UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-K

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934

                  For The Fiscal Year Ended December 31, 1996

                                      or

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
    Exchange Act of 1934

                           Commission file #0-16790

                      Inland's Monthly Income Fund, L.P.
            (Exact name of registrant as specified in its charter)

       Delaware                                  36-3525989
(State of organization)       (I.R.S. Employer Identification Number)

2901 Butterfield Road, Oak Brook, Illinois        60521
(Address of principal executive office)          (Zip Code)

Registrant's telephone number, including area code:  630-218-8000

          Securities registered pursuant to Section 12(b) of the Act:

Title of each class:          Name of each exchange on which registered:
       None                                      None

       Securities registered pursuant to Section 12(g) of the Act:
                           LIMITED PARTNERSHIP UNITS
                               (Title of class)

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   

Indicate by check mark if disclosure  of delinquent filers pursuant to Item 405
of Regulation S-K is not contained  herein,  and  will not be contained, to the
best of registrant's knowledge,  in  definitive proxy or information statements
incorporated by reference in Part  III  of  this  Form 10-K or any amendment to
this Form 10-K. [X]

State the aggregate market value of  the  voting stock held by nonaffiliates of
the registrant. Not applicable.

The Prospectus of the Registrant dated August 3, 1987 as supplemented and filed
pursuant to  Rule  424(b)  and  424(c)  under  the  Securities  Act  of 1933 is
incorporated by reference in Parts I, II  and III of this Annual Report on Form
10-K.


                                      -1-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)


                               TABLE OF CONTENTS



                                   Part I
                                   ------
                                                                          Page
                                                                          ----
  Item 1.   Business......................................................  3

  Item 2.   Properties....................................................  5

  Item 3.   Legal Proceedings.............................................  9

  Item 4.   Submission of Matters to a Vote of Security Holders...........  9


                                   Part II
                                   -------
  Item 5.   Market for the Partnership's Limited Partnership Units and
            Related Security Holder Matters...............................  9

  Item 6.   Selected Financial Data....................................... 10

  Item 7.   Management's Discussion and Analysis of Financial
            Condition and Results of Operations........................... 11

  Item 8.   Financial Statements and Supplementary Data................... 14

  Item 9.   Changes in and Disagreements with Independent Auditors on
            Accounting and Financial Disclosure........................... 36


                                   Part III
                                   --------
  Item 10.  Directors and Executive Officers of the Registrant............ 36

  Item 11.  Executive Compensation ....................................... 41

  Item 12.  Security Ownership of Certain Beneficial
            Owners and Management......................................... 42

  Item 13.  Certain Relationships and Related Transactions................ 42


                                   Part IV
                                   -------
  Item 14.  Exhibits, Financial Statement Schedules, and
            Reports on Form 8-K........................................... 43

  SIGNATURES.............................................................. 44



                                      -2-


                                    PART I

Item 1. Business

The Registrant, Inland's  Monthly  Income  Fund,  L.P. (the "Partnership"), was
formed on March  26,  1987  pursuant  to  the  Delaware Revised Uniform Limited
Partnership Act, to  invest  in  improved  residential,  retail, industrial and
other  income  producing  properties.    On  August  3,  1987,  the Partnership
commenced an Offering of 50,000 (subject  to  an increase up to 60,000) Limited
Partnership Units ("Units") pursuant to  a  Registration Statement on Form S-11
under the Securities Act of  1933.  The  Offering terminated on August 3, 1988,
with total sales of 59,999 Units at  $500 per Unit, resulting in gross offering
proceeds of $29,999,500,  which  does  not  include  the General Partner's $500
contribution.   All  of  the  holders  of  these  Units  were  admitted  to the
Partnership. Of  the  gross  offering  proceeds  raised,  $25,831,542  has been
invested in seven properties.  The  Partnership  has repurchased a total of 713
Units for $356,676 from  various  Limited  Partners through the Unit Repurchase
Program. The Limited  Partners  of  the  Partnership  share  in the benefits of
ownership of the Partnership's real  property  investments in proportion to the
number of Units held.  Inland Real Estate Investment Corporation is the General
Partner.

The Partnership is engaged solely in the business of real estate investment.  A
presentation of information about industry segments would not be material to an
understanding of the Partnership's business taken as a whole.

The  Partnership  acquired  fee  ownership   of  the  following  real  property
investments:

   Property and Location            Square Feet          Date of Purchase
---------------------------      -------------------   ------------------
McHenry Plaza                          56,643                10/19/87
Shopping Center
McHenry, Illinois

Douglas Nursing Home                   65,661                01/13/88
Living and Retirement Center
Mattoon, Illinois

Hillside Nursing Home                  21,565                01/29/88
Living Center
Yorkville, Illinois

Scandinavian Health Spa, Inc.          26,040                04/20/88
Health and Tennis Club
Westlake, Ohio

Schaumburg Terrace                    186,720                06/24/88
Condominiums Complex (b)           (228 Units)           (sold during
Schaumburg, Illinois                                      1994 & 1995)

Wal-Mart - Duncan                      68,907                08/05/88
Department Store
Duncan, Oklahoma

Wal-Mart - Rantoul                     65,930                08/05/88
Department Store
Rantoul, Illinois                                      


                                      -3-


(a) Reference is made to Notes (2  and  7) of the Notes to Financial Statements
    (Item 8  of  this  Annual  Report)  for  the  current outstanding principal
    balance and a description of the long-term mortgage indebtedness secured by
    the Partnership's real property investments.

(b) Reference is made to Note (3) of  the Notes to Financial Statements (Item 8
    of this Annual Report) for a  description  of the sale of buildings in this
    complex during 1994 and 1995.

The Partnership's real property investments are  described  on pages 25 - 29 of
the Prospectus of the Partnership dated  August 3, 1987, and in the supplements
dated January  29,  1988,  April  21,  1988,  and  June  10,  1988,   which are
incorporated herein by reference.  Reference  is  also  made to Note (2) of the
Notes to Financial Statements  (Item  8  of  this Annual Report) for additional
descriptions of these investments.

The  Partnership  has  significant   net   operating  leases  with  Elite  Care
Corporation ("Elite") for the  Douglas  Nursing  Home  and the Hillside Nursing
Home, Scandinavian Health Spa, Inc.  for  the Scandinavian Health Club and Wal-
Mart Stores, Inc. for the  Rantoul  and  Duncan Wal-Marts.  Revenues from these
leases  represent  approximately  29%,  13%   and  18%,  respectively,  of  the
Partnership's income for the year ended December 31, 1996.

The Partnership's real  property  investments  are  subject to competition from
similar  types  of  properties  in  the  vicinity  in  which  each  is located.
Approximate occupancy levels for  the  properties  are  set forth on a year-end
basis in the table set forth in Item 2 below to which reference is hereby made.
The Partnership's real property investments  are  located in Illinois, Ohio and
Oklahoma.  The Partnership has no real property investments located outside the
United States.   The  Partnership  does  not  segregate  revenues  or assets by
geographic region,  and  such  a  presentation  would  not  be  material  to an
understanding of the Partnership's business taken as a whole.

The Partnership has utilized its proceeds for investment to acquire properties.
The leases at certain of  the  Partnership's properties entitle the Partnership
to participate in gross receipts of  lessees  above fixed minimum amounts.  The
Partnership's receipt of such amounts  will  depend  in  part on the ability of
those  lessees  to  compete   with   similar  businesses  in  their  respective
vicinities.



















                                      -4-


The Partnership also competes with  many  other entities engaged in real estate
investment activities in the disposition  of  property.   The ability to locate
purchasers for the properties will  depend  primarily  on the operations of the
properties and the desirability of the locations of the operating properties.

The Partnership had no employees during 1996.

The terms of transactions between the Partnership and Affiliates of the General
Partner of the Partnership are set forth  in  Item 11 below and Note (6) of the
Notes to Financial Statements (Item 8 of this Annual Report) to which reference
is hereby made for a description of such terms and transactions.


Item 2. Properties

The Partnership owns directly the properties referred to under Item 1 above and
in Note (2) of the Notes to Financial Statements (Item 8 of this Annual Report)
to which reference is hereby made for a description of said properties.

The following is a list  of  approximate occupancy levels for the Partnership's
investment properties as of  the  end  of  each  of  the  last five years.  N/A
indicates the property was not owned at the end of the year.


                               1996      1995      1994      1993      1992
                               ----      ----      ----      ----      ----
  McHenry Plaza (a)             69%       86%       84%       88%       57%
  McHenry, Illinois

  Douglas Nursing Home         100%      100%      100%      100%      100%
  Mattoon, Illinois

  Hillside Nursing Home        100%      100%      100%      100%      100%
  Yorkville, Illinois

  Scandinavian Health          100%      100%      100%      100%      100%
  Westlake, Ohio

  Schaumburg Terrace           N/A       N/A        88%*      84%       86%
  Schaumburg, Illinois

  Wal-Mart - Duncan            100%      100%      100%      100%      100%
  Duncan, Oklahoma

  Wal-Mart - Rantoul           100%      100%      100%      100%      100%
  Rantoul, Illinois

  (a) As of this report, the occupancy  rate  at McHenry Plaza has increased to
      80%.

   * Represents occupancy  of  the  remaining  condominium  units  owned by the
     Partnership at the end of the year.






                                      -5-



The following is a list of average  effective annual base rents per square foot
for the Partnership's investment properties for each of the last five years.

                               1996      1995      1994      1993      1992
                               ----      ----      ----      ----      ----
  McHenry Plaza              $  5.22      6.21      7.06      6.77      6.33
  McHenry, Illinois

  Douglas Nursing Home          6.46      6.46      6.46      6.46      6.46
  Mattoon, Illinois

  Hillside Nursing Home        17.59     17.59     17.59     17.59     17.59
  Yorkville, Illinois

  Scandinavian Health          13.79     13.79     12.54     12.54     12.54
  Westlake, Ohio

  Wal-Mart - Duncan             3.90      3.90      3.90      3.90      3.90
  Duncan, Oklahoma

  Wal-Mart - Rantoul            3.57      3.57      3.57      3.57      3.57
  Rantoul, Illinois


In addition, the Partnership receives additional rental income from each of the
lessees of these properties for the  payment  of real estate taxes, common area
maintenance and insurance.






























                                      -6-



<TABLE>

The following tables set forth certain information with respect to the amount and expiration of leases for the
Partnership's investment properties:
<CAPTION>

                                       Square
                                        Feet                           Renewal           Current        Rent Per
             Lessee                    Leased      Lease Ends          Options         Annual Rent     Square Foot
             ------                   --------    ------------        ---------        -----------    -------------
<S>                                     <C>         <C>               <C>               <C>              <C>       
Scandinavian Health Spa
    Scandinavian Health
    Spa, Inc.                           26,040      12/2004           2/5 years         $359,094         $13.79

Douglas Living Center
    Elite                               65,661       1/2001           1/10 years         427,623           6.51

Hillside Living Center
    Elite                               21,565       1/2001           1/10 years         382,539          17.74

Duncan Walmart
    Wal-mart Stores, Inc.               68,907       1/2014           5/5 years          262,341           3.81

Rantoul Walmart
    Wal-mart Stores, Inc.               65,930       1/2014           5/5 years          229,414           3.48

McHenry Plaza
    Bond Drug Company                   14,682      11/2010              -               136,353           9.29
    Spot Amusements, Inc.                8,269       5/1999              -                37,585           4.55
    Spot Amusements, Inc.                4,590       5/1999              -                16,800           3.66
    Northern Federal Savings
      and Loan                           3,420       3/2001           1/5 years           47,520          13.89
    Northern Federal Savings
      and Loan                             425       3/2001           1/5 years           27,500          64.71
    Don Roberts Beauty School            3,000       9/1997              -                32,260          10.75
    Premium Tobacco Store                1,750      11/1999              -                17,500          10.00
    Merit Medical                        2,000      Monthly              -                 7,000           3.50
    Spot Amusement                         900      Monthly              -                 1,800           2.00

</TABLE>
















                                      -7-


<TABLE>

<CAPTION>
                                                     Approx.        Annual             Annual Base    % of Total    % of Annual
                                       Number    Gross Leasable      Base      Total    Rent Per         GLA         Base Rent
                              Year       of      Area ("GLA") of   Rent of    Annual   Sq. Ft Under   Represented   Represented
                             Ending    Leases    Expiring Leases   Expiring    Base     Expiring      By Expiring   By Expiring
        Property             Dec 31,  Expiring    (square feet)     Leases    Rent(1)    Leases         Leases        Leases   
        --------             ------- ----------  ---------------   --------   -------  ------------   -----------   -----------

<S>                           <C>        <C>          <C>         <C>        <C>      <C>                 <C>          <C>     
Scandinavian Health Spa
                              1997-
                               2003      -              -         $   -      $359,094 $      -             -            -
                              2004       1            26,040       359,094    359,094      13.79          100%         100%
                              2005-
                               2006      -              -             -          -           -             -            -

Douglas Living Center         1997       -              -             -       436,452        -             -            -
                              1998       -              -             -       446,083        -             -            -
                              1999       -              -             -       455,714        -             -            -
                              2000       -              -             -       465,345        -             -            -
                              2001       1            65,661       466,148    466,148       7.10          100%         100%
                              2002-
                               2006      -              -             -          -           -             -            -

Hillside Living Center        1997       -              -             -       390,436        -             -            -
                              1998       -              -             -       399,052        -             -            -
                              1999       -              -             -       407,668        -             -            -
                              2000       -              -             -       416,284        -             -            -
                              2001       1            21,565       417,002    417,002      19.33          100%         100%
                              2002-
                               2006      -              -             -          -           -             -            -

Duncan Walmart               
                              1997       -              -             -       262,341        -             -            -
                              1998-
                               2006      -              -             -       266,440        -             -            -

Rantoul Walmart
                              1997       -              -             -       229,414        -             -            -
                              1998-
                               2006      -              -             -       232,999        -             -            -

McHenry Plaza
                              1997       1             3,000        32,260    323,490      10.75          5.30%        9.97
                              1998       -              -             -       294,048        -             -            -
                              1999       3            14,609        81,286    291,242       5.56         25.79%       27.91%
                              2000       -              -             -       211,377        -             -            -
                              2001       2             3,845        75,020    211,377      19.51          6.79%       35.49%
                              2002-                                                   
                               2006      -              -             -       136,353        -             -            -



(1) No assumptions were made regarding the releasing of expired leases.  It is the opinion of the General Partner that the space
    will be released at market prices.

</TABLE>
                                      -8-



Item 3. Legal Proceedings

The Partnership was not subject to any material pending legal proceedings.

Item 4. Submission of Matters to a Vote of Security Holders

There were no matters submitted to a vote of security holders during 1996.


                                    PART II


Item 5. Market  for  the  Partnership's  Limited  Partnership  Units and Related
Security Holder Matters

As of December 31, 1996, there  were  2,248 holders of Units of the Partnership.
There is no public market for Units nor is it anticipated that any public market
for Units will develop.  Reference is  made  to Item 6 below for a discussion of
cash distributions made to the Limited Partners.

Although the Partnership had established a Unit Repurchase Program, there are no
funds remaining for the repurchase of Units through this program.



































                                      -9-


Item 6. Selected Financial Data

                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

       For the years ended December 31, 1996, 1995, 1994, 1993 and 1992

                 (not covered by Independent Auditors' Report)


                            1996       1995       1994       1993       1992
                            ----       ----       ----       ----       ----
  Total assets......... $24,276,313 24,905,111 24,872,124 24,525,179 25,164,260
                        =========== ========== ========== ========== ==========

  Long-term debt, less
    current portion.... $ 1,529,779  1,566,596  1,600,006  1,630,324  1,657,836
                        =========== ========== ========== ========== ==========

  Total income......... $ 2,766,451  2,973,283  3,397,170  3,552,879  3,518,525
                        =========== ========== ========== ========== ==========

  Net income........... $ 1,869,732  1,923,281  1,303,469  1,239,610  1,245,401
                        =========== ========== ========== ========== ==========
  Net loss per the
   one General Partner
   Unit................ $      -          -          -          -        (8,786)
                        =========== ========== ========== ========== ==========
  Net income
   allocated per
   Limited Partnership
   Unit (b)............ $     31.54      32.44      21.99      20.91      21.15
                        =========== ========== ========== ========== ==========
  Distributions to
   Limited Partners (c) $ 2,347,018  2,672,357  2,371,433  2,371,433  2,371,427
                        =========== ========== ========== ========== ==========

  Distributions to
   Limited Partners
   per Unit (b)........ $     39.59      45.08      40.00      40.00      40.00
                        =========== ========== ========== ========== ==========


  (a) The above selected financial data should  be read in conjunction with the
      financial statements and related notes appearing elsewhere in this Annual
      Report.

  (b) The net income and distribution per Unit data are based upon the weighted
      average number of Units outstanding of 59,286.

  (c) This amount represents the total  distribution to the Limited Partners, a
      portion of which was funded by the General Partner.






                                     -10-



Item 7.  Management's  Discussion  and  Analysis  of  Financial  Condition  and
         Results of Operations

Liquidity and Capital Resources

Certain statements in this  "Management's  Discussion and Analysis of Financial
Condition and Results of  Operations"  and  elsewhere  in this annual report on
Form 10-K constitute  "forward-looking  statements"  within  the meaning of the
Federal Private Securities  Litigation  Reform  Act  of  1995.   These forward-
looking statements involve  known  and  unknown  risks, uncertainties and other
factors which  may  cause  the  Partnership's  actual  results, performance, or
achievements to be materially  different  from any future results, performance,
or achievements  expressed  or  implied  by  these  forward-looking statements.
These factors include, among  other  things,  competition for tenants; federal,
state, or local  regulations;  adverse  changes  in  general  economic or local
conditions; uninsured losses; and  potential  conflicts of interest between the
Partnership and its Affiliates, including the General Partner.

On August 3, 1987, the  Partnership  commenced an Offering of 50,000 (increased
to 60,000) Limited Partnership  Units  pursuant  to a Registration Statement on
Form S-11 under the Securities Act of  1933.  The Offering terminated on August
3, 1988 with a total of 59,999 Units  being sold to the public at $500 per Unit
resulting in $29,999,500  gross  offering  proceeds  not  including the General
Partner, of  which  $25,831,542  had  been  invested  in  seven  properties (as
described in Note (2)  of  the  Notes  to  Financial Statements filed with this
Annual Report).  In addition,  proceeds  were  used  to repay advances from the
General Partner, pay offering and  organization costs and make distributions to
the Limited Partners.

At December  31,  1996,  the  Partnership  had  cash  and  cash  equivalents of
$357,749. The Partnership  intends  to  use  such  funds  for distributions and
working capital requirements.

The properties owned by the  Partnership,  along  with the interest received on
the Schaumburg Terrace mortgage receivables, are generating cash flow in excess
of the 8% annualized distributions  to  the Limited Partners (paid monthly), in
addition to covering all the  operating  expenses  of  the Partnership.  To the
extent that the cash flow is  insufficient to meet the Partnership's needs, the
Partnership may rely  on  Supplemental  Capital  Contributions from the General
Partner, advances from  Affiliates  of  the  General  Partner, other short-term
financing, or may sell one or more of the properties.  

Results of Operations

As of December 31, 1996, the  Partnership  owns six operating properties.  Five
of these properties were leased  on  a  "triple-net" basis which means that all
expenses of the property are  passed  through  to  the tenant.  The Partnership
also owns a shopping center, McHenry  Plaza.  The leases of the shopping center
provide that the Partnership  be  responsible  for maintenance of the structure
and the parking lot and the  tenants  are required to reimburse the Partnership
for portions of insurance, real estate taxes and common area maintenance.

The gain on the sale of investment  property resulted from the sales of sixteen
and twenty-two of  the  thirty-eight  six-unit condominium buildings comprising
the Schaumburg Terrace condominium complex in 1995 and 1994, respectively.  The
remaining deferred gain from these  sales  of  $2,526,885 will be recognized as
cash is received on the related financing extended by the Partnership to the 

                                     -11-


individual purchasers.  Reference is made to Note (3) of the Notes to Financial
Statements (Item 8 of this  Annual  Report)  for  a  description of the sale of
buildings in this complex during 1995 and 1994.

Overall rental  income  for  the  Partnership  decreased  for  the  years ended
December 31, 1996 and 1995, as  compared  to  the year ended December 31, 1994,
primarily due to the sales  program  at  Schaumburg Terrace.  However, interest
income earned by the Partnership on the Schaumburg Terrace mortgage receivables
is greater than net  rental  income,  after  property  expenses.  Rental income
decreased at McHenry Plaza  in  1996  and  1995,  as  compared  to 1994, due to
tenants vacating their spaces.   Rental income increased at Scandinavian Health
Club in 1995 due to a scheduled rent increase.

The major tenant at McHenry Plaza is a Walgreens drug store.  Other tenants are
Don Robert's Beauty School and Family Entertainment Center.  These tenants took
possession of their spaces at the  center from 1990 through 1993, following the
July 1989 termination of a  lease  with  Duckwell-Alco Stores, Inc., the tenant
which leased 94%  of  the  space  in  the  center  at  the time the Partnership
purchased the property.  The General  Partner embarked on a program to re-lease
the center to new tenants, and  secured  a $1,700,000 line of credit (which was
replaced in 1992 by a loan collateralized by the Rantoul Wal-Mart) for property
upgrades, remodeling and re-leasing  expenses.    Annual principal and interest
payments on this debt total $187,943.    As of December 31, 1996, approximately
69% of the property was leased.   As  of the date of this report, the occupancy
level has increased to approximately 80%. Additional expenditures for build-out
and leasing commissions  are  anticipated  as  the  remaining rentable space is
leased.  The lease-up of  McHenry  Plaza  will increase the cash flow available
for distribution by the Partnership.

The  sale  of  the  condominium  buildings  comprising  the  Schaumburg Terrace
condominium  complex  resulted  in   decreases  in  depreciation  and  property
operating  expenses  to  Affiliates  and  non-affiliates  for  the  years ended
December 31, 1996 and 1995, as compared to the year ended December 31, 1994.

The decrease  in  professional  services  to  Affiliates  for  the  years ended
December 31, 1996 and 1995, as compared to the year ended December 31, 1994, is
due to a decrease in both legal and accounting fees paid to Affiliates.  

The increase in  professional  services  to  non-affiliates  for the year ended
December 31, 1996, as compared to the  year  ended December 31, 1995, is due to
an increase in accounting and legal  fees paid to non-affiliates.  The increase
in professional services  to  non-affiliates  for  the  year ended December 31,
1995, as compared to the year ended December 31, 1994, is due to an increase in
accounting fees paid to non-affiliates.

General and administrative expenses to  Affiliates increased for the year ended
December 31, 1996, as compared to the  year  ended December 31, 1995, is due to
an increase in  investor  services,  supplies  and  postage expenses, partially
offset by a decrease in data processing and mortgage servicing expenses.  

General and administrative expenses to  Affiliates decreased for the year ended
December 31, 1995, as compared to  the  year  ended December 31, 1994, due to a
decrease in data processing expense  which  was partially offset by an increase
in fees paid to an Affiliate  for  servicing the mortgages relating to the sale
of Schaumburg Terrace.



                                     -12-



General and administrative expenses  to  non-affiliates  increased for the year
ended December 31, 1996, as compared  to  the year ended December 31, 1995, due
to an increase in the Illinois Replacement Tax.

Interest expense to Affiliates  is  the  result  of  the  loan from the General
Partner  received  in  1993  for   condominium  conversion  costs  relating  to
Schaumburg Terrace.  See Note (6) of  the Notes to Financial Statements (Item 8
of this Annual Report).


Inflation

For the Partnership's  McHenry  Plaza  Shopping  Center  inflation is likely to
increase rental income from leases  to  new tenants and lease renewals, subject
to market conditions.   Continued  inflation  may cause capital appreciation of
this property over  time  as  rental  rates  and  the  replacement  cost of the
property rise.

Rental income and operating expenses  for those partnership properties operated
under triple-net leases  are  not  likely  to  be  directly  affected by future
inflation, since rents are fixed under the leases and property expenses are the
responsibility of  tenants.    The  capital  appreciation  of triple-net-leased
properties is likely to be  influenced  by  interest rate fluctuations.  To the
extent that inflation  affects  interest  rates,  future  inflation may have an
effect on the capital appreciation of triple-net-leased properties.
































                                     -13-


Item 8. Financial Statements and Supplementary Data




                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)



                                       Index                                   
                                       -----                              Page
                                                                          ----
Independent Auditors' Report.............................................  15

Financial Statements:

  Balance Sheets, December 31, 1996 and 1995.............................  16

  Statements of Operations, for the years ended
    December 31, 1996, 1995 and 1994.....................................  18

  Statements of Partners' Capital, for the years ended
    December 31, 1996, 1995 and 1994.....................................  20

  Statements of Cash Flows, for the years ended
    December 31, 1996, 1995 and 1994.....................................  21

  Notes to Financial Statements..........................................  23

Real Estate and Accumulated Depreciation (Schedule III)..................  34

Schedules not filed:

All schedules other than those indicated in  the index have been omitted as the
required information is inapplicable  or  the  information  is presented in the
financial statements or related notes.





















                                     -14-







INDEPENDENT AUDITORS' REPORT


To the Partners of 
Inland's Monthly Income Fund, L.P. 

We have audited  the  accompanying  balance  sheets  of Inland's Monthly Income
Fund, L.P. (a limited partnership) as  of  December  31, 1996 and 1995, and the
related statements of operations, partners' capital, and cash flows for each of
the three years  in  the  period  ended  December  31,  1996.   Our audits also
included  the  financial  statement  schedule  listed  in  item  14(c).   These
financial statements and financial statement schedule are the responsibility of
the Partnership's management.  Our  responsibility  is to express an opinion on
these financial  statements  and  financial  statement  schedule  based  on our
audits.  

We conducted our audits in accordance with general accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance  about  whether  the  financial   statements  are  free  of  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,  such  financial  statements  present  fairly,  in all material
respects, the financial position of  Inland's  Monthly  Income Fund, L.P. as of
December 31, 1996 and 1995,  and  the  results  of  its operations and its cash
flows for each of the three  years  in  the  period ended December 31, 1996, in
conformity  with  generally  accepted  accounting  principles.    Also,  in our
opinion, the financial statement schedule referred to above, when considered in
relation to the basic financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.



DELOITTE & TOUCHE LLP


Chicago, Illinois
January 31, 1997











                                     -15-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                                Balance Sheets

                          December 31, 1996 and 1995


                                    Assets
                                    ------

                                                       1996          1995
Current assets:                                        ----          ----
  Cash and cash equivalents (Note 1).............. $   357,749       440,767
  Accounts and rents receivable...................      69,819        53,005
  Mortgage interest receivable....................      70,259        62,115
  Current portion of mortgage loans receivable....      77,430        70,546
  Current portion of deferred rent receivable.....      12,503         6,879
  Other assets....................................       4,013         3,550
                                                   ------------  ------------
    Total current assets..........................     591,773       636,862
                                                   ------------  ------------
Investment properties (including acquisition
    fees paid to Affiliates of $1,738,621)
    (Notes 1, 2 and 6):
  Land............................................   2,697,394     2,697,394
  Buildings and improvements......................  15,592,680    15,592,680
  Tenant improvements.............................     749,447       707,502
                                                   ------------  ------------
                                                    19,039,521    18,997,576
  Less accumulated depreciation...................   4,496,365     3,978,010
                                                   ------------  ------------
    Net investment properties.....................  14,543,156    15,019,566
                                                   ------------  ------------
Other assets:
  Mortgage loans receivable, less current portion.   8,494,670     8,571,225
  Deferred loan fees (net of accumulated
    amortization of $22,761 and $18,133 at
    December 31, 1996 and 1995, respectively)
    (Note 1)......................................      23,527        28,155
  Deferred leasing fees (including $219,451
    paid to Affiliates) (net of accumulated
    amortization of $169,227 and $148,197 at
    December 31, 1996 and 1995, respectively)
    (Notes 1 and 6)...............................     175,160       196,190
  Deferred rent receivable, less current portion
    (Notes 1 and 5)...............................     448,027       453,113
                                                   ------------  ------------
    Total other assets............................   9,141,384     9,248,683
                                                   ------------  ------------
Total assets...................................... $24,276,313    24,905,111
                                                   ============  ============




                See accompanying notes to financial statements.


                                     -16-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                                Balance Sheets
                                  (continued)

                          December 31, 1996 and 1995


                       Liabilities and Partners' Capital
                       ---------------------------------
                                                       1996          1995
Current liabilities:                                   ----          ----
  Accounts payable and accrued expenses........... $    22,211        27,035
  Accrued real estate taxes.......................      59,114       117,803
  Distributions payable (Note 9)..................     198,790       199,337
  Due to Affiliates (Note 6)......................       2,752         9,218
  Deposits held for others........................      99,250       117,369
  Current portion of long-term debt (Note 7)......      36,817        33,410
  Current portion of deferred gain on sale of
    investment property...........................      20,799        20,799
                                                   ------------  ------------
    Total current liabilities.....................     439,733       524,971
                                                   ------------  ------------
Deferred loan fees (Note 1).......................      69,264        77,922
Long-term debt, less current portion (Note 7).....   1,529,779     1,566,596
Deferred gain on sale of investment property,
  less current portion (Note 3)...................   2,506,086     2,526,885
                                                   ------------  ------------
  Total liabilities...............................   4,544,862     4,696,374
                                                   ------------  ------------
Partners' capital (Notes 1, 4 and 6):
  General Partner:
    Capital contribution..........................         500           500
    Supplemental Capital Contributions............   2,095,863     2,095,863
    Supplemental capital distributions to
      Limited Partners............................  (2,095,863)   (2,095,863)
    Cumulative net loss...........................     (36,743)      (36,743)
                                                   ------------  ------------
                                                       (36,243)      (36,243)
  Limited Partners:                                ------------  ------------
    Units of $500. Authorized 60,000 Units,
      59,286 Units outstanding (net of offering
      costs of $3,289,242, of which $388,902 was
      paid to Affiliates).........................  26,353,582    26,353,582
    Supplemental Capital Contributions from
      General Partner.............................   2,095,863     2,095,863
    Cumulative net income.........................  12,542,734    10,673,002
    Cumulative distributions...................... (21,224,485)  (18,877,467)
                                                   ------------  ------------
                                                    19,767,694    20,244,980
                                                   ------------  ------------
    Total Partners' capital.......................  19,731,451    20,208,737
                                                   ------------  ------------
Total liabilities and Partners' capital........... $24,276,313    24,905,111
                                                   ============  ============

                See accompanying notes to financial statements.


                                     -17-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                           Statements of Operations

             For the years ended December 31, 1996, 1995 and 1994



                                         1996          1995          1994
                                         ----          ----          ----
Income:
  Rental income (Notes 1 and 5)..... $ 1,962,343     2,178,893     3,139,073
  Additional rental income..........      37,983        62,589        63,631
  Interest income...................     766,125       694,548       135,776
  Other income......................        -           37,253        58,690
                                     ------------  ------------  ------------
                                       2,776,451     2,973,283     3,397,170
Expenses:                            ------------  ------------  ------------
  Professional services to
    Affiliates......................      13,295        22,818        27,655
  Professional services to
    non-affiliates..................      30,468        28,701        23,776
  General and administrative
    expenses to Affiliates..........      34,248        40,106        42,594
  General and administrative
    expenses to non-affiliates......      21,753        18,769        18,188
  Property operating expenses to
    Affiliates......................      28,820        39,816        86,991
  Property operating expenses
    to non-affiliates...............      90,659       337,677     1,136,582
  Interest expense to Affiliates....        -             -           14,309
  Interest expense to non-affiliates     154,262       157,379       160,208
  Depreciation......................     518,355       551,293       788,063
  Amortization......................      25,658        26,147        34,085
                                     ------------  ------------  ------------
                                         917,518     1,222,706     2,332,451
                                     ------------  ------------  ------------
Operating income....................   1,848,933     1,750,577     1,064,719
Gain on sale of investment
  property (Note 3).................      20,799       172,704       238,750
                                     ------------  ------------  ------------
Net income.......................... $ 1,869,732     1,923,281     1,303,469
                                     ============  ============  ============












                See accompanying notes to financial statements.


                                     -18-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                           Statements of Operations
                                  (continued)

             For the years ended December 31, 1996, 1995 and 1994


                                         1996          1995          1994
                                         ----          ----          ----
Net income allocated to (Note 4):
  General Partner...................        -             -             -  
  Limited Partners..................   1,869,732     1,923,281     1,303,469
                                     ------------  ------------  ------------
Net income.......................... $ 1,869,732     1,923,281     1,303,469
                                     ============  ============  ============

Net income allocated to Limited
  Partners per weighted average
  of Limited Partnership Units of
  59,286............................ $     31.54         32.44         21.99
                                     ============  ============  ============

































                See accompanying notes to financial statements.


                                     -19-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                        Statements of Partners' Capital

             For the years ended December 31, 1996, 1995 and 1994


                                        General       Limited
                                        Partner       Partners      Total
                                        -------       --------      -----
Balance (deficit) January 1, 1994... $   (36,243)   21,782,020    21,745,777

Net income (Note 4).................        -        1,303,469     1,303,469
Supplemental Capital Contributions
  by the General Partner (a)........        -          280,000       280,000
Distributions to Limited Partners
  ($40.00 per weighted average of
  Limited Partnership Units
  of 59,286)........................        -       (2,371,433)   (2,371,433)
                                     ------------  ------------  ------------
Balance (deficit) December 31, 1994.     (36,243)   20,994,056    20,957,813

Net income (Note 4).................        -        1,923,281     1,923,281
Distributions to Limited Partners
  ($45.08 per weighted average of
  Limited Partnership Units
  of 59,286)........................        -       (2,672,357)   (2,672,357)
                                     ------------  ------------  ------------
Balance (deficit) December 31, 1995.     (36,243)   20,244,980    20,208,737

Net income (Note 4).................        -        1,869,732     1,869,732
Distributions to Limited Partners
  ($39.59 per weighted average of
  Limited Partnership Units
  of 59,286)........................        -       (2,347,018)   (2,347,018)
                                     ------------  ------------  ------------
Balance (deficit) December 31, 1996. $   (36,243)   19,767,694    19,731,451
                                     ============  ============  ============


(a) Made by the General Partner to fund the cumulative preferred return of
    8% per annum.













                See accompanying notes to financial statements.


                                     -20-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                           Statements of Cash Flows

             For the years ended December 31, 1996, 1995 and 1994



                                         1996          1995          1994
Cash flows from operating activities:    ----          ----          ----
  Net income........................ $ 1,869,732     1,923,281     1,303,469
  Adjustments to reconcile net income
    to net cash provided by operating
      activities:
    Gain on sale of investment
      property......................     (20,799)     (172,704)     (238,750)
    Depreciation....................     518,355       551,293       788,063
    Amortization....................      25,658        26,147        34,085
    Changes in assets and liabilities:
      Accounts and rents receivable.     (16,814)      (12,769)         (232)
      Mortgage interest receivable..      (8,144)      (30,248)      (31,867)
      Other current assets..........        (463)         (872)        2,259
      Deferred rent receivable......        (538)      (28,162)      (19,072)
      Accounts payable and accrued
        expenses....................      (4,824)      (51,986)       29,852
      Accrued real estate taxes.....     (58,689)     (294,117)      (28,432)
      Due to Affiliates.............      (6,466)        7,652        (1,230)
      Other current liabilities.....        -           (5,118)          499
      Deferred loan fees............      (8,658)       25,311        52,611
Net cash provided by operating       ------------  ------------  ------------
  activities........................   2,288,350     1,937,708     1,891,255
                                     ------------  ------------  ------------
Cash flows from investing activities:
  Proceeds from sale of investment
    property........................        -          409,383       700,648
  Principal payments received on
    mortgage loans receivable.......      69,671        53,149         6,519
  Capital expenditures..............     (41,945)      (14,509)      (68,443)
Net cash provided by investing       ------------  ------------  ------------
  activities........................      27,726       448,023       638,724
                                     ------------  ------------  ------------
Cash flows from financing activities:
  Supplemental Capital Contributions        -             -          280,000
  Cash distributions................  (2,347,565)   (2,674,430)   (2,371,433)
  Change in Deposits held
    for others......................     (18,119)      (23,504)      (22,346)
  Principal payments of long-term
    debt............................     (33,410)      (30,318)      (27,513)
  Repayment of loan from
    General Partner.................        -             -         (260,000)
Net cash used in financing           ------------  ------------  ------------
  activities........................  (2,399,094)   (2,728,252)   (2,401,292)
                                     ------------  ------------  ------------



                See accompanying notes to financial statements.


                                     -21-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                           Statements of Cash Flows
                                  (continued)

             For the years ended December 31, 1996, 1995 and 1994



                                         1996          1995          1994
Net increase (decrease) in cash          ----          ----          ----
  and cash equivalents.............. $   (83,018)     (342,521)      128,687
Cash and cash equivalents at
  beginning of year.................     440,767       783,288       654,601
Cash and cash equivalents at         ------------  ------------  ------------
  end of year....................... $   357,749       440,767       783,288
                                     ============  ============  ============



  Cash paid for interest............ $   154,534       157,951       185,255
                                     ============  ============  ============


Supplemental disclosure of non-cash investing activities:

Sale of investment property:
  Mortgage loans receivable.........        -       (3,789,704)   (4,911,735)
  Reduction of investment in
    property........................        -        3,683,157     5,019,117
  Reduction of accumulated
    depreciation related to
    investment property sold........        -         (812,990)   (1,036,952)
  Gain on sale......................        -          172,704       238,750
  Deferred gain on sale.............        -        1,156,216     1,391,468
    Proceeds from sale of investment ------------  ------------  ------------
      property...................... $      -          409,383       700,648
                                     ============  ============  ============

















                See accompanying notes to financial statements


                                     -22-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements

             For the years ended December 31, 1996, 1995 and 1994


(1) Organization and Basis of Accounting

Inland's Monthly Income Fund, L.P. (the "Partnership"), was formed on March 26,
1987 pursuant to  the  Delaware  Revised  Uniform  Limited  Partnership Act, to
invest in improved residential,  retail,  industrial and other income producing
properties.  On August 3, 1987, the Partnership commenced an Offering of 50,000
(subject to an  increase  up  to  60,000)  Limited  Partnership Units ("Units")
pursuant to a  Registration  under  the  Securities  Act  of 1933. The Offering
terminated on August 3, 1988,  with  total  sales  of  59,999 Units at $500 per
Unit, resulting in  gross  offering  proceeds  of  $29,999,500.   This does not
include the General Partner's contribution.   All of the holders of these Units
were admitted to the Partnership.   The  Partnership has repurchased a total of
713  Units  for  $356,676  from  various  Limited  Partners  through  the  Unit
Repurchase Program.  There are no  funds  remaining for the repurchase of Units
through this program.  The  Limited  Partners  of  the Partnership share in the
benefits  of  ownership  of  the  Partnership's  real  property  investments in
proportion to  the  number  of  Units  held.    Inland  Real  Estate Investment
Corporation is the General Partner.

The preparation of financial  statements  in conformity with generally accepted
accounting principals requires  management  to  make  estimates and assumptions
that affect the reported amounts  of  assets and liabilities and disclosures of
contingent 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 these estimates.

The Partnership adopted  Statement  of  Financial  Accounting Standards No. 121
"Accounting for the Impairment of  Long-Lived  Assets and for Long-Lived Assets
to be Disposed of" ("SFAS 121") as required in the first quarter of 1996.  SFAS
121 requires that the Partnership record  an impairment loss on its property to
be held for investment whenever  its  carrying  value cannot be fully recovered
through estimated undiscounted  future  cash  flows  from  their operations and
sale.  The  amount  of  the  impairment  loss  to  be  recognized  would be the
difference between the property's  carrying  value and the property's estimated
fair value.    The  adoption  of  SFAS  121  did  not  have  any  effect on the
Partnership's financial position, results of operations or liquidity.   

Depreciation expense  is  computed  using  the  straight-line  method  over the
following estimated useful lives:
                                                   Years
                                                   -----
    Buildings and improvements.................... 30 to 40
    Furniture and fixtures........................ 5 to 12
    Tenant improvements........................... lease term






                                     -23-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


Maintenance  and  repair  expenses  are  charged  to  operations  as  incurred.
Significant improvements are capitalized  and  depreciated over their estimated
useful lives.

The Partnership  considers  all  highly  liquid  investments  purchased  with a
maturity of three months or less to be cash equivalents and are carried at cost
which approximates market.

Rental income is recognized  on  a  straight-line  basis  over the term of each
lease.  The difference between rental income earned and the cash rent due under
the provisions of the lease agreements is recorded as deferred rent receivable.

Offering costs have been offset against the Limited Partners' capital accounts.

Deferred leasing fees are amortized on  a  straight-line basis over the term of
the related lease.  Deferred loan  fees  are amortized on a straight line basis
over the term of the related loan.


































                                     -24-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


Condominium conversion costs were included in investment property held for sale
and were expensed as condominium units were sold.

Loan fees relating to the mortgage  loans receivable are deferred and amortized
as yield adjustments on  a  straight-line  basis  over  the life of the related
mortgage loan receivable which approximates the effective interest rate method.

No provision for Federal income taxes  has  been made as the liability for such
taxes is that of the Partners rather than the Partnership.

The Partnership's records are maintained on  the accrual basis of accounting in
accordance with generally accepted accounting principles ("GAAP").  The Federal
income tax return has been prepared  from such records after making appropriate
adjustments relating to depreciation and the Supplemental Capital Contributions
to reflect  the  Partnership's  accounts  as  adjusted  for  Federal income tax
reporting purposes.  Such adjustments  are  not  recorded in the records of the
Partnership.  The net effect of these items is summarized as follows:

                                        1996                     1995
                             ------------------------- -----------------------
                                             Tax                      Tax
                                GAAP         Basis        GAAP        Basis
                                Basis     (unaudited)     Basis    (unaudited)
                             ------------ ------------ ----------- -----------
Total assets................ $24,276,313   27,565,556   24,905,111  28,194,354

Partners' capital (deficit):
  General Partner...........     (36,243)     (25,022)     (36,243)    (20,045)
  Limited Partners..........  19,767,694   23,045,715   20,244,980  23,518,024

Net income (loss):
  General Partner...........        -          (4,977)        -         (3,784)
  Limited Partners..........   1,869,732    1,911,441    1,923,281   1,962,141

Net income per Limited
  Partnership Unit..........       31.54        32.24        32.44       33.10

The net income per Limited Partnership Unit is based  upon the weighted average
number of Units of 59,286.












                                     -25-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


(2) Investment Properties

(a) McHenry Plaza, McHenry, Illinois

    On October  19,  1987,  the  Partnership  purchased  a  57,910  square foot
    shopping center located  in  McHenry,  Illinois  from  an  Affiliate of the
    General  Partner.  The  cost  of  this  property  to  the  Partnership  was
    $1,967,200 which includes the purchase  price of $1,776,000 and acquisition
    costs  of  $191,200.    Subsequent   to  the  purchase  of  this  property,
    approximately $1,595,000, including  leasing  commissions,  was expended to
    upgrade the property following the  July  1989  termination of a lease with
    Duckwell - Alco Stores, Inc., the  tenant  which leased 94% of the space in
    the center at  the  time  the  Partnership  purchased  the  property.  This
    upgrade was financed by a line  of  credit secured by the Rantoul Wal-Mart.
    See Note (7) Long-Term Debt  for  further discussion of permanent financing
    obtained.

    The major tenant at McHenry Plaza is a Walgreens drug store.  Other tenants
    include Family Entertainment Center,  Northern  Federal Savings Bank, Merit
    Medical Equipment and Don Roberts Beauty  School.  As of December 31, 1996,
    approximately 17,607 square feet,  representing  31%  of the total space at
    the center, remains to  be  leased.    As  of  January  31, 1997, the total
    remaining  leaseable   space   was   approximately   11,073   square  feet,
    representing 20% of the  total  space  at  the  center. The General Partner
    continues to pursue additional leases for this remaining space.

(b) Douglas Living and Retirement Center, Mattoon, Illinois

    On January 13, 1988, the Partnership  took  title to this property which an
    Affiliate of the General  Partner  purchased  on  behalf of the Partnership
    from an unaffiliated third party for $3,208,250.  The nursing care facility
    consists of a 75  bed  facility  occupying  27,922  square  feet, a 35 unit
    retirement apartment center occupying 36,389 square feet and a 1,350 square
    foot retirement duplex.  The total cost of this property to the Partnership
    was  $3,574,465,  which  includes  the  purchase  price  of  $3,208,250 and
    acquisition costs of $366,215.

    The Retirement and Living  Center  is  currently  100% leased to Elite Care
    Corporation (ELITE).  The lease is  a triple-net lease and expires January,
    2001.  The tenant has the  right  to  extend the lease for an additional 10
    year term.    The  current  rent  per  annum  is  $427,623  and will adjust
    annually.

    In 1992, the operator of  this  facility  negotiated with a new operator to
    sublease the facility.  The  General  Partner approved the transaction with
    no significant changes to the terms of the lease.





                                     -26-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


(c) Hillside Living Center, Yorkville, Illinois

    On January 29, 1988, the Partnership  took  title to this property which an
    Affiliate of the General  Partner  purchased  on  behalf of the Partnership
    from an unaffiliated third party for $2,870,000.  The cost of this property
    to the Partnership was  $3,195,713,  which  includes  the purchase price of
    $2,870,000 and acquisition costs  of  $325,713.    The center consists of a
    two-story building with a total of 21,565 square feet.

    The Living Center is  currently  100%  leased  to  ELITE.    The lease is a
    triple-net lease and expires January,  2001.    The tenant has the right to
    extend the lease for an  additional  10  year  term.   The current rent per
    annum is $382,539 and will adjust annually.

    In 1992, the operator of  this  facility  negotiated with a new operator to
    sublease the facility.  The  General  Partner approved the transaction with
    no significant changes to the terms of the lease.

(d) Scandinavian Health Spa, Westlake, Ohio

    On April 20, 1988, the Partnership purchased an existing 26,040 square foot
    health and  racquet  club  known  as  Scandinavian  Health  Spa, located in
    Westlake,  Ohio.    The  cost  of  this  property  to  the  Partnership was
    $3,068,930, which includes  the  purchase  price  of $2,760,000 and related
    acquisition costs of $308,930.

    The property is fully leased to Scandinavian Health Spa, Inc., a subsidiary
    of Bally Health & Tennis Corporation,  under a triple-net lease.  The lease
    required a base rent per  annum  of  $296,772, paid monthly, and expires in
    December 2004.  The  tenant  has  the  option  to  extend the lease for two
    additional five-year periods.  The rent  was adjusted to $359,094 per annum
    in January 1995, and  adjusts  every  five  years  thereafter, based on the
    Consumer Price Index.

(e) Duncan Wal-Mart, Duncan, Oklahoma

    On August 5, 1988, the  Partnership  purchased  a Wal-Mart store in Duncan,
    Oklahoma (the "Duncan Store")  from  Wal-Mart  Properties, Inc. The cost to
    the  Partnership  was  $3,038,547,   which  includes  acquisition  fees  of
    $305,829.

    The Duncan Store  is  situated  on  approximately  11.5  acres  of land and
    contains a total of 68,907 square feet.   The construction of the store was
    completed in the fall of 1987.







                                     -27-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


     Wal-Mart Stores, Inc. is the tenant  and  has executed a lease for 100% of
     the rentable space.    The  lease  is  a  triple-net  lease and expires in
     January, 2014.  The tenant  has  the  right  to  extend the lease for five
     additional five year periods.   The  rent  per  annum during the first ten
     lease years is $262,341;  during  lease  years  11-20 it will be $266,440;
     during lease years 21-25 it will  be $286,935; during lease years 26-35 it
     will be $293,767;  and  it  will  be  $300,599  during the remaining lease
     years.

(f)  Rantoul Wal-Mart, Rantoul, Illinois

     On August 5, 1988, the Partnership  purchased a Wal-Mart Store in Rantoul,
     Illinois (the "Rantoul Store") from Wal-Mart Properties, Inc.  The cost to
     the  Partnership  was  $2,656,568,  which  includes  acquisition  fees  of
     $266,834.

     The Rantoul Store is  situated  on  approximately  11.2  acres of land and
     contains a total of 65,930 square feet.  The construction of the store was
     completed in the spring of 1988.

     Wal-Mart Stores, Inc. is the tenant  and  has executed a lease for 100% of
     the rentable space.    The  lease  is  a  triple-net  lease and expires in
     January, 2014.  The tenant  has  the  right  to  extend the lease for five
     additional five year periods.   The  rent  per  annum during the first ten
     lease years is $229,414;  during  lease  years  11-20 it will be $232,999;
     during lease years 21-25 it will  be $250,922; during lease years 26-35 it
     will be $256,896;  and  it  will  be  $262,870  during the remaining lease
     years.























                                     -28-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)


Cost and accumulated depreciation  of  the  above  properties are summarized as
follows:
                                                 1996             1995
         Shopping Center:                        ----             ----
          Cost.............................. $ 3,505,298        3,463,353
          Less accumulated depreciation.....   1,083,874          955,422
                                             ------------     ------------
                                               2,421,424        2,507,931
                                             ------------     ------------
         Health and Tennis Club:
          Cost..............................   3,068,930        3,068,930 
          Less accumulated depreciation.....     725,004          642,146
                                             ------------     ------------
                                               2,343,926        2,426,784
                                             ------------     ------------
         Nursing Homes:
          Cost..............................   6,770,178        6,770,178 
          Less accumulated depreciation.....   1,592,161        1,415,254
                                             ------------     ------------
                                               5,178,017        5,354,924
                                             ------------     ------------
         Department Stores:
          Cost..............................   5,695,115        5,695,115
          Less accumulated depreciation.....   1,095,326          965,188
                                             ------------     ------------
                                               4,599,789        4,729,927
                                             ------------     ------------
            Total........................... $14,543,156       15,019,566
                                             ============     ============


(3) Gain on Sale of Investment Property

Schaumburg Terrace, Schaumburg, Illinois

As of December 31, 1996, the Partnership  has sold all of the thirty-eight six-
unit  condominium  buildings  comprising  the  Schaumburg  Terrace  condominium
complex to unaffiliated third parties.   The Partnership received $249,596 from
one all-cash sale and recorded a  gain  of  $71,865  in 1994.  In addition, the
Partnership received $823,518 in  down  payment proceeds, and provided mortgage
loans totaling $8,701,439  to  the  purchasers  for the thirty-seven additional
sales.  The principal balances of  these loans range from $210,640 to $255,891.
These loans require monthly  principal  and  interest payments totaling $67,763
based on an interest rate of 8.625%  per  annum for ten years and a thirty year
amortization period with payment of all  remaining principal at the end of that
period.  The Partnership has recorded $20,799, $172,704 and $238,750 of gain as
a result of these installment sales in  1996, 1995 and 1994, respectively.  The
remaining deferred gain of $2,526,885 will  be  recognized over the life of the
related mortgage loans as principal payments are received. 


                                     -29-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)



(4)  Partnership Agreement

The Partnership Agreement  defines  the  allocation  of distributable available
cash and profits  and  losses.    Limited  Partners  will  receive 100% of cash
available  for  distribution  until  the   Limited  Partners  have  received  a
cumulative preferred return of 8%  per  annum.  Thereafter, the General Partner
shall be allocated an  amount  equal  to any Supplemental Capital Contributions
outstanding at the time of the distribution  and then 95% of cash available for
distribution will be allocated to the Limited Partners and 5% will be allocated
to the General Partner.

Pursuant to the terms of the  Partnership  Agreement, the profits and losses of
the Partnership from operations are allocated as follows:

    (a) Depreciation shall be allocated 99% to the taxable Limited Partners and
        1% to the General Partner.

    (b) To the extent the minimum distribution  of  8% per annum to the Limited
        Partners  is  funded   by   Supplemental   Capital  Contributions,  the
        distribution  shall  be  treated  as  a  guaranteed  payment,  and  the
        resulting deduction shall be allocated to the General Partner.

    (c) The remaining  net  profits  shall  be  allocated  100%  to the Limited
        Partners until the Limited Partners have been allocated an amount equal
        to the distribution  required  to  provide  them a cumulative preferred
        return of 8% per annum.

The Partnership allocates income to  Partners  such  that no Partner group will
receive an allocation of  income  which  is  greater than the Partnership's net
income for the related period.

The General Partner is required  to make Supplemental Capital Contributions, if
necessary, from time to time in  amounts sufficient to allow the Partnership to
make distributions to the Limited Partners to provide a noncompounded return on
their invested capital  equal  to  8%  per  annum.    Such contributions by the
General Partner to fund the cumulative  preferred  return of 8% per annum,  for
the three year period ended December 31, 1996, are as shown in the accompanying
statements of partners' capital.    The  cumulative amount of such Supplemental
Capital Contributions at December 31, 1996 is $2,095,863.











                                     -30-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)



(5) Operating leases

Minimum lease payments to be received  in  the future from the operating leases
are as follows:

         1997.......................................... $ 1,993,160
         1998..........................................   1,992,935
         1999..........................................   1,977,259
         2000..........................................   1,951,535
         2001..........................................   1,208,883
         Thereafter....................................   8,270,354
                                                        ------------
         Total......................................... $17,394,126
                                                        ============

Remaining lease terms range from one  year  to eighteen years.  Pursuant to the
lease agreements, tenants  of  McHenry  Plaza  Shopping  Center are required to
reimburse the Partnership for their pro rata share of the real estate taxes and
operating expenses of the property.    Such  amounts are included in additional
rental income.

Certain tenant leases contain provisions  providing for stepped rent increases.
Generally accepted accounting principles require that rental income be recorded
for the  period  of  occupancy  on  a  straight-line  basis.   The accompanying
financial statements include $538, $28,162 and  $28,620 in 1996, 1995 and 1994,
respectively, of rental income for  the  period  of occupancy for which stepped
rent increases  apply  and  $460,530  and  $459,992  in  related  deferred rent
receivable as of December 31, 1996  and 1995, respectively.  These amounts will
be collected over the terms  of  the  related leases as scheduled rent payments
are made.  Deferred rent  receivable  of  $9,548 was written off against rental
income in 1994 due  to  a  modification  of  a  lease at McHenry Plaza Shopping
Center.  

The  Partnership  has  significant  net  operating  leases    with  Elite  Care
Corporation for  the  Douglas  Nursing  Home  and  the  Hillside  Nursing Home,
Scandinavian Health Spa, Inc.  for  the  Scandinavian  Health Club and Wal-mart
Stores, Inc. for the Rantoul and  Duncan  Walmarts.  Revenues from these leases
represent approximately 29%, 13%  and  18%,  respectively, of the Partnership's
income for the year ended December 31, 1996.











                                     -31-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)



(6) Transactions with Affiliates

The General  Partner  and  its  Affiliates  are  entitled  to reimbursement for
salaries and expenses of employees  of  the  General Partner and its Affiliates
relating to the administration of  the  Partnership, of which $2,752 and $9,218
remained unpaid at December 31, 1996 and 1995, respectively.

An Affiliate of the General Partner  is entitled to receive Property Management
Fees for  management  and  leasing  services.    The  Partnership  has incurred
property management fees of $28,820,  $39,816  and  $86,991 for the years ended
December 31, 1996, 1995 and 1994, respectively, all of which has been paid.

Through the Partnership's participation  in  an  insurance program, claims from
the Partnership's properties,  as  well  as  properties  owned by other limited
partnerships syndicated by  Affiliates,  were  managed  through  a loss reserve
trust.  In  June  1995,  this  program  was  terminated.    For the years ended
December 31, 1995  and  1994,  respectively,  the  Partnership  paid $5,248 and
$7,578 to the loss  reserve  trust  for  the  McHenry Plaza Shopping Center and
Schaumburg Terrace properties.  Effective March 1994, Schaumburg Terrace was no
longer insured through this program.






























                                     -32-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                         Notes to Financial Statements
                                  (continued)



(7) Long-Term Debt

On February 26, 1992, the Partnership obtained a $1,700,000 loan collateralized
by the Rantoul Wal-Mart to replace a  maturing line of credit for the upgrading
of McHenry Plaza Shopping Center.  The loan bears an interest rate of 9.75% and
requires monthly principal and interest payments of $15,662 through March 2002,
when all unpaid principal and interest is  due.  The Partnership paid a $17,000
loan fee to the lender and incurred  $29,288 of other costs associated with the
funding of the loan.

As of December 31, 1996,  the  required principal payments on the Partnership's
long-term debt over the next five years are as follows:

         1997.......................................... $ 36,817
         1998..........................................   40,572
         1999..........................................   44,709
         2000..........................................   49,268
         2001..........................................   54,293


(8) Legal Proceedings

On March  10,  1995,  the  Partnership  settled  a  claim  with  regards to the
reorganization plan of Adventist Living  Centers, Inc. ("ALC"), a former tenant
of the Partnership's nursing  homes.    The Partnership had previously received
$149,323 from ALC in connection  with  their lease termination agreements.  The
Partnership paid $68,031 as its portion  of the settlement but received $10,876
from its share of a co-defendant's contribution.


(9) Subsequent Events

During January 1997, the  Partnership  paid  a  distribution of $198,790 to the
Limited Partners.
















                                     -33-


<TABLE>
                                              INLAND'S MONTHLY INCOME FUND, L.P.
                                                    (a limited partnership)
                                                         Schedule III
                                           Real Estate and Accumulated Depreciation
                                                       December 31, 1996



<CAPTION>
                                       Initial Cost
                                      to Partnership                              Gross amount at which carried
                                            (A)              Costs                     at end of period (B) 
                                  ----------------------- capitalized  --------------------------------------------------
                                               Buildings   subsequent     Land       Buildings              Accumulated
                                                 and           to          and         and         Total    Depreciation
                      Encumbrance    Land    improvements acquisition improvements improvements     (C)          (D)
                      ----------- ---------- ------------ ----------- ------------ ------------ ----------- -------------
<S>                   <C>          <C>         <C>         <C>          <C>        <C>           <C>

McHenry Plaza
  Shopping Center
  McHenry, IL........ $     -       330,083    1,637,117    1,538,098     330,083    3,175,215   3,505,298   1,083,874
                                                                                                            

Douglas Nursing Home
  Living/Retirement
  Center
  Mattoon, IL........       -       411,778    3,162,687         -        411,778    3,162,687   3,574,465     802,675
                                                                                                            
Hillside Nursing Home
  Living Center
  Yorkville, IL......       -       232,034    2,963,679         -        232,034    2,963,679   3,195,713     789,486
                                                                                                            

Scandinavian Health
  Spa Health and
  Tennis Club
  Westlake, OH.......       -       583,204    2,485,726         -        583,204    2,485,726   3,068,930     725,004
                                                                                                            

Wal-Mart - Duncan
  Department Store
  Duncan, OK.........       -       863,992    2,174,555         -        863,992    2,174,555   3,038,547     522,929
                                                                                                            

Wal-Mart - Rantoul
  Department Store
  Rantoul, IL........  1,566,596    276,303    2,380,265         -        276,303    2,380,265   2,656,568     572,397
                      ----------- ---------- ------------ ------------ ----------- ------------ ----------- -----------
                      $1,566,596  2,697,394   14,804,029    1,538,098   2,697,394   16,342,127  19,039,521   4,496,365
                      =========== ========== ============ ============ =========== ============ =========== ===========
</TABLE>



<TABLE>

                                                            INLAND'S MONTHLY INCOME FUND, L.P.
                                                                  (a limited partnership)
                                                                       Schedule III
                                                         Real Estate and Accumulated Depreciation
                                                                     December 31, 1996



<CAPTION>
                                  
                                             Life on which
                      Date                   Depreciation
                      Con-                   in latest Stmt
                      stru-       Date       of Operations
                      cted        Acq         is computed 
                      -----       ----       --------------

<S>                   <C>         <C>          <C>

McHenry Plaza
  Shopping Center
  McHenry, IL........ 1968        10/19        30 yrs.
                                   1987

Douglas Nursing Home
  Living/Retirement
  Center                          01/13
  Mattoon, IL........ 1964         1988        40 yrs.
                                  
Hillside Nursing Home
  Living Center                   
  Yorkville, IL...... 1963        01/29        40 yrs.
                                   1988

Scandinavian Health
  Spa Health and
  Tennis Club
  Westlake, OH....... 1984        04/20        30 yrs.
                                   1988

Wal-Mart - Duncan
  Department Store
  Duncan, OK......... 1987        08/05        35 yrs.
                                   1988

Wal-Mart - Rantoul
  Department Store
  Rantoul, IL........ 1988        08/05        35 yrs.
                                   1988
</TABLE>

                                     -34-


                      INLAND'S MONTHLY INCOME FUND, L.P.
                            (a limited partnership)

                           Schedule III (continued)

                   Real Estate and Accumulated Depreciation

                       December 31, 1996, 1995 and 1994


Notes:

(A)      The initial cost to  the  Partnership represents the original purchase
         price  of  the  property,  including  amounts  incurred  subsequent to
         acquisition which  were  contemplated  at  the  time  the property was
         acquired.

(B)      The aggregate cost  of  real  estate  owned  at  December 31, 1996 for
         federal income tax purposes was approximately $19,039,000 (unaudited).

(C)      Reconciliation of real estate owned:


                                         1996          1995          1994
                                         ----          ----          ----
    Balance at beginning of year.... $18,997,576    22,666,224    27,616,898
    Additions.......................      41,945        14,509        68,443
    Disposals.......................        -        3,683,157     5,019,117
                                     ------------  ------------  ------------
    Balance at end of year.......... $19,039,521    18,997,576    22,666,224
                                     ============  ============  ============

(D) Reconciliation of accumulated depreciation:

    Balance at beginning of year.... $ 3,978,010     4,239,707     4,488,596
    Depreciation expense............     518,355       551,293       788,063
    Disposals.......................        -          812,990     1,036,952
                                     ------------  ------------  ------------
    Balance at end of year.......... $ 4,496,365     3,978,010     4,239,707
                                     ============  ============  ============


















                                     -35-


Item 9.  Changes in and Disagreements  with  Independent Auditors on Accounting
         and Financial Disclosure

There were no disagreements on accounting or financial disclosures during 1996.



                                   PART III



Item 10.  Directors and Executive Officers of the Registrant

The  General  Partner  of  the   Partnership,  Inland  Real  Estate  Investment
Corporation, was organized in 1984 for the purpose of acting as general partner
of limited partnerships formed  to  acquire,  own  and operate real properties.
The General Partner is a wholly-owned subsidiary  of The Inland Group, Inc.  In
1990, Inland Real Estate Investment  Corporation became the replacement General
Partner for an additional 301  privately-owned real estate limited partnerships
syndicated by Affiliates.    The  General  Partner  has  responsibility for all
aspects of the  Partnership's  operations.    The  relationship  of the General
Partner  to  its  Affiliates  is  described  under  the  caption  "Conflicts of
Interest" at pages 11 to 13 of  the  Prospectus, a copy of which description is
hereby incorporated herein by reference.


Officers and Directors

The officers, directors, and key  employees  of  The Inland Group, Inc. and its
Affiliates ("Inland") that are  likely  to  provide services to the Partnership
are as follows:


                               Functional Title

  Daniel L. Goodwin....... Chairman and Chief Executive Officer
  Robert H. Baum.......... Executive Vice President-General Counsel
  G. Joseph Cosenza....... Senior Vice President-Acquisitions
  Robert D. Parks......... Senior Vice President-Investments
  Norbert J. Treonis...... Senior Vice President-Property Management
  Catherine L. Lynch...... Treasurer
  Paul J. Wheeler......... Vice President-Personal Financial Services Group
  Roberta S. Matlin....... Assistant Vice President-Investments
  Mark Zalatoris.......... Assistant Vice President-Due Diligence
  Patricia A. Challenger.. Vice President-Asset Management
  Kelly Tucek............. Assistant Vice President-Partnership Accounting
  Cynthia M. Hassett...... Assistant Vice President-Partnership Accounting
  Venton J. Carlston...... Assistant Controller










                                     -36-


  DANIEL L. GOODWIN (age 53)    is  Chairman  of  the Board of Directors of The
Inland Group, Inc.,  a  billion-dollar  real  estate and financial organization
located in Oak Brook,  Illinois.    Among  Inland's subsidiaries is the largest
property management firm in  Illinois  and  one  of the largest commercial real
estate and mortgage banking firms in the Midwest.

Mr. Goodwin has served as Director  of  the  Avenue  Bank  of Oak Park and as a
Director of the Continental Bank of  Oakbrook  Terrace.  He was Chairman of the
Bank Holding Company of American National Bank  of DuPage.  Currently he is the
Chairman of the Board of Inland Mortgage Investment Corporation.

Mr. Goodwin has been in the  housing  industry  for more than 28 years, and has
demonstrated a lifelong interest in  housing-related  issues.  He is a licensed
real estate broker and a member  of  the  National Association of Realtors.  He
has developed thousands of housing units  in the Midwest, New England, Florida,
and the Southwest.   He  is  also  the  author  of a nationally recognized real
estate reference book for the management of residential properties.

Mr. Goodwin has served on  the  Board  of the Illinois State Affordable Housing
Trust Fund for the past 6 years.    He  is an advisor for the Office of Housing
Coordination Services of the State  of  Illinois,  and  a member of the Seniors
Housing Committee of the  National  Multi-Housing  Council.  Recently, Governor
Edgar appointed  him  Chairman  of  the  Housing  Production  Committee for the
Illinois State Affordable Housing Conference.    He  also served as a member of
the Cook County Commissioner's  Economic  Housing Development Committee, and he
was the Chairman of the DuPage County  Affordable Housing Task Force.  The 1992
Catholic  Charities  Award  was  presented  to  Mr.  Goodwin  for  his  work in
addressing affordable housing needs.   The  City  of Hope designated him as the
1980's Man of the Year for the  Illinois  construction industry.  In 1989,  the
Chicago Metropolitan Coalition on Aging presented  Mr. Goodwin with an award in
recognition of his  efforts  in  making  housing  more  affordable to Chicago's
Senior Citizens.  On May 4, 1995, PADS, Inc. (Public Action to Deliver Shelter)
presented Mr. Goodwin  with  an  award,  recognizing  The  Inland  Group as the
leading corporate provider of transitional  housing  for the homeless people of
DuPage County.  Also, Mr. Goodwin  serves as Chairman of New Directions Housing
Corporation, a leading provider of affordable housing in northern Illinois.

Mr. Goodwin is a product  of  Chicago-area schools, and obtained his Bachelor's
and Master's Degrees  from  Illinois  Universities.    Following graduation, he
taught for five years in Chicago  Public  Schools.  His commitment to education
has  continued  through  his  work  with  the  Better  Boys  Foundation's Pilot
Elementary School in  Chicago,  and  the  development  of the Inland Vocational
Training Center  for  the  Handicapped  located  at  Little  City  in Palatine,
Illinois.  He  personally  established  an  endowment  which  funds a perpetual
scholarship program for inner-city  disadvantaged  youth.   In 1990 he received
the Northeastern  Illinois  University  President's  Meritorious Service Award.
Mr. Goodwin  holds  a  Master's  Degree  in  Education  from  Northern Illinois
University, and in 1986, he was awarded an Honorary Doctorate from Northeastern
Illinois University College of Education.    More  than 12 years ago, under Mr.
Goodwin's direction, Inland instituted a  program to train disabled students in
the workplace.  Most of these students  are still employed at Inland today, and
Inland has become  one  of  the  largest  employers  of  the disabled in DuPage
County.  He has served as a member  of the Board of Governors of Illinois State
Colleges and  Universities,  and  he  is  currently  a  trustee  of Benedictine
University.  He was elected  Chairman of Northeastern Illinois University Board
of Trustees in January 1996.


                                     -37-


Mr. Goodwin served as a  member  of  Governor  Jim Edgar's Transition Team.  In
1988 he received  the  Outstanding  Business  Leader  Award  from the Oak Brook
Jaycees and has  been  the  General  Chairman  of  the National Football League
Players Association Mackey Awards  for  the  benefit  of  inner-city youth.  He
served as the recent Chairman  of  the  Speakers  Club of the Illinois House of
Representatives.  In March 1994, he  won  the Excellence in Business Award from
the DuPage Area Association  of  Business  and  Industry.  Additionally, he was
honored by Little Friends on May 17, 1995 for rescuing their Parent-Handicapped
Infant Program when they lost their  lease.    He was the recipient of the 1995
March of Dimes Life Achievement Award  and  was recently recognized as the 1997
Corporate Leader of the Year by the  Oak Brook Area Association of Commerce and
Industry.

    ROBERT H. BAUM (age 53)    has  been  with  The  Inland Group, Inc. and its
affiliates since 1968 and is one of  the four original principals.  Mr. Baum is
Vice Chairman and Executive Vice President-General Counsel of The Inland Group,
Inc.  In his  capacity  as  General  Counsel,  Mr.  Baum is responsible for the
supervision  of  the  legal  activities  of  The  Inland  Group,  Inc.  and its
affiliates.  This responsibility  includes  the  supervision  of The Inland Law
Department and serving as  liaison  with  all  outside  counsel.   Mr. Baum has
served as a member of  the North American Securities Administrators Association
Real Estate Advisory  Committee  and  as  a  member  of the Securities Advisory
Committee to the Secretary  of  State  of  Illinois.    He  is  a member of the
American Corporation Counsel Association and has also been a guest lecturer for
the Illinois State Bar Association.     Mr.  Baum has been admitted to practice
before the Supreme Court of the United  States,  as well as the bars of several
federal courts  of  appeals  and  federal  district  courts  and  the  State of
Illinois.  He received his B.S. Degree from the University of Wisconsin and his
J.D. Degree from Northwestern University School of Law.  Mr. Baum has served as
a director of American National  Bank  of  DuPage.    Currently, he serves as a
director of Westbank, and  is  a  member  of  the Governing Council of Wellness
House, a charitable  organization  that  provides  emotional support for cancer
patients and their families. 

    G. JOSEPH COSENZA (age 53) is  a  Director  and Vice Chairman of The Inland
Group, Inc.    Mr.  Cosenza  oversees,  coordinates  and  directs Inland's many
enterprises and, in addition, immediately  supervises  a staff of eight persons
who engage in property acquisition.  Mr. Cosenza has been a consultant to other
real estate entities and lending institutions on property appraisal methods.

Mr. Cosenza received his B.A.  Degree from Northeastern Illinois University and
his M.S. Degree from  Northern  Illinois  University.    From  1967 to 1968, he
taught at the LaGrange School District  in  Hodgkins, Illinois and from 1968 to
1972, he served as  Assistant  Principal  and  taught in the Wheeling, Illinois
School District.  Mr. Cosenza has been a licensed real estate broker since 1968
and an active member of  various  national  and local real estate associations,
including the National Association of Realtors and the Urban Land Institute.

Mr. Cosenza has also been Chairman  of  the  Board of American National Bank of
DuPage, and has  served  on  the  Board  of  Directors  of  Continental Bank of
Oakbrook Terrace.   He  is  presently  Chairman  of  the  Board  of Westbank in
Westchester, Illinois.






                                     -38-


    ROBERT D. PARKS (age 53)  is Director of The Inland Group, Inc., President,
Chairman  and  Chief  Executive  Officer   of  Inland  Real  Estate  Investment
Corporation and President, Chief Executive Officer, Chief Operating Officer and
Affiliated Director of Inland Real Estate Corporation.

Mr. Parks is responsible for  the ongoing administration of existing investment
programs,  corporate  budgeting  and  administration  for  Inland  Real  Estate
Investment Corporation.   He  oversees  and  coordinates  the  marketing of all
investments and investor relations. 

Prior to joining Inland, Mr.  Parks  was  a  school teacher in Chicago's public
schools.  He received his B.A. degree from Northeastern Illinois University and
his M.A. degree from the  University  of  Chicago.    He is a registered Direct
Participation Program Principal  with  the  National  Association of Securities
Dealers, Inc., and he is a member of the Real Estate Investment Association and
a member of NAREIT.

    NORBERT J.  TREONIS  (age  46)    joined  The  Inland  Group,  Inc. and its
affiliates in 1975 and he is  currently Chairman and Chief Executive Officer of
The Inland Property Management Group, Inc.  and a Director of The Inland Group,
Inc.  He serves on the  Board  of Directors of all Inland subsidiaries involved
in the  property  management,  acquisitions  and  maintenance  of  real estate,
including  Mid-America  Property   Management   Corporation,  and  Metropolitan
Construction Services, Inc.  Mr. Treonis  is charged with the responsibility of
the overall management and leasing  of  all apartment units, retail, industrial
and commercial properties nationwide.

Mr. Treonis is a licensed real estate broker.  He is a past member of the Board
of Directors of American National  Bank  of  DuPage, the Apartment Builders and
Managers Association of Illinois,  the  National  Apartment Association and the
Chicagoland Apartment Association.

Mr. Treonis  has  been  the  Chairman  of  the  Board  of  Directors  of Inland
Commercial Property Management, Inc. since its formation in 1994.

    CATHERINE L. LYNCH (age 38) joined  Inland  in 1989 and is the Treasurer of
Inland Real  Estate  Investment  Corporation.    Ms.  Lynch  is responsible for
managing the Corporate Accounting  Department.    Prior  to joining Inland, Ms.
Lynch worked in the  field  of  public  accounting  for KPMG Peat Marwick since
1980.    She  received  her  B.S.  degree  in  Accounting  from  Illinois State
University.  Ms. Lynch is  a  Certified  Public  Accountant and a member of the
American  Institute  of  Certified  Public  Accountants  and  the  Illinois CPA
Society.  She is registered with the National Association of Securities Dealers
as a Financial Operations Principal.

    PAUL J. WHEELER (age  44)    joined  Inland  in  1982  and is currently the
President of  Inland  Property  Sales,  Inc.,  the  entity  responsible for all
corporately owned  real  estate.    Mr.  Wheeler  received  his  B.A. degree in
Economics from  DePauw  University  and  an  M.B.A.  in Finance/Accounting from
Northwestern University.   Mr.  Wheeler  is  a  Certified Public Accountant and
licensed real estate broker.    For  three  years  prior to joining Inland, Mr.
Wheeler was Vice President/Finance at the real estate brokerage firm of Quinlan
& Tyson, Inc.





                                     -39-


    ROBERTA S. MATLIN (age 52)   joined  Inland in 1984 as Director of Investor
Administration  and  currently  serves  as  Senior  Vice President-Investments.
Prior to that, Ms. Matlin spent 11  years with the Chicago Region of the Social
Security Administration of the  United  States  Department  of Health and Human
Services.  As  Senior  Vice  President-Investments,  she directs the day-to-day
internal operations of  the  General  Partner.    Ms.  Matlin received her B.A.
degree from the University of  Illinois.    She is registered with the National
Association of Securities Dealers, Inc. as a General Securities Principal.

    MARK ZALATORIS (age 39) joined Inland  in 1985 and currently serves as Vice
President of Inland Real  Estate  Investment Corporation.  His responsibilities
include the coordination of due  diligence activities by selling broker/dealers
and is also involved  with  limited  partnership asset management including the
mortgage funds.  Mr.  Zalatoris  is  a  graduate  of the University of Illinois
where he received  a  Bachelors  degree  in  Finance  and  a  Masters degree in
Accounting and Taxation.   He  is  a  Certified  Public  Accountant and holds a
General Securities License with Inland Securities Corporation.

    PATRICIA A. CHALLENGER (age  44)  joined  Inland  in  1985.  Ms. Challenger
serves as Senior Vice President of Inland Real Estate Investment Corporation in
the area of Asset Management.  As  head of the Asset Management Department, she
develops  operating  and   disposition   strategies  for  all  investment-owned
properties.    Ms.  Challenger  received  her  bachelor's  degree  from  George
Washington University and  her  master's  from  Virginia  Tech University.  Ms.
Challenger was selected and  served  from  1980-1984 as Presidential Management
Intern, where she was part of a special government-wide task force to eliminate
waste, fraud and abuse  in  government  contracting  and  also served as Senior
Contract Specialist  responsible  for  capital  improvements  in 109 government
properties.  Ms. Challenger is  a  licensed real estate broker, NASD registered
securities sales representative and is a member of the Urban Land Institute. 

    KELLY TUCEK (age  34)  joined  Inland  in  1989  and  is  an Assistant Vice
President of Inland Real Estate Investment Corporation.  As of August 1996, Ms.
Tucek is responsible for  the  Investment  Accounting Department which includes
all public partnership accounting functions along with quarterly and annual SEC
filings.  Prior to joining Inland, Ms.  Tucek was on the audit staff of Coopers
and Lybrand since  1984.    She  received  her  B.A.  Degree  in Accounting and
Computer Science from North Central College.

    CYNTHIA M. HASSETT (age 37) joined Inland  in 1983 and was a Vice President
of Inland Real Estate Investment Corporation.  Through August 1996, Ms. Hassett
was responsible for  the  Investment  Accounting  Department which includes all
public partnership accounting  functions  along  with  quarterly and annual SEC
filings.  Prior to  joining  Inland,  Ms.  Hassett  was  on  the audit staff of
Altschuler, Melvoin and Glasser since  1980.    She received her B.S. degree in
Accounting from Illinois State University.    Ms. Hassett is a Certified Public
Accountant  and  a  member  of  the  American  Institute  of  Certified  Public
Accountants.

    VENTON J. CARLSTON (age 39)    joined  Inland  in 1985 and is the Assistant
Controller of Inland Real Estate Investment Corporation where he supervises the
corporate  bookkeeping  staff  and   is  responsible  for  financial  statement
preparation and budgeting for Inland Real Estate Investment Corporation and its
subsidiaries.    Prior  to  joining  Inland,  Mr.  Carlston  was  a partnership
accountant with JMB Realty.   He  received  his  B.S. degree in Accounting from
Southern Illinois University.   Mr.  Carlston  is a Certified Public Accountant
and a member of the American  Institute of Certified Public Accountants and the
Illinois CPA Society.    He  is  registered  with  the  National Association of
Securities Dealers, Inc. as a Financial Operations Principal.


                                     -40-


Item 11. Executive Compensation

The General Partner is entitled to  receive a share of cash distributions, when
the cumulative preferred return in excess  of  8%  has been made to the Limited
Partners, and a share of profits or losses as described under the caption "Cash
Distributions" at page 44 and "Allocation of Profits or Losses" at pages 43 and
44 of the Prospectus, and  at  pages  A-6  to A-9 of the Partnership Agreement,
included as an  exhibit  to  the  Prospectus,  which  is incorporated herein by
reference.  Reference is  also  made  to  Note  (4)  of  the Notes to Financial
Statements  (Item  8  of  this  Annual   Report)  for  a  description  of  such
distributions and allocations for 1994.

The Partnership  is  permitted  to  engage  in  various  transactions involving
Affiliates of the General Partner  of  the  Partnership, as described under the
captions "Compensation and Fees" at pages  7  and 8 and "Conflicts of Interest"
at pages 9-11  of  the  Prospectus,  and  at  pages  A-11  through  A-19 of the
Partnership Agreement, included  as  an  exhibit  to  the  Prospectus, which is
incorporated herein by reference.  The relationship of the General Partner (and
its directors and officers) to its Affiliates is set forth above in Item 10.

The General Partner of the Partnership and its Affiliates may be reimbursed for
salaries and direct  expenses  of  employees  of  the  General  Partner and its
Affiliates relating to the administration  of  the Partnership.  In 1996, these
expenses amounted to $47,543, of which $2,752 was unpaid at December 31, 1996.

Affiliates of the General  Partner  earned  $28,820  in management fees for the
year ended  December  31,  1996  in  connection  with  managing  certain of the
Partnership's properties.  All of these were paid prior to December 31, 1996.






























                                     -41-


Item 12. Security Ownership of Certain Beneficial Owners and Management

(a) No person or group is known by the Partnership to own beneficially more    
    than 5% of the outstanding Units of the Partnership

(b) The officers and directors of the General Partner of the Partnership
    own as a group the following Units of the Partnership:


                                 Amount and Nature
                                 of Beneficial                Percent
      Title of Class                  Ownership               of Class
      ----------------------     -------------------       -------------
    Limited Partnership          165.44 Units              Less than 1%
     Units                                                 directly


    No officer or director of the  General Partner of the Partnership possesses
    a right to acquire beneficial ownership of Units of the Partnership.

    All of the outstanding shares of the General Partner of the Partnership are
    owned by an Affiliate or its  officers  and directors as set forth above in
    Item 10.

(c) There exists no arrangement,  known  to  the  Partnership, the operation of
    which may at  a  subsequent  date  result  in  a  change  in control of the
    Partnership.


Item 13. Certain Relationships and Related Transactions

There were  no  significant  transactions  or  business  relationships with the
General Partner, Affiliates or their  management  other than those described in
Items 10 and 11 above and Note (6) of the Notes to Financial Statements (Item 8
of this Annual Report).























                                     -42-


                                    PART IV


Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

    (a)  The Financial Statements listed in the index at page 14 of this Annual
         Report are filed as part of this Annual Report.

    (b)  Exhibits. The following documents are filed as part of this report:

         3  Amended and Restated  Agreement  of Limited Partnership and Amended
         and Restated Certificate of  Limited Partnership, included as Exhibits
         A and B of the Prospectus  dated  August 3, 1987, as supplemented, are
         incorporated herein by reference thereto.

         4  Form  of  Certificate  of  Ownership  representing interests in the
         registrant filed as Exhibit 4  to Registration Statement on Form S-11,
         File No. 33-13509, is incorporated herein by reference thereto.

         28 Prospectus dated August 3, 1987, as supplemented, included in Post-
         effective Amendment No. 4  to  Form  S-11 Registration Statement, File
         No. 33-13509, is incorporated herein by reference thereto.

    (c)  Financial Statement Schedules.

         Financial statement schedules for  the  years ended December 31, 1996,
         1995 and 1994 are submitted herewith.


                                                                    Page
                                                                    ----
         Real Estate and Accumulated Depreciation (Schedule III)...  34

         Schedules not filed:

         All schedules  other  than  those  indicated  in  the  index have been
         omitted as the required information is inapplicable or the information
         is presented in the financial statements or related notes.

    (d)  Reports on Form 8-K:

         None.

No Annual Report or proxy  material  for  the  year  1996  has been sent to the
Partners of the Partnership.   An  Annual  Report  will be sent to the Partners
subsequent to this  filing  and  the  Partnership  will  furnish copies of such
report to the Commission when it is sent to the Partners.











                                     -43-


                                  SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) 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.

                            INLAND'S MONTHLY INCOME FUND, L.P.
                            Inland Real Estate Investment Corporation
                            General Partner



                            By:   Robert D. Parks
                                  Chairman of the Board
                                  and Chief Executive Officer
                            Date: March 24, 1997

Pursuant to the  requirements  of  the  Securities  Exchange  Act of 1934, this
report has  been  signed  below  by  the  following  persons  on  behalf of the
registrant and in the capacities and on the dates indicated:

                            By:   Inland Real Estate Investment Corporation
                                  General Partner



                            By:   Robert D. Parks
                                  Chairman of the Board
                                  and Chief Executive Officer
                            Date: March 24, 1997



                            By:   Patricia A. Challenger
                                  Senior Vice President
                            Date: March 24, 1997



                            By:   Kelly Tucek
                                  Principal Financial Officer
                                  and Principal Accounting Officer
                            Date  March 24, 1997



                            By:   Daniel L. Goodwin
                                  Director
                            Date: March 24, 1997



                            By:   Robert H. Baum
                                  Director
                            Date: March 24, 1997



                                     -44-