<PAGE>   1
 
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                                 UNITED STATES
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                   FORM 10-K
 
(MARK ONE)

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
      SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
 
      FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
 
                                       OR
 
[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
      SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
 
      FOR THE TRANSITION PERIOD FROM ______________ TO ______________
 
                          COMMISSION FILE NO. 33-13437
 
                         DEL TACO INCOME PROPERTIES IV
                       (A CALIFORNIA LIMITED PARTNERSHIP)
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                            <C>
 
                  CALIFORNIA                                     33-0241855
       (STATE OR OTHER JURISDICTION OF                        (I.R.S. EMPLOYER
        INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NUMBER)
 
         23041 AVENIDA DE LA CARLOTA,
           LAGUNA HILLS, CALIFORNIA                                92653
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                      (ZIP CODE)
</TABLE>
 
       Registrant's telephone number, including area code: (949) 462-9300
 
        Securities registered pursuant to section 12(b) of the Act: None
 
        Securities registered pursuant to section 12(g) of the Act: None
 
     Indicate by 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
 
     Portions of the registrant's Form S-11 Registration Statement filed June 5,
1987 are incorporated by reference into Part IV of this report.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>   2
                                     PART I

ITEM 1. BUSINESS

The partnership is a publicly-held limited partnership organized under the
California Uniform Limited Partnership Act. The partnership's General Partner is
Del Taco, Inc., a California corporation ("General Partner"). The partnership
sold 165,415 units totaling $4.135 million through an offering of limited
partnership units from June 1987 through June 1988. The term of the partnership
agreement is until December 31, 2027 unless terminated earlier by means provided
in the partnership agreement.

The business of the partnership is ownership and leasing of restaurants in
California to Del Taco, Inc. The partnership acquired land and constructed three
Mexican-American restaurants for long-term lease to Del Taco, Inc. Each property
is leased for 32 years on a triple net basis. Rent is equal to twelve percent of
gross sales of the restaurants. As of December 31, 1998, the partnership had a
total of three properties leased to Del Taco (Del Taco, in turn, has sub-leased
one of the restaurants to a Del Taco franchisee).

The partnership has no full time employees. The partnership agreement assigns
full authority for general management and supervision of the business affairs of
the partnership to the General Partner. The General Partner has a one percent
interest in the profits or losses and distributions of the partnership. Limited
partners have no right to participate in the management or conduct of the
partnership's business affairs.



                                       2

<PAGE>   3

ITEM 2. PROPERTIES

The partnership has acquired three properties with proceeds obtained from the
sale of limited partnership units:

<TABLE>
<CAPTION>
                                                                                      Date of
                                          Date of               Restaurant            Commencement
Address              City, State          Acquisition           Constructed           of Operation(1)
-------              -----------          -----------           -----------           ---------------
<S>                  <C>                  <C>                   <C>                   <C>
Orangethorpe Avenue  Placentia, CA        August 5, 1988        60 seat with drive    March 27, 1989
                                                                through service
                                                                window

Lakeshore Drive      Lake Elsinore, CA    February 1, 1989      60 seat with drive    April 18, 1990(2)
                                                                through service  
                                                                window

Highland Avenue      San Bernardino, CA   December 8, 1989      60 seat with drive    July 13, 1990
                                                                through service 
                                                                window
</TABLE>

------------
(1)     Commencement of operation is the first date Del Taco, Inc., as lessee,
        operated the facility on the site as a Del Taco restaurant.

(2)     The restaurant is subleased to a franchisee of Del Taco, Inc. and the 
        restaurant operates as a Del Taco restaurant.


                                     PART II

ITEM 3. LEGAL PROCEEDINGS

The partnership is not a party to any material pending legal proceedings.


ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. MARKET FOR THE PARTNERSHIP'S COMMON EQUITY AND RELATED SECURITY HOLDER
        MATTERS

The partnership sold 165,415 ($4,135,375) limited partnership units during the
public offering period ended June 3, 1988 and currently has 344 limited partners
of record. There is no public market for the trading of the units. Distributions
made by the partnership to the limited partners during the past three fiscal
years are described in Note 7 to the Notes to the Financial Statements contained
under Item 8.


                                       3

<PAGE>   4

ITEM 6. SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                     FOR THE YEAR ENDED DECEMBER 31,
                                 -------------------------------------------------------------------------
                                   1998             1997            1996            1995            1994
                                 --------         --------        --------        --------        --------
<S>                              <C>              <C>             <C>             <C>             <C>     
Rental revenue                   $398,071         $327,956        $361,980        $275,561        $273,076

Interest and other income           2,455            2,326           1,244           1,193           1,792

Net income                        254,610          187,583         219,223         134,697         135,669

Net income
  per limited
  partnership
  unit (1)                          1.52             1.12            1.31             .81              .81

Cash distributions
  per limited
  partnership
  unit (2)(3)(4)(5)(6)              1.83             1.70            1.74            1.45            2.00

Total assets                   2,298,687        2,334,746       2,429,366       2,495,331       2,603,405

Long-term obligations            137,953          137,953         137,953         137,953         137,953
</TABLE>

----------------
(1)   The net income per limited partnership unit was calculated based upon
      165,415 weighted average units outstanding for all years presented.

(2)   Cash distributions for the quarter ended December 31, 1994 amounted to
      $.40 per limited partnership unit and were paid January 17, 1995. Five
      quarterly distributions were disbursed during the year ended December 31,
      1994.

(3)   Cash distributions for the quarter ended December 31, 1995 amounted to
      $.40 per limited partnership unit and were paid January 17, 1996. Four
      distributions were disbursed during the year ended December 31, 1995.


                                       4

<PAGE>   5

ITEM 6. SELECTED FINANCIAL DATA - CONTINUED

(4)   Cash distributions for the quarter ended December 31, 1996 amounted to
      $.41 per limited partnership unit and were paid January 31, 1997. Four
      distributions were disbursed during the year ended December 31, 1996.

(5)   Cash distributions for the quarter ended December 31, 1997 amounted to
      $.41 per limited partnership unit and were paid January 31, 1998. Four
      quarterly distributions were disbursed during the year ended December 31,
      1997.

(6)   Cash distributions for the quarter ended December 31, 1998 amounted to
      $.47 per limited partnership unit and were paid January 31, 1999. Four
      distributions were disbursed during the year ended December 31, 1998.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

Liquidity and Capital Resources

The partnership offered limited partnership units for sale between June 1997 and
June 1988. 14.5% of the $4.135 million raised through sale of limited
partnership units was used to pay commissions to brokers and to reimburse the
General Partner for offering costs incurred. Approximately $3 million of the
remaining funds were used to acquire sites and build three restaurants. In
February of 1992, approximately $442,000 raised during the offering but not
required to acquire sites and build restaurants was distributed to the limited
partners.

The three restaurants leased to Del Taco make up almost all of the income
producing assets of the partnership. Therefore, the business of the partnership
is almost entirely dependent on the success of the Del Taco trade name
restaurants that lease the properties. The success of the restaurants is
dependent on a large variety of factors, including, but not limited to, consumer
demand and preference for fast food, in general, and for Mexican-American food
in particular.

Results of Operations

The partnership owns three properties that are under long-term lease to Del Taco
for restaurant operations (Del Taco, in turn, has sub-leased one of the
restaurants to a Del Taco franchisee).


                                       5

<PAGE>   6

Results of Operations - Continued

The following table sets forth rental revenue earned by restaurant for the year:

<TABLE>
<CAPTION>

                                                     YEAR ENDED DECEMBER 31,
                                            -----------------------------------------
                                              1998             1997            1996
                                            --------         --------        --------
<S>                                         <C>              <C>             <C>     
Orangethorpe Ave., Placentia, CA            $172,184         $142,585        $163,697

Lakeshore Drive, Lake Elsinore, CA           144,180          119,218         130,479

Highland Ave., San Bernardino, CA             81,707           66,153          67,804
                                            --------         --------        --------

            Total                           $398,071         $327,956        $361,980
                                            ========         ========        ========
</TABLE>

The partnership receives rental revenues equal to 12 percent of gross sales from
the restaurants. The partnership earned rental revenue of $398,071 during the
year ended December 31, 1998, which represents an increase of $70,115 from 1997.
The increase in rental revenue was caused by an increase in sales and
supplemental rent at the restaurants under lease.

The following table breaks down general and administrative expenses by type of
expense:

                 PERCENTAGE OF TOTAL GENERAL & ADMIN. EXPENSE

<TABLE>
<CAPTION>
                                    
                                              Year Ended December 31,
                                      -------------------------------------
                                        1998           1997            1996
                                      --------       --------        ------
<S>                                    <C>            <C>             <C>   
Accounting fees                        39.25%         38.00%          41.12%
Distribution of
   information to limited partners     58.85          59.95           55.77
Other                                   1.90           2.05            3.11
                                       -----          -----           -----
                                       100.0%         100.0%          100.0%
                                       =====          =====           =====
</TABLE>

General and administrative costs increased from 1997 to 1998 due to increased
costs for printing and distribution of documents.

Net income increased by $67,027 from 1997 to 1998 due to the increase in
revenues of $70,244 which was partially offset by the $3,217 increase in general
and administrative expenses.

The General Partner does not believe the operations of the partnership will be
significantly impacted by the year 2000 software issue and does not believe the
year 2000 software issue will materially effect the partnerships operations,
financial position or cash flows.

On May 19, 1998, the special limited partner resigned. Consistent with the
partnership agreement, the General Partner assumed the duties and
responsibilities of the special limited partner.


                                       6

<PAGE>   7

ITEM 8. FINANCIAL STATEMENTS

PART I.  INFORMATION



              INDEX                                                 PAGE NUMBER
              -----                                                 -----------
Report of Independent Public Accountants                                  8

Balance Sheets at December 31, 1998 and 1997                              9

Statements of Income for the years ended
  December 31, 1998, 1997 and 1996                                       10

Statement of Changes in Partners' Equity for
  the three years ended December 31, 1998                                11

Statements of Cash Flows for the years ended
  December 31, 1998, 1997 and 1996                                       12

Notes to Financial Statements                                          13-17



                                       7

<PAGE>   8
                              ARTHUR ANDERSEN LLP

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Partners of
  Del Taco Restaurant Properties, IV:

We have audited the accompanying balance sheets of Del Taco Restaurant 
Properties IV (a California Limited Partnership) as of December 31, 1998 and 
1997, and the related statements of income, changes in partners' equity and cash
flows for each of the three years in the period ended December 31, 1998. These 
financial statements and the schedule referred to below are the responsibility 
of the Partnership's management. Our responsibility is to express an opinion on 
these financial statements.

We conducted our audits in accordance with generally accepted auditing 
standards. Those standards required that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
from material misstatement. An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. An 
audit also includes assessing the accounting principles used and significant 
estimates made by management, as well as evaluating the overall financial 
statement presentation. We believe that our audits provide a reasonable basis 
for our opinion.

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the financial position of Del Taco Restaurant Properties 
IV as of December 31, 1998 and 1997, and the results of its operations and its 
cash flows for each of the three years in the period ended December 31, 1998, 
in conformity with generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic 
financial statements taken as a whole. The schedule in the index of the 
financial statements is presented for purposes of complying with the Securities 
and Exchange Commission's rules and is not part of the basic financial 
statements. This schedule has been subjected to the auditing procedures applied 
in our audits of the basic financial statements and, in our opinion, fairly 
states in all material respects, the financial data required to be set forth 
therein in relation to the basic financial statements taken as a whole.


                                            /s/ ARTHUR ANDERSEN LLP
                                            -----------------------------------
                                                ARTHUR ANDERSEN LLP


Orange County, California
February 12, 1999

                                       8

<PAGE>   9

                          DEL TACO INCOME PROPERTIES IV

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                        DECEMBER 31,
                                               -----------------------------
                                                   1998              1997
                                               -----------       -----------
                                     ASSETS
<S>                                            <C>               <C>        
CURRENT ASSETS:
  Cash                                         $   101,404       $    75,411
  Receivable from Del Taco, Inc. (Note 5)          106,724            65,132
  Deposits                                             504               400
                                               -----------       -----------
     Total current assets                          208,632           140,943
                                               -----------       -----------

PROPERTY AND EQUIPMENT, AT COST (NOTE 1):
  Land and improvements                          1,236,700         1,236,700
  Buildings and improvements                     1,289,860         1,289,860
  Machinery and equipment                          484,789           484,789
                                               -----------       -----------
                                                 3,011,349         3,011,349
    Less: accumulated depreciation                 921,294           817,546
                                               -----------       -----------
                                                 2,090,055         2,193,803
                                               -----------       -----------

                                               $ 2,298,687       $ 2,334,746
                                               ===========       ===========

                        LIABILITIES AND PARTNERS' EQUITY

CURRENT LIABILITIES:
  Payable to limited partners                  $    18,684       $     2,503
  Accounts payable                                   5,271             6,130
                                               -----------       -----------
     Total current liabilities                      23,955             8,633
                                               -----------       -----------

OBLIGATION TO GENERAL PARTNER (NOTE 3)             137,953           137,953
                                               -----------       -----------

PARTNERS' EQUITY (NOTE 2):
  Limited partners                               2,146,545         2,197,413
  General Partner - Del Taco, Inc.                  (9,766)           (9,253)
                                               -----------       -----------
                                                 2,136,779         2,188,160
                                               -----------       -----------

                                               $ 2,298,687       $ 2,334,746
                                               ===========       ===========
</TABLE>


                          The accompanying notes are an
                  integral part of these financial statements.

                                       9

<PAGE>   10

                          DEL TACO INCOME PROPERTIES IV

                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                         YEAR ENDED DECEMBER 31,
                                  ------------------------------------
                                    1998          1997          1996
                                  --------      --------      --------
<S>                               <C>           <C>           <C>     
REVENUES:
  Rent (Note 4)                   $398,071      $327,956      $361,980
  Interest                           1,555         1,651         1,194
  Other                                900           675            50
                                  --------      --------      --------
                                   400,526       330,282       363,224
                                  --------      --------      --------
EXPENSES:
  General and administrative        42,168        38,951        40,251
  Depreciation                     103,748       103,748       103,750
                                  --------      --------      --------
                                   145,916       142,699       144,001
                                  --------      --------      --------

Net income                        $254,610      $187,583      $219,223
                                  ========      ========      ========
Net income per limited
  partnership unit (Note 1)       $   1.52      $   1.12      $   1.31
                                  ========      ========      ========
</TABLE>

                          The accompanying notes are an
                  integral part of these financial statements.

                                       10

<PAGE>   11

                          DEL TACO INCOME PROPERTIES IV

                    STATEMENT OF CHANGES IN PARTNERS' EQUITY

                       THREE YEARS ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
                                               Limited Partners 
                                         ---------------------------           General
                                          Units             Amount             Partner              Total 
                                         --------        -----------         -----------         -----------
<S>                                       <C>            <C>                 <C>                 <C>        
Balance, December 31, 1995                165,415        $ 2,362,487          $ (7,586)          $ 2,354,901
   Net income                                  --            217,031             2,192               219,223
   Cash distributions (Note 7)                 --           (285,862)           (2,887)             (288,749)
                                         --------        -----------          --------           -----------
Balance, December 31, 1996                165,415          2,293,656            (8,281)            2,285,375
   Net income                                  --            185,707             1,876               187,583
   Cash distributions (Note 7)                 --           (281,950)           (2,848)             (284,798)
                                         --------        -----------          --------           -----------
Balance, December 31, 1997                165,415          2,197,413            (9,253)            2,188,160
   Net income                                  --            252,064             2,546               254,610
   Cash distributions (Note 7)                 --           (302,932)           (3,059)             (305,991)
                                         --------        -----------          --------           -----------
Balance, December 31, 1998                165,415        $ 2,146,545          $ (9,766)          $ 2,136,779
                                         ========        ===========          ========           ===========
</TABLE>


                          The accompanying notes are an
                  integral part of these financial statements.


                                       11
<PAGE>   12

                          DEL TACO INCOME PROPERTIES IV

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                        YEAR ENDED DECEMBER 31,
                                                            ---------------------------------------------
                                                               1998             1997               1996
                                                            ---------         ---------         ---------
<S>                                                         <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income                                                  $ 254,610         $ 187,583         $ 219,223
Adjustments to reconcile net income to
  net cash provided by operating activities:
  Depreciation                                                103,748           103,748           103,750
  Increase (decrease) in payable to limited partners           16,181              (535)            1,387
  Increase in receivable from General Partner                 (41,592)          (13,574)          (31,471)
  (Decrease) increase in accounts payable                        (859)            3,130             2,175
  Increase in deposits                                           (104)               --                --
                                                            ---------         ---------         ---------

    Net cash provided by operating activities                 331,984           280,352           295,064

CASH FLOWS FROM FINANCING ACTIVITIES:

Cash distributions to partners                               (305,991)         (284,798)         (288,749)
                                                            ---------         ---------         ---------

NET INCREASE (DECREASE) IN CASH                                25,993            (4,446)            6,315

BEGINNING CASH BALANCE                                         75,411            79,857            73,542
                                                            ---------         ---------         ---------

ENDING CASH BALANCE                                         $ 101,404         $  75,411         $  79,857
                                                            =========         =========         =========
</TABLE>


                          The accompanying notes are an
                  integral part of these financial statements.


                                       12

<PAGE>   13

                          DEL TACO INCOME PROPERTIES IV

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1998


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

THE PARTNERSHIP: Del Taco Income Properties IV (a California limited
partnership) was formed on March 23, 1987, for the purpose of acquiring real
property in California for construction of three Mexican-American restaurants to
be leased under long-term agreements to Del Taco, Inc. (General Partner for
operation under the Del Taco trade name).

BASIS OF ACCOUNTING: The partnership utilizes the accrual method of accounting
for transactions relating to the business of the partnership. Distributions are
made to the General and limited partners in accordance with the provisions of
the partnership agreement (see Note 2).

PROPERTY AND EQUIPMENT: Property and equipment is stated at cost. Depreciation
is computed using the straight-line method over estimated useful lives which are
20 years for land improvements, 35 years for buildings and improvements, and 10
years for machinery and equipment.

In fiscal 1996, the partnership adopted Statement of Financial Accounting
Standards (SFAS) No. 121, "Accounting for the Impairment of Long Lived Assets
and for Long Lived Assets to be Disposed of." SFAS 121 requires that long-lived
assets be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying value of the asset may not be recoverable. In
evaluating long-lived assets held for use, an impairment loss is recognized if
the sum of the expected future cash flows (undiscounted and without interest
charges) is less than the carrying value of the asset. Once a determination has
been made that an impairment loss should be recognized for long-lived assets,
various assumptions and estimates are used to determine fair value including,
among others, estimated costs of construction and development, recent sales of
comparable properties and the opinions of fair value prepared by independent
real estate appraisers. Long-lived assets to be disposed of are reported at the
lower of carrying amount or fair value less cost to sell.

The adoption of SFAS No. 121 did not have a material effect on the partnership's
financial statements.

INCOME TAXES: No provision has been made for federal or state income taxes on
partnership net income, since the partnership is not subject to income tax.
Partnership income is includable in the taxable income of the individual
partners as required under applicable income tax laws. Certain items, primarily
related to depreciation methods, are accounted for differently for income tax
reporting purposes (see Note 6).


                                       13

<PAGE>   14

DEL TACO INCOME PROPERTIES IV
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1998


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

NET INCOME PER LIMITED PARTNERSHIP UNIT: Net income per limited partnership unit
is calculated based upon 165,415 weighted average units outstanding for all
years presented.

USE OF ESTIMATES: The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

NOTE 2 - PARTNERS' EQUITY

Pursuant to the partnership agreement, annual partnership net income or loss is
allocated one percent to the General Partner and 99 percent to the limited
partners. Partnership gains from any sale or refinancing will be allocated one
percent to the General Partner and 99 percent to the limited partners until
allocated gains and profits equal losses, distributions and syndication costs,
and until each class of limited partners receive their priority return as
defined in the partnership agreement. Additional gains will be allocated 12
percent to the General Partner and 88 percent to the limited partners.

NOTE 3 - SITE SELECTION AND DEVELOPMENT FEE

Under terms of the partnership agreement, the General Partner is entitled to
receive a fee in an amount equal to five percent of the gross proceeds of the
offering. The fee shall be for services rendered in connection with site
selection and the design and supervision of construction of improvements to
acquired properties. One percent of the gross proceeds of the offering has been
paid to the General Partner. The remaining four percent of this fee shall be
earned at the time the services are rendered, but shall not be paid and shall be
subordinated to the limited partners' interests until all restaurants have
opened and the limited partners have received certain minimum returns on their
investment, as required by the partnership agreement. It is the policy of the
partnership to accrue the site selection and development fee as an obligation to
the General Partner. No fees were earned for such services during 1998, 1997 and
1996.


                                       14

<PAGE>   15

DEL TACO INCOME PROPERTIES IV
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1998


NOTE 4 - LEASING ACTIVITIES

The partnership leases certain properties for operation of restaurants to Del
Taco, Inc. on a triple net basis. The leases are for terms of 32 years
commencing with the completion of the restaurant facility located on each
property and require monthly rentals equal to 12 percent of the gross sales of
the restaurants. Supplemental rent (as defined in the partnership agreement) may
be earned if certain criteria are met. There is no minimum rental under any of
the leases. The partnership had a total of three properties leased to Del Taco
as of December 31, 1998, 1997 and 1996 (Del Taco, in turn, has subleased one of
the restaurants to a Del Taco franchisee).

The two restaurants operated by Del Taco, for which the partnership is the
lessor, had combined, unaudited sales of $1,697,771, $1,523,099 and $1,452,047
and unaudited net income of $107,870, $76,600 and $68,556 for the years ended
December 31, 1998, 1997 and 1996, respectively. Net income by restaurant
includes charges for general and administrative expenses incurred in connection
with supervision of restaurant operations and interest expense. The one
restaurant operated by a Del Taco franchisee, for which the partnership is the
lessor, had unaudited sales of $970,008, $874,554 and $835,362 for the years
ended December 31, 1998, 1997 and 1996, respectively.

The Highland Avenue restaurant in Highland (San Bernardino), California had
unaudited net income of $7,339 and net losses of $4,311 and $14,043 for the
years ended December 31, 1998, 1997 and 1996, respectively.

NOTE 5 - RELATED PARTIES

The receivable from Del Taco consists of rent accrued for the month of December
1998 as well as supplemental rent. These amounts were collected on January 17,
1999.

The General Partner received $3,059 in distributions relating to its one percent
interest in the partnership for the year ended December 31, 1998.

Del Taco, Inc. serves in the capacity of General Partner in other partnerships
which are engaged in the business of operating restaurants, and three other
partnerships which were formed for the purpose of acquiring real property in
California for construction of Mexican-American restaurants for lease under
long-term agreements to Del Taco, Inc. for operation under the Del Taco trade
name.


                                       15

<PAGE>   16

DEL TACO INCOME PROPERTIES IV
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1998


NOTE 6 - INCOME TAXES

A reconciliation of financial statement net income to taxable income for each of
the periods is as follows:

<TABLE>
<CAPTION>
                                            1998           1997           1996
                                           --------      --------       --------
<S>                                        <C>           <C>            <C>     
Net income per financial statements        $254,610      $187,583       $219,223

Excess book depreciation                     63,144        48,537         27,151
                                          ---------     ---------      ---------

Taxable income                             $317,754      $236,120       $246,374
                                           ========      ========       ========
</TABLE>

A reconciliation of partnership equity per the financial statements to net worth
for tax purposes as of December 31, 1998, is as follows:

Partners' equity per financial statements                     $2,136,779

Issue costs of limited partnership
  units capitalized for tax purposes                             579,259

Excess tax depreciation                                           73,111
                                                              ----------
Net worth for tax purposes                                    $2,789,149
                                                              ==========


                                       16

<PAGE>   17

DEL TACO INCOME PROPERTIES IV
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1998


NOTE 7 - CASH DISTRIBUTIONS TO LIMITED PARTNERS

Cash distributions paid to limited partners for the three years ended December
31, 1998 were as follows:

<TABLE>
<CAPTION>
                                                                    Weighted              Number
                                                Cash                Weighted             of Units
                                         Distributions per       Average Number       Outstanding at
                                        Limited Partnership         of Units            the End of
Quarter Ended                                   Unit              Outstanding            Quarter
-------------                           ---------------------   -----------------    -----------------
<S>                                            <C>                   <C>                   <C>    
December 31, 1995                              $  .40                165,415               165,415
March 31, 1996                                    .32                165,415               165,415
June 30, 1996                                     .65                165,415               165,415
September 30, 1996                                .37                165,415               165,415
                                               ------
  Total paid in 1996                           $ 1.74
                                               ======

December 31, 1996                                 .41                165,415               165,415
March 31, 1997                                    .49                165,415               165,415
June 30, 1997                                     .37                165,415               165,415
September 30, 1997                                .43                165,415               165,415
                                               ------
  Total paid in 1997                           $ 1.70
                                               ======

December 31, 1997                              $  .41                165,415               165,415
March 31, 1998                                    .53                165,415               165,415
June 30, 1998                                     .41                165,415               165,415
September 30, 1998                                .48                165,415               165,415
                                               ------
  Total paid in 1998                           $ 1.83
                                               ======
</TABLE>

Cash distributions per limited partnership unit were calculated based upon the
weighted average number of units outstanding for each quarter and were paid from
operations. Cash distributions for the quarter ended December 31, 1998 amounted
to $.47 per limited partnership unit and were paid January 31, 1999.


                                       17

<PAGE>   18

                                    PART III


ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP'S GENERAL PARTNER

(a) & (b) The executive officers and directors of the General Partner and their
ages are set forth below:

<TABLE>
<CAPTION>

Name                         Title                                                Age
----                         -----                                                ---
<S>                          <C>                                                  <C>
Kevin K. Moriarty            Director, Chairman and Chief Executive Officer       52

C. Ronald Petty              President                                            54

Paul W. Hitzelberger         Executive Vice President, Brand Strategy and
                                Franchise Relations/Development                   54

Robert J. Terrano            Executive Vice President and
                                Chief Financial Officer                           43

James D. Stoops              Executive Vice President, Operations                 46

Janet D. Simmons             Senior Vice President, Purchasing                    42

Michael L. Annis             Vice President, Secretary and General Counsel        52

C. Douglas Mitchell          Vice President and Corporate Controller              48

Annette D. Shehan            Vice President, Marketing                            37

Shirlene Lopez               Vice President, Corporate Development                34
</TABLE>


The above referenced executive officers and directors of the General Partner
will hold office until the annual meeting of its shareholders and directors,
which is scheduled for the later part of 1999.

(c)   None

(d)   No family relationship exists between any such director or executive
      officer of the General Partner.

(e)   The following is an account of the business experience during the past
      five years of each such director and executive officer:


                                       18

<PAGE>   19

KEVIN K. MORIARTY, Director, Chairman and Chief Executive Officer of Del Taco,
Inc. Mr. Moriarty began his career with Burger King Corporation in 1974 in
Operations Unit Management. In 1983, he was promoted to Area Manager in New
York, and was subsequently promoted to the Regional Vice President, Chicago
Region in 1985. In 1988, he became Executive Vice President and General Manager
of the North Central Division. Mr. Moriarty served in that position until 1990
when he joined Del Taco, Inc. as President and Chief Executive Officer on July
31, 1990. Mr. Moriarty has served as a Director of the General Partner since
1990.

C. RONALD PETTY, President of Del Taco, Inc. Mr. Petty began his career in the
restaurant business in 1973 with McDonald's Corporation. He was employed by
McDonald's in a real estate capacity until 1978. For the next 12 years, Mr.
Petty was in various officer positions with Burger King. These positions
included Vice President of Real Estate, Sr. Vice President of Development,
Region Vice President, Sr. Vice President European Operations, President of
International and President of U.S. Mr. Petty served as President of Miami Subs
from 1990-1992; President and CEO of Denny's 1993-1996; President and CEO of
Peter Piper Pizza 1996-1998; President of Del Taco December 1998-present.

PAUL W. HITZELBERGER, Executive Vice President, Brand Strategy and Franchise
Relations/Development of Del Taco, Inc. He was appointed to his current position
in December 1995. Mr. Hitzelberger has responsibility for franchise development,
relations and training and will oversee public relations and training for the
corporation. From 1991 to 1995, Mr. Hitzelberger was Executive Vice President,
Marketing of Del Taco, Inc. From September 1988 through September 1989, Mr.
Hitzelberger was Chief Executive Officer of Environmental Marketing Group. Prior
to that, Mr. Hitzelberger was a Vice President of Del Taco, Inc. Prior to
joining Del Taco, Inc., he served as Vice President - Marketing at the
department store division of Lucky Stores, Inc., a major supermarket retailer.
Prior to his position with Lucky, Mr. Hitzelberger held various positions in
marketing and retailing at Wallpapers to Go, Inc., a division of General Mills,
Inc., and Coast to Coast Stores, Inc. a subsidiary of Household Merchandising,
Inc. Mr. Hitzelberger received a Master of Business Administration degree from
Loyola University in Chicago, Illinois.

ROBERT J. TERRANO, Executive Vice President and Chief Financial Officer of Del
Taco, Inc. From May 1994 to April 1995, Mr. Terrano served as Chief Financial
Officer for Denny's, Inc. in Spartanburg, S.C. From August 1983 to May 1994, he
served with Burger King Corporation, Miami Florida, in a variety of positions,
most recently as Division Controller. Mr. Terrano joined Del Taco, Inc. in April
1995.

JAMES D. STOOPS, Executive Vice President, Operations of Del Taco, Inc. From
1968 to 1991, Mr. Stoops served in a wide variety of Operations positions with
Burger King Corporation with increasing levels of responsibility. In 1985, Mr.
Stoops was appointed Region Vice President/General Manager for the New York
region and served in that position until October of 1990. In January of 1991, he
joined Del Taco, Inc. in his current post.

JANET D. SIMMONS, Senior Vice President, Purchasing of Del Taco, Inc. From 1979
to 1986, Ms. Simmons was with Denny's Inc. She served in the Research and
Development department in a variety of positions until 1982 when she was
promoted to the position of Purchasing Agent. Ms. Simmons was hired in 1986 as
Manager of Contract Purchasing with Carl Karcher Enterprises, a post she held
until March 1990 when she became Vice President, Purchasing for Del Taco, Inc.
Ms. Simmons has a Bachelor of Science degree in Foods and Nutrition from Cal
State Polytechnic University in Pomona, California.


                                       19

<PAGE>   20

MICHAEL L. ANNIS, Vice President, Secretary and General Counsel of Del Taco,
Inc. From 1981 to 1986 Mr. Annis served as Regional Real Estate Manager and
Director of Real Estate Services with Taco Bell, Inc. In 1986 he served as
Regional General Manager with Quaker State Minit Lube. In January of 1987 Mr.
Annis joined Red Robin International, Inc. as General Counsel and was
subsequently promoted to Vice President/Secretary and later Vice President Real
Estate Development/Secretary and General Counsel, the position he held until
joining Del Taco, Inc. in December of 1993. Mr. Annis received his J.D. Degree
from Whittier College.

C. DOUGLAS MITCHELL, Vice President and Corporate Controller. Mr. Mitchell
joined Del Taco, Inc. in August of 1994 as Controller and was promoted to his
current position in January 1996. From 1990 to 1994, Mr. Mitchell was a Senior
Audit Manager with Coopers & Lybrand. Prior to 1990, Mr. Mitchell held various
positions in finance and accounting with the Geneva Companies (a subsidiary of
Chemical Bank), Zaremba Corporation (a real estate developer) and The Dexter
Corporation (an international manufacturer of specialty materials). Mr. Mitchell
has a Bachelor of Science degree with a major in accounting from the University
of Southern California.

ANNETTE D. SHEHAN, Vice President, Marketing of Del Taco, Inc. From 1984-1994
Ms. Shehan was with Jack In The Box Restaurants where she held various positions
in Research & Development, Product Marketing and Advertising/Media. Ms. Shehan
was hired in 1994 as Manager of Broadcast Advertising with HomeBase, Inc. a home
improvement retailer, a post she held until 1998 when she became Vice President,
Marketing for Del Taco, Inc. Ms. Shehan has a Bachelor of Science Degree in Food
Science from California Polytechnic University, San Luis Obispo and a Master of
Business Administration from San Diego State University.

SHIRLENE LOPEZ, Vice President, Corporate Development & Design of Del Taco, Inc.
Ms. Lopez began her career with Del Taco in 1978 as an hourly employee and
advanced through the ranks to General Manager in 1984. Ms. Lopez was promoted to
the corporate office in 1989 as Human Resource Manager in support of the field
and office manager. In 1994, she was promoted to Executive Project Manager of
reporting to the CEO and in 1996, to Director of Corporate Development in charge
of all interior image and design. Ms. Lopez has held her current position since
August 1997.

ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS

The partnership has no executive officers or directors and pays no direct
remuneration to any executive officer or director of its General Partner. The
partnership has not issued any options or stock appreciation rights to any
executive officer or director of its General Partner, nor does the partnership
propose to pay any annuity, pension or retirement benefits to any executive
officer or director of its General Partner. The partnership has no plan, nor
does the partnership presently propose a plan, which will result in any
remuneration being paid to any executive officer or director of the General
Partner upon termination of employment.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a)   No person of record currently owns more than five percent of limited
      partnership units of the partnership, nor was any person known of by the
      partnership to own of record and beneficially, or beneficially only, more
      than five percent of such securities.

(b)   Neither Del Taco, Inc., nor any executive officer or director of Del Taco,
      Inc. owns any limited partnership units of the partnership.


                                       20

<PAGE>   21

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT -
         (CONTINUED)

(c)   The partnership knows of no contractual arrangements, the operation or the
      terms of which may at a subsequent date result in a change in control of
      the partnership, except for provisions in the partnership agreement
      providing for removal of the General Partner by holders of a majority of
      the limited partnership units and if a material event of default occurs
      under the financing agreements of the General Partner.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

(a)   No transactions have occurred between the partnership and any executive
      officer or director of its General Partner.

      During 1998, the following transactions occurred between the partnership
      and the General Partner pursuant to the terms of the partnership
      agreement.

      (1) The General Partner earned $2,546 as its one percent share of the net
          income of the partnership.

      (2) The General Partner received $3,059 in distributions relating to its
          one percent interest in the partnership.

(b)   During 1998, the partnership had no business relationships with any entity
      of a type required to be reported under this item.

(c)   Neither the General Partner, any director or officer of the General
      Partner or any associate of any such person, was indebted to the
      partnership at any time during 1998 for any amount in excess of $60,000.

(d)   Not applicable.


                                       21

<PAGE>   22

                                     PART IV


ITEM 14(A)(1) AND (2). EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON
                       FORM 8-K

      Financial statement schedules:

             Schedule III - Real Estate and Accumulated Depreciation

      Financial statement schedules other than those referred to above have
      been omitted because they are not applicable or not required.

(b)   No reports on Form 8-K were filed during the last quarter of 1998.

(c)   Exhibits required by Item 601 of Regulation S-K:

      1.       Incorporated herein by reference, Restated Agreement of Limited
               Partnership of Del Taco Income Properties IV filed as Exhibit
               3.01 to Partnership's Registration Statement on Form S-11 as
               filed with the Securities and Exchange Commission on June 5,
               1987.

      2.       Incorporated herein by reference, Amendment to Restated Agreement
               of Limited Partnership of Del Taco Income Properties IV.

      3.       Incorporated herein by reference, Form of Standard Lease to be
               entered into by Partnership and Del Taco, Inc., as lessee, filed
               as Exhibit 10.02 to Partnership's Registration Statement on Form
               S-11 as filed with the Securities and Exchange Commission on June
               5, 1987.



                                       22

<PAGE>   23
                DEL TACO RESTAURANT PROPERTIES IV - SCHEDULE III

                    REAL ESTATE AND ACCUMULATED DEPRECIATION
                                DECEMBER 31, 1998
<TABLE>
<CAPTION>
                                                                                   Cost capitalized   Gross amount at
                                                         Initial cost                subsequent to    which carried at
                                                          to company                  acquisition     close of period
                                                  ---------------------------------------------------------------------
                                                     Land           Building &                        Land, buildings
   Description                                      & land           Improve-           Carrying      & improvements    Accumulated
(All Restaurants)                    Encumbrances  improvements       ments              costs             Total        depreciation
------------------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>           <C>             <C>                  <C>           <C>               <C>
Placentia, CA                             $--      $  465,933      $  485,961             $--           $  951,894      $  184,160
Lake Elsinore, CA                          --         449,058         486,361              --              917,419         177,491
San Bernardino, CA                         --         321,709         335,538              --              657,247         127,154
                                          -----------------------------------------------------------------------------------------
                                          $--      $1,236,700      $1,289,860             $--           $2,526,560      $  488,805
                                          =========================================================================================
</TABLE>

<TABLE>
<CAPTION>

                                                                Life on which
                                                            depreciation in latest
                                   Date of        Date         income statement
                                 Construction   acquired         is computed
                                 ------------   --------    ----------------------
<S>                               <C>           <C>         <C>
Placentia, CA                        1988         1988         20 (LI), 35 (BI)
Lake Elsinore, CA                    1989         1989         20 (LI), 35 (BI)
San Bernardino, CA                   1989         1989         20 (LI), 35 (BI)
</TABLE>


<TABLE>
<CAPTION>
                                                Accumulated
                                                Restaurants        Depreciation
                                                -----------        ------------
<S>                                             <C>                 <C>      
Balances at December 31, 1995:                  $ 2,526,560         $ 323,001
   Acquisitions                                          --            55,268
   Sales                                                 --                --
                                                -----------         ---------
Balances at December 31, 1996:                    2,526,560           378,269
   Acquisitions                                          --            55,268
   Sales                                                 --                --
                                                -----------         ---------
Balances at December 31, 1997:                    2,526,560           433,537
   Acquisitions                                          --            55,268
   Sales                                                 --                --
                                                -----------         ---------
Balances at December 31, 1998:                  $ 2,526,560         $ 488,805
                                                ===========         =========
</TABLE>


                                       23
<PAGE>   24

                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the partnership has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                               DEL TACO INCOME PROPERTIES IV
                                               a California limited partnership

                                               Del Taco, Inc.
                                               General Partner



Date March 07, 1999                            Kevin K. Moriarty
     --------------                            -----------------
                                               Kevin K. Moriarty
                                               Director, Chairman and Chief
                                               Executive Officer



Date March 07, 1999                            Michael L. Annis
     --------------                            ----------------
                                               Michael L. Annis
                                               Vice President, Secretary and
                                               General Counsel



Date March 07, 1999                            Robert J. Terrano
     --------------                            -----------------
                                               Robert J. Terrano
                                               Executive Vice President and
                                               Chief Financial Officer



Date March 07, 1999                            C. Douglas Mitchell
     --------------                            -------------------
                                               C. Douglas Mitchell
                                               Vice President and Corporate
                                               Controller


                                       24


<PAGE>   25

                                 EXHIBIT INDEX


EXHIBIT
NUMBER                 DESCRIPTION
-------                -----------

 27.1                  Financial Data Schedule