------------------- ----------------
                                                                                                         $187,431         $140,301
                                                                                              ==================== ================

Net income per Limited Partnership unit                                                                     $2.65            $1.98

Weighted average number of units outstanding                                                               69,979           69,979
</TABLE>


                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL

                        THREE MONTHS ENDED MARCH 31, 1997
                                   (Unaudited)

<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                                                                           185,557                1,874          187,431
Distributions                                                                       (472,805)                       -     (472,805)
                                                          -----------------  ---------------- -------------------- ----------------
Balance March 31, 1997                                              69,979        $3,320,849              $81,759       $3,402,608
                                                          =================  ================ ==================== ================
</TABLE>

                             See accompanying notes.

<PAGE>

                         ATEL CASH DISTRIBUTION FUND II
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                            STATEMENTS OF CASH FLOWS

                            THREE MONTH PERIODS ENDED
                             MARCH 31, 1997 and 1996
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                                     1997               1996
                                                                                                     ----               ----
<S>                                                                                                    <C>                <C>
Operating activities:
Net income                                                                                               $187,431         $140,301
Adjustments to reconcile net income to net cash provided by operations:
     Depreciation and amortization                                                                        113,174          323,465
     Leveraged lease income                                                                                (6,069)          (4,823)
     Gain on sale of lease assets                                                                         (82,072)          (1,927)
     Provision for losses                                                                                   4,162            5,874
     Changes in operating assets and liabilities:
        Accounts receivable                                                                               (16,340)         (20,692)
        Accounts payable, general partner                                                                  (3,370)         (20,972)
        Accounts payable, other                                                                             7,739           26,151
        Accrued interest                                                                                   (5,910)          (6,177)
        Customer deposits                                                                                 (60,000)               -
        Unearned income                                                                                     6,205          (19,824)
                                                                                              -------------------- ----------------
Net cash provided by operations                                                                           144,950          421,376
                                                                                              -------------------- ----------------

Investing activities:
Reductions of net investment in direct financing leases                                                   209,530          220,195
Proceeds from sales of lease assets                                                                       463,411          101,769
                                                                                              -------------------- ----------------
Net cash provided by  investing activities                                                                672,941          321,964
                                                                                              -------------------- ----------------

Financing activities:
Repayment of non-recourse debt                                                                           (288,920)        (320,677)
Distributions to limited partners                                                                        (472,805)        (658,289)
                                                                                              -------------------- ----------------
Net cash used in financing activities                                                                    (761,725)        (978,966)
                                                                                              -------------------- ----------------

Net increase (decrease) in cash and cash equivalents                                                       56,166         (235,626)
Cash and cash equivalents at beginning of period                                                          989,337          874,714
                                                                                              -------------------- ----------------
Cash and cash equivalents at end of period                                                             $1,045,503         $639,088
                                                                                              ==================== ================

Supplemental disclosures of cash flow information:
Cash paid during the period for interest:                                                                 $45,286          $77,362
                                                                                              ==================== ================

Supplemental schedule of non-cash transaction:

Operating Lease assets reclassified to assets held for sale or lease                                                      $389,211
Less accumulated depreciation                                                                                             (286,178)
                                                                                                                   ----------------
                                                                                                                          $103,033
                                                                                                                   ================
</TABLE>

                             See accompanying notes.

<PAGE>

                         ATEL CASH DISTRIBUTION FUND II
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1997
                                   (Unaudited)


1. Summary of significant accounting policies:

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. Organization and partnership matters:

ATEL  Cash  Distribution  Fund  II,  a  California   Limited   Partnership  (the
Partnership),  was formed under the laws of the State of California on September
30, 1987, for the purpose of acquiring  equipment to engage in equipment leasing
and sales  activities.  Contributions  in the amount of $600 were received as of
September 30, 1987, $100 of which represented the General  Partners'  continuing
interest,  and $500 of which  represented the Initial Limited  Partner's capital
investment.

Upon the sale of the  minimum  amount of Units of Limited  Partnership  interest
(Units) of $1,200,000 and the receipt of the proceeds thereof on March 23, 1988,
the Partnership commenced operations.


3. Investment in equipment and leases:

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

<TABLE>
<CAPTION>
                                                                               Depreciation
                                                                               Expense or          Reclass-
                                         December 31,                         Amortization       ifications &         March 31,
                                              1996           Additions          of Leases        Dispositions           1997
                                              ----           ---------          ---------     ----------------          ----
<S>                                           <C>                  <C>             <C>                  <C>             <C>
Net investment in operating
   leases                                     $2,756,220                           ($113,174)           ($382,237)      $2,260,809
Net investment in direct
   financing leases                            1,774,588                            (209,530)                   -        1,565,058
Net investment in leveraged
   leases                                         93,925                               6,069                    -           99,994
Reserve for losses                               (59,809)          ($4,162)                -                  898          (63,073)
                                         ---------------- -----------------  ---------------- -------------------- ----------------
                                              $4,564,924           ($4,162)        ($316,635)           ($381,339)      $3,862,788
                                         ================ =================  ================ ==================== ================
</TABLE>


<PAGE>

                         ATEL CASH DISTRIBUTION FUND II
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1997
                                   (Unaudited)


3. Investment in equipment and leases (continued):

Operating leases:

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

<TABLE>
<CAPTION>
                                                              Balance                              Reclass-            Balance
                                                            December 31,                         ifications &         March 31,
        Equipment type                                          1996            Additions        Dispositions           1997
        --------------                                          ----            ---------        ------------           ----
<S>                                                             <C>                <C>                  <C>             <C>
Aircraft                                                        $3,164,533                              ($810,000)      $2,354,533
Mining                                                           1,316,547                                      -        1,316,547
Materials handling                                                 835,681                                      -          835,681
Manufacturing                                                      717,059                                      -          717,059
Data processing                                                    481,738                                      -          481,738
Communications                                                     331,071                                      -          331,071
Food processing                                                     80,832                                      -           80,832
Transportation                                                      45,525                                 (3,696)          41,829
Motor vehicles                                                      22,967                                      -           22,967
Furniture, fixtures and equipment                                   73,217                                (73,217)               -
                                                          -----------------  ---------------- -------------------- ----------------
                                                                 7,069,170                               (886,913)       6,182,257
Less accumulated depreciation                                   (4,312,950)        ($113,174)             504,676       (3,921,448)
                                                          -----------------  ---------------- -------------------- ----------------
                                                                $2,756,220         ($113,174)           ($382,237)      $2,260,809
                                                          =================  ================ ==================== ================
</TABLE>

Equipment on operating  leases was acquired in 1988,  1989, 1990, 1992, 1993 and
1994.

At March 31, 1997, the aggregate amounts of future minimum lease payments are as
follows:

       Year ending           Direct
      December 31,          Financing          Operating            Total

             1997              $712,230          $430,838           $1,143,068
             1998               115,204           272,615              387,819
             1999                 4,248           269,732              273,980
             2000                     -           202,299              202,299
                       -----------------  ---------------- --------------------
                               $831,682        $1,175,484           $2,007,166
                       =================  ================ ====================


<PAGE>

                         ATEL CASH DISTRIBUTION FUND II
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS

                                 MARCH 31, 1997
                                   (Unaudited)


4. 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
7.69% to 12.86%.

Future minimum principal payments of non-recourse debt are as follows:

          Year ending
          December 31,        Principal          Interest             Total

                  1997          $748,233           $92,509             $840,742
                  1998           230,049            61,609              291,658
                  1999           233,530            36,202              269,732
                  2000           193,133             9,566              202,699
                        -----------------  ---------------- --------------------
                              $1,404,945          $199,886           $1,604,831
                        =================  ================ ====================


5.  Related party transactions:

The terms of the Limited Partnership Agreement provide that the General Partners
and/or  their  Affiliates  are entitled to receive  certain  fees for  equipment
acquisition, management and resale and for management of the Partnership.

The General  Partners  earned  partnership  management  fees equal to 5% of cash
distributed  from  operations and equipment  management fees equal to 2% of full
payout lease rentals and 5% of operating  lease rentals  pursuant to the Limited
Partnership  Agreement.  The  amounts  earned in 1997 and 1996 were  $25,968 and
$40,220 respectively.

The Limited Partnership Agreement allows for the reimbursement of costs incurred
by ATEL in providing administrative services to the Partnership.  Administrative
services provided include  partnership  accounting,  investor  relations,  legal
counsel  and lease  and  equipment  documentation.  ATEL is not  reimbursed  for
services where it is entitled to receive a separate fee as compensation for such
services,  such as acquisition and disposition of equipment.  Reimbursable costs
incurred  by ATEL are  allocated  to the  Partnership  based  upon  actual  time
incurred by employees working on partnership  business and an allocation of rent
and other costs based on utilization studies.

In 1997 and 1996, the Partnership  reimbursed ATEL Financial Corporation $37,249
and  $23,541,   respectively,  for  costs  incurred  in  the  administration  of
Partnership business.




<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and
              Results of Operations

Capital Resources and Liquidity

Funds which have been  received,  but which have not yet been invested in leased
equipment, are invested in interest-bearing accounts or  high-quality/short-term
commercial paper.

The  Partnership's  primary  source of  liquidity  is cash  received  from lease
rentals and the sales of assets upon lease  terminations.  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.

As another source of liquidity, the Partnership has contractual obligations with
a diversified group of lessees for fixed lease terms at fixed rental amounts. As
the  initial  lease  terms  expire the  Partnership  will  re-lease  or sell the
equipment.  The future  liquidity  beyond the  contractual  minimum rentals will
depend on the General  Partner's  success in re-leasing or selling the equipment
as it comes off lease.

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.

All of the Partnership's non-recourse debt is paid by lease payments assigned to
the lenders. The assigned lease payments match the required payments on the debt
and such payments fully amortize the debt.

As of March 31, 1997, the  Partnership had borrowed  approximately  $21,700,000.
The remaining unpaid balance on those borrowings was  approximately  $1,405,000.
The borrowings are generally non-recourse to the Partnership,  that is, the only
recourse of the lender for a default by the lessee on the underlying  lease will
be to the equipment or corresponding lease acquired with the loan proceeds.  The
General Partners expect that aggregate  borrowings in the future will not exceed
40% of  aggregate  equipment  cost.  In any  event,  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 other than for
the acquisition of additional equipment. There were no such commitments at March
31, 1997.

The  Partnership  made a distribution of cash from operations in April 1997. The
amount of the  distribution  was $3.75 per Unit (which is equal to an annualized
rate of 3%).

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  significantly,  the lease rates that the Partnership
can obtain on future  leases will be expected to increase 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.


<PAGE>

Cash flows, 1997 vs. 1996

For the first three months of 1997,  lease rents and proceeds  from the sales of
lease assets were the  Partnership's  primary  sources of cash flows.  Operating
cash flows from lease  revenues  decreased  from $529,499 in 1996 to $327,128 in
1997,  a decrease  of  $202,371.  The  decrease  is mainly due to the effects of
terminated  leases.  The cost of assets on operating  leases has decreased  from
$9,494,837 in 1996 to $6,072,599 in 1997.

Cash flows from investing activities increased by $350,977 compared to 1996. The
increase was the result of a substantial increase in proceeds from sale of lease
assets.  Most of the assets sold were operating lease assets.  The original cost
of  operating  lease  assets  sold in the  first  quarter  of 1997 was  $996,571
compared  to $698,596 in 1996.  Proceeds  from asset sales are  expected to vary
from one period to another.

There were no  financing  sources of cash in either  1996 or 1997.  The net cash
used in financing  activities  decreased by $217,241.  Distributions  to limited
partners were reduced as a result of decreased  cash flows in the fourth quarter
of 1996.


Results of Operations

The results of operations in future periods may vary significantly from those of
the first  quarter  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.

Operations, 1997 vs. 1996

Compared to 1996,  operating lease revenues decreased by $157,235.  The revenues
decreased  (and are  expected  to  decrease  in future  periods)  as a result of
scheduled lease  terminations  and asset sales.  Direct financing lease revenues
decreased  due to these same  factors.  Other  income  decreased by $78,647 from
1996.  The  decrease  is due to a first  quarter  1996  cash  payment  from  the
bankruptcy of Rocky Mountain  Helicopters,  Inc.. The  partnership  continues to
have an unsecured claim against Rocky Mountain Helicopters, Inc. (RMH), a former
lessee of the partnership.  RMH filed for reorganization under Chapter 11 of the
U.S.  Bankruptcy  Code in 1993. In addition to the amounts  previously  received
from the RMH bankruptcy,  the partnership  received $77,654 in March 1996 and an
additional  $62,123 was received in April 1997. The  Partnership  may receive an
additional 2% to 5% of its unsecured claim of $776,654.

Depreciation  expense  relates to  operating  lease  assets and has  declined in
relation  to the total  amounts of such  assets  owned by the  Partnership.  The
original cost of such assets owned by the Partnership  decreased from $9,494,836
to $6,072,599 from March 31, 1996 to March 31, 1997.

Interest expense  decreased by $31,809 compared to 1996. This is a direct result
of decreased debt balances  compared to 1996.  These reductions of debt balances
resulted from scheduled debt payments.

Management  fees  decreased  from $40,220 in 1996 to $25,968 in 1997.  Equipment
management  fees are related to lease  revenues and are expected to decline over
time as those revenues decrease.  Partnership management fees are related to the
amounts of  distributions  of cash from  operations to Limited  Partners and are
expected  to decline  in future  periods as those  distributions  decrease  as a
result of asset sales.




<PAGE>

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.

No material legal  proceedings are currently  pending against the Partnership or
against  any  of  its  assets  except  for  the  bankruptcy  of  Rocky  Mountain
Helicopters,  Inc.  noted above in Part I, Item 2 under the caption  "Results of
Operations"  where the Partnership has undertaken legal action in pursuit of its
unsecured claim.

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 Sheet, March 31, 1997

                                Income statements for the three month periods
                                ended March 31, 1997 and 1996

                                Statement of changes in partners' capital for
                                the three months ended March 31, 1997

                                Statements of cash flows for the three month
                                periods ended March 31, 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 Fork 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:
May 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