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, 2003or

[ ] 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          | 60523                                  
|(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.

Indicate by a checkmark whether the registrant is an accelerated filer (as defined in Securities Exchange Act Rule 12b-2)          __ Yes          X No

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



|           | Part I                                                                                          | Page
|---------- | ----------------------------------------------------------------------------------------------- | ----
|           |                                                                                                 |     
|Item 1.    | Business                                                                                        | 3   
|           |                                                                                                 |     
|Item 2.    | Properties                                                                                      | 6   
|           |                                                                                                 |     
|Item 3.    | Legal Proceedings                                                                               | 8   
|           |                                                                                                 |     
|Item 4.    | Submission of Matters to a Vote of Security Holders                                             | 8   
|           |                                                                                                 |     
|           | Part II                                                                                         |     
|           |                                                                                                 |     
|Item 5.    | Market for the Partnership's Limited Partnership Units and Related Security Holder   Matters    | 8   
|           |                                                                                                 |     
|Item 6.    | Selected Financial Data                                                                         | 9   
|           |                                                                                                 |     
|Item 7.    | Management's Discussion and Analysis of Financial Condition and Results of   Operations         | 10  
|           |                                                                                                 |     
|Item 7(a)  | Quantitative and Qualitative Disclosures About Market Risk                                      | 15  
|           |                                                                                                 |     
|Item 8.    | Financial Statements and Supplementary Data                                                     | 16  
|           |                                                                                                 |     
|Item 9.    | Changes in and Disagreements with Independent Auditors on Accounting and   Financial Disclosure | 35  
|           |                                                                                                 |     
|Item 9(a). | Controls and Procedures                                                                         | 35  
|           |                                                                                                 |     
|           | Part III                                                                                        |     
|           |                                                                                                 |     
|Item 10.   | Directors and Executive Officers of the Registrant                                              | 35  
|           |                                                                                                 |     
|Item 11.   | Executive Compensation                                                                          | 40  
|           |                                                                                                 |     
|Item 12.   | Security Ownership of Certain Beneficial Owners and Management                                  | 41  
|           |                                                                                                 |     
|Item 13.   | Certain Relationships and Related Transactions                                                  | 41  
|           |                                                                                                 |     
|Item 14.   | Principal Accountant Fees and Services                                                          | 41  
|           |                                                                                                 |     
|           | Part IV                                                                                         |     
|           |                                                                                                 |     
|Item 15.   | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                                | 42  
|           |                                                                                                 |     
|           | SIGNATURES                                                                                      | 43  

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PART I

Item 1. Business

Inland's Monthly Income Fund, L.P. was formed on March 26, 1987 to invest in improved residential, retail, industrial and other income producing properties. On August 3, 1987, we commenced an offering of 50,000 (subject to an increase up to 60,000) limited partnership units or units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The offering terminated on August 3, 1988, after we had sold 59,999 units at  $500 per unit, resulting in gross offering proceeds of $29,999,500, not including our general partner's contribution of $500. All of the holders of our units were admitted to our partnership. Inland Real Estate Investment Corporation is our general partner. We acquired seven properties utilizing $25,831,542 of capital proceeds collected. Our limited partners  share in the benefits of ownership of our real property investments in proportion to the number of units held. We repurchased 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.

We are engaged in the business of real estate investment which management considers being a single operating segment. A presentation of information about operating segments would not be material to an understanding of our business taken as a whole.

We acquired fee ownership of the following real property investments:

|Property and Location (a)                      | Square Feet                              | Date of Purchase 
|---------------------------------------------- | ---------------------------------------- | -----------------
|                                               |                                          |                  
|McHenry Plaza                                  | 56,643                                   | 10/19/87         
|Shopping Center                                |                                          | (sold 7/19/00)   
|McHenry, Illinois                              |                                          |                  
|                                               |                                          |                  
|Douglas Nursing Home (c)                       | 65,661                                   | 01/13/88         
|Living and Retirement Center
Mattoon, Illinois | (35 Units occupying 
36,389 square feet) | (Sold 8/24/01)   
|                                               |                                          |                  
|Hillside Nursing Home                          | 21,565                                   | 01/29/88         
|Living Center                                  |                                          | (1 of 3 adj. lots
|Yorkville, Illinois                            |                                          | sold 09/12/97)   
|                                               |                                          |                  
|Scandinavian Health Spa, Inc.                  | 26,040                                   | 04/20/88         
|Health and Tennis Club                         |                                          |                  
|Westlake, Ohio                                 |                                          |                  
|                                               |                                          |                  
|Schaumburg Terrace (c)                         | 186,720                                  | 06/24/88         
|Condominiums Complex                           | (228 Units occupying                     | (sold during     
|Schaumburg, Illinois                           | 186,720 square feet)                     | 1994 & 1995)     
|                                               |                                          |                  
|Wal-Mart - Duncan (b)                          | 68,907                                   | 08/05/88         
|Department Store                               |                                          |                  
|Duncan, Oklahoma                               |                                          |                  
|                                               |                                          |                  
|Wal-Mart - Rantoul                             | 65,930                                   | 08/05/88         
|Department Store                               |                                          | (sold 11/17/00)  
|Rantoul, Illinois                              |                                          |                  

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1. Reference is made to Note 4 of the Notes to Financial Statements (Item 8 of this Annual Report) for additional descriptions of our real property investments.
2. Reference is made to Notes 4 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.
3. Reference is made to Note 5 of the Notes to Financial Statements (Item 8 of this Annual Report) for a description of the sale of our investment property.

Our 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 in Item 2 below to which reference is hereby made.  Our real property investments are located in Illinois, Ohio and Oklahoma.  We have no real property investments located outside the United States.   We do not segregate revenues or assets by geographic region, and such a presentation would not be material to an understanding of our business taken as a whole.

The following is a list of our significant operating leases and the revenues from those leases as a percent of our gross income.

|Significant net operating leases      | 2003 | 2002 | 2001
|------------------------------------- | ---- | ---- | ----
|                                      |      |      |     
|Elite Care Corporation ("Elite")      | 55%  | 51%  | 46% 
|                                      |      |      |     
|Scandinavian Health Spa, Inc. ("SHS") | 25%  | 20%  | 18% 
|                                      |      |      |     
|Wal-Mart Stores, Inc.                 | 18%  | 15%  | 13% 

During January 2000, the leases with Elite were amended and extended for terms of five years each.  As part of the lease extension on the Douglas Living and Retirement Center, Elite requested that they be released from the management of Douglas Towers, the 35-unit retirement apartment center.  As Elite did not request any additional consideration, such as a rent reduction, we agreed and took over management of the apartments in May 2000.  In August 2001, we sold the apartment center on an installment basis.  As of August 1, 2002, the purchaser of the Douglas Towers apartment center had ceased making the interest payments on the amount due to us. We did not record any additional interest income receivable subsequent to the cessation of interest payments. Our general partner continued to monitor the operations of the property. In December 2002, we took over management responsibilities of the property. Over the next several months, management realized that the expenses to hold and market the property were greater than anticipated, and due to poor economic conditions in the property area, it was determined that it would be in the best interest of the investors to sell the property. At that time, management believed that the anticipated sales proceeds would exceed the carrying amount of the mortgage receivable. A foreclosure sale was held on June 11, 2003, and only one bidder expressed interest in the property. Rather than incur significant costs to improve the property, management accepted the offer on the property at the foreclosure sale for approximately $95,000.  As a result of this offer, we recorded $367,318 of bad debt expense relating to the mortgage receivable on the property. The sale was completed on July 15, 2003 and we received $89,655, net of prorations.

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We entered into revised ten-year lease extensions with Elite, which began as of July 1, 2001. Under the new leases, Elite received a 10% rental rate reduction. Effective March 1, 2003, we executed amendments to the Elite leases, due to economic conditions in the nursing home industry, which eliminate the increases in rent over the term of the leases.

Our 2004 business plan is to obtain an extension of the existing mortgage secured by the Duncan Wal-Mart property. The mortgage has a maturity date of April 30, 2004. We continue to market the Scandinavian Health Club for sale, and as of March 22, 2004, we have found a buyer and have entered into an agreement to sell this asset. Provided contingencies are met, the buyer performs and the sale closes, a portion of the sales proceeds will be used to payoff the Duncan Wal-Mart debt and make a distribution to investors. We are currently marketing the Duncan Wal-Mart property for sale. We will monitor the status of the tenant of the nursing homes throughout the course of 2004, and evaluate the possibility of marketing the nursing homes for sale in 2005.

We also compete 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.

We had no employees during 2003.

Our general partner and its affiliates provide services to us. The general partner and its affiliates are reimbursed for salaries and expenses of employees of the general partner and its affiliates relating to the administration of the partnership. An affiliate of the general partner receives a property management fee for management and leasing services relating to our properties.



Access to Our Information

We electronically file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports with the Securities and Exchange Commission (SEC). The public may read and copy any of the reports that are filed with the SEC at the SEC's Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at (800)-SEC-0330. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically.

We make available, free of charge through our general partner's website, and by responding to requests addressed to our director of investor relations, the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports. These reports are available as soon as reasonably practical after such material is electronically filed or furnished to the SEC. Our general partner's website address is www.inland-investments.com. The information contained on this website, or other websites linked to our website, is not part of this document.

Limited Partners wishing to communicate with our general partner can do so by writing to the attention of the general partner care of our partnership at 2901 Butterfield Road, Oak Brook, IL 60523.

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Item 2. Properties

We own directly the properties referred to under Item 1 above to which reference is hereby made for a description of said properties.

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



|                         | 2003 | 2002 | 2001 | 2000 | 1999
|------------------------ | ---- | ---- | ---- | ---- | ----
|                         |      |      |      |      |     
|McHenry Plaza            | N/A  | N/A  | N/A  | N/A  | 89% 
|McHenry, Illinois        |      |      |      |      |     
|                         |      |      |      |      |     
|Douglas Nursing Home     | 100% | 100% | 100% | 100% | 100%
|Mattoon, Illinois        |      |      |      |      |     
|                         |      |      |      |      |     
|Hillside Nursing Home    | 100% | 100% | 100% | 100% | 100%
|Yorkville, Illinois      |      |      |      |      |     
|                         |      |      |      |      |     
|Scandinavian Health Club | 100% | 100% | 100% | 100% | 100%
|Westlake, Ohio           |      |      |      |      |     
|                         |      |      |      |      |     
|Wal-Mart - Duncan (*)    | 100% | 100% | 100% | 100% | 100%
|Duncan, Oklahoma         |      |      |      |      |     
|                         |      |      |      |      |     
|Wal-Mart - Rantoul       | N/A  | N/A  | N/A  | N/A  | 100%
|Rantoul, Illinois        |      |      |      |      |     

(*) This store has been vacated by the lessee, however the lessee continues to pay rent.

The following is a list of average effective annual rents per square foot for our investment properties for each of the last five years:



|                         |   | 2003  | 2002  | 2001  | 2000  | 1999 
|------------------------ | - | ----- | ----- | ----- | ----- | -----
|                         |   |       |       |       |       |      
|McHenry Plaza            | $ | N/A   | N/A   | N/A   | N/A   | 7.10 
|McHenry, Illinois        |   |       |       |       |       |      
|                         |   |       |       |       |       |      
|Douglas Nursing Home (a) |   | 14.79 | 16.77 | 16.77 | 6.46  | 6.46 
|Mattoon, Illinois        |   |       |       |       |       |      
|                         |   |       |       |       |       |      
|Hillside Nursing Home    |   | 17.94 | 20.44 | 20.44 | 17.59 | 17.59
|Yorkville, Illinois      |   |       |       |       |       |      
|                         |   |       |       |       |       |      
|Scandinavian Health Club |   | 14.49 | 13.79 | 13.79 | 13.79 | 13.79
|Westlake, Ohio           |   |       |       |       |       |      
|                         |   |       |       |       |       |      
|Wal-Mart - Duncan        |   | 3.90  | 3.90  | 3.90  | 3.90  | 3.90 
|Duncan, Oklahoma         |   |       |       |       |       |      
|                         |   |       |       |       |       |      
|Wal-Mart - Rantoul       |   | N/A   | N/A   | N/A   | N/A   | 3.57 
|Rantoul, Illinois        |   |       |       |       |       |      

(a) Increase in effective annual rent in 2001 due to sale of Douglas Towers apartment complex.

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The following tables set forth certain information with respect to the amount and expiration of leases for our investment properties:

|                                 | Square Feet |            | Renewal   |   | December 31, 2003 |   | Rent Per   
|-------------------------------- | ----------- | ---------- | --------- | - | ----------------- | - | -----------
|Lessee                           | Leased      | Lease Ends | Options   |   | Annual Rent       |   | Square Foot
|                                 |             |            |           |   |                   |   |            
|Scandinavian Health Club         |             |            |           |   |                   |   |            
|Scandinavian Health Spa, Inc (2) | 26,040      | 09/2013    | -         | $ | 383,231           | $ | 14.72      
|                                 |             |            |           |   |                   |   |            
|Douglas Living Center            |             |            |           |   |                   |   |            
|Elite (3)                        | 29,272      | 6/2011     | 1/5 years |   | 442,833           |   | 15.13      
|                                 |             |            |           |   |                   |   |            
|Hillside Living Center           |             |            |           |   |                   |   |            
|Elite (3)                        | 21,565      | 6/2011     | 1/5 years |   | 396,144           |   | 18.37      
|                                 |             |            |           |   |                   |   |            
|Duncan Wal-Mart (*)              |             |            |           |   |                   |   |            
|Wal-Mart Stores, Inc.            | 68,907      | 1/2014     | 5/5 years |   | 266,440           |   | 3.87       

(*) This store has been vacated by the lessee, however the lessee continues to pay rent.

|Year Ending | Number of Leases | Approx. Gross Leasable Area ("GLA") of Expiring Leases | Annual Base Rent of Expiring | Total Annual Base
Rent | Annual Base Rent Per Sq. Ft. Under Expiring | % of Total GLA Represented By Expiring | % of Annual Base Rent Represented By Expiring
|----------- | ---------------- | ------------------------------------------------------ | ---------------------------- | ---------------------- | ------------------------------------------- | -------------------------------------- | ---------------------------------------------
|Dec 31,     | Expiring         | (square feet)                                          | Leases ($)                   | (1)($)                 | Leases ($)                                  | Leases (%)                             | Leases (%)                                   
|            |                  |                                                        |                              |                        |                                             |                                        |                                              
|2004        | -                | -                                                      | -                            | 1,488,648              | -                                           | -                                      | -                                            
|2005        | -                | -                                                      | -                            | 1,491,903              | -                                           | -                                      | -                                            
|2006        | -                | -                                                      | -                            | 1,501,668              | -                                           | -                                      | -                                            
|2007        | -                | -                                                      | -                            | 1,501,668              | -                                           | -                                      | -                                            
|2008        | -                | -                                                      | -                            | 1,511,755              | -                                           | -                                      | -                                            
|2009        | -                | -                                                      | -                            | 1,535,183              | -                                           | -                                      | -                                            
|2010        | -                | -                                                      | -                            | 1,538,438              | -                                           | -                                      | -                                            
|2011        | 2                | 50,837                                                 | 838,977                      | 1,548,203              | 16.50                                       | 35                                     | 54                                           
|2012        | -                | -                                                      | -                            | 709,226                | -                                           | -                                      | -                                            
|2013        | 1                | 26,040                                                 | 422,291                      | 709,226                | 16.22                                       | 18                                     | 60                                           
|            |                  |                                                        |                              |                        |                                             |                                        |                                              

1. No assumptions have been made regarding the releasing of expired leases. It is the opinion of the general partner that the space will be released at market rates.

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Item 3. Legal Proceedings

We are not subject to any material pending legal proceedings.



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

Consistent with our limited partnership agreement, there were no matters submitted to a vote of our security holders during 2003.







PART II

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

As of March 22, 2004, there were 1,954 holders of our units. 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 we established a unit repurchase program, there are no funds remaining for the repurchase of units through this program.

For the years ended December 31, 2003 and 2002, we paid the following distributions:

|                  |   |           |          
|----------------- | - | --------- | ---------
|Distributions to: |   | 2003      | 2002     
|                  |   |           |          
|General partners  | $ | -         | -        
|Limited partners  |   | 1,810,781 | 2,712,432
|                  |   |           |          
|Total             | $ | 1,810,781 | 2,712,432

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Item 6. Selected Financial Data

INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
For the years ended December 31, 2003, 2002, 2001, 2000 and 1999
(not covered by Independent Auditors' Report)



|                                                    |   | 2003      | 2002       | 2001       | 2000       | 1999      
|--------------------------------------------------- | - | --------- | ---------- | ---------- | ---------- | ----------
|                                                    |   |           |            |            |            |           
|Total assets                                        | $ | 9,509,839 | 10,797,155 | 12,247,882 | 13,169,986 | 20,543,158
|                                                    |   |           |            |            |            |           
|Long-term debt, less current   portion              |   | -         | 1,515,000  | 1,515,000  | 1,515,000  | 2,500,000 
|                                                    |   |           |            |            |            |           
|Total income                                        |   | 1,502,396 | 1,812,078  | 1,989,321  | 2,331,907  | 2,710,052 
|                                                    |   |           |            |            |            |           
|Net income                                          |   | 534,951   | 1,941,520  | 1,479,385  | 3,478,933  | 2,161,095 
|                                                    |   |           |            |            |            |           
|Net income per the one general   partner unit       |   | -         | -          | -          | -          | -         
|                                                    |   |           |            |            |            |           
|Net income allocated per   limited partnership unit |   | 9.02      | 32.75      | 24.95      | 58.68      | 36.45     
|                                                    |   |           |            |            |            |           
|Distributions to limited   partners                 |   | 1,810,781 | 2,712,432  | 2,176,301  | 9,201,636  | 4,262,501 
|                                                    |   |           |            |            |            |           
|Distributions to limited   partners per unit        |   | 30.54     | 45.75      | 36.71      | 156.06     | 71.90     



The above selected financial data should be read in conjunction with the financial statements and related notes appearing elsewhere in this annual report.

The net income per unit and distribution per unit data is based upon the weighted average number of units outstanding of 59,285.65.

The distributions to limited partners represent the total distributions to the limited partners, a portion of which was funded by the general partner.

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

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 our 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 us and our affiliates, including the general partner.

Critical Accounting Policies

On December 12, 2001, the Securities and Exchange Commission issued Financial Reporting Release or FRR No. 60 "Cautionary Advice Regarding Disclosure About Critical Accounting Policies."  A critical accounting policy is one that would materially effect our operations or financial condition, and requires management to make estimates or
judgments in certain circumstances. We believe that our most critical accounting policies relate to how we value our investment properties and mortgage loans receivable, recognize revenue, and our cost capitalization and depreciation policies. These
judgments often result from the need to make estimates about the effect of matters that are inherently uncertain.  The purpose of the FRR is to provide investors with an understanding of how management forms these policies.  Critical accounting policies discussed in this section are not to be confused with accounting principles and methods disclosed in accordance with accounting principles generally accepted in the United States of America or GAAP.  GAAP requires information in financial statements about accounting principles, methods used and disclosures pertaining to significant estimates.  The following disclosure discusses
judgments known to management pertaining to trends, events or uncertainties known which were taken into consideration upon the application of those policies and the likelihood that materially different amounts would be reported upon taking into consideration different conditions and assumptions.

Valuation of Investment Properties -On a quarterly basis, in accordance with Statement of Financial Accounting Standards No. 144, we conduct an impairment analysis to ensure that the carrying value of each property does not exceed its estimated fair value.  If this were to occur, we would be required to record an impairment loss equal to the excess of carrying value over fair value.

In determining the value of an investment property and whether the property is impaired, management considers several factors such as projected rental and vacancy rates, property operating expenses, capital expenditures and interest rates.  The capitalization and discount rates used to determine property valuation are based on the market in which the property is located, length of leases, tenant financial strength, the economy in general, demographics, environment, property location, visibility, age, physical condition and investor return requirements among others. All of the aforementioned factors are considered by management in determining the value of any particular property.  The value of any particular property is sensitive to the actual results of any of these uncertain factors, either individually or taken as a whole.  Should the actual results differ from management's
judgment, the valuation could be negatively or positively affected.

The valuation and possible subsequent impairment of investment properties is a significant estimate that can and does change based on management's continuous process of analyzing each property.

Valuation of Mortgage Loans Receivable-On a quarterly basis, we conduct an analysis to ensure that the carrying value of each mortgage loan receivable is recoverable from the borrower.  If we determine that all or a portion of the receivable is not collectible, we would be required to record an allowance for doubtful accounts equal to the amount estimated to be uncollectible.

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In determining the value of mortgage loans receivable, management considers several factors such as projected sales proceeds and expenses related to the property associated with the mortgage. Should the actual results differ from management's
judgment, the valuation could be negatively or positively affected.

The valuation and possible subsequent allowance for doubtful accounts is a significant estimate that can and does change based on management's continuous process of analyzing each mortgage loan receivable.

Revenue Recognition - Under GAAP, we are required to recognize rental income based on the effective monthly rent for each lease.  The effective monthly rent is equal to the average monthly rent during the term of the lease, not the stated rent for any particular month.  The process, known as "straight-lining" rent, generally has the effect of increasing rental revenues during the early phases of a lease and decreasing rental revenues in the latter phases of a lease. If rental income calculated on a straight-line basis exceeds the cash rent due under the lease, the difference is recorded as an increase in deferred rent receivable and included as a component of rental income in the accompanying Statements of Operations.  If the cash rent due under the lease exceeds rental income calculated on a straight-line basis, the difference is recorded as a decrease in deferred rent receivable and is also included as a component of rental income in the accompanying Statements of Operations.

Cost Capitalization and Depreciation Policies -We review all expenditures and capitalize any item exceeding $5,000 deemed to be an upgrade or a tenant improvement.  If we capitalize more expenditures, current depreciation expense would be higher, however, total current expenses would be lower.  Depreciation expense is computed using the straight-line method.  Buildings and improvements are depreciated based upon estimated useful lives of 30 to 40 years for buildings and improvements and the remaining life of the related lease for tenant improvements.



On August 3, 1987, we commenced an offering of 50,000 (increased to 60,000) limited partnership units or units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The offering terminated on August 3, 1988, after we had sold 59,999 units at $500 per unit, resulting in gross offering proceeds of $29,999,500, not including the general partner's contribution of $500. All of the holders of our units have been admitted to our partnership. We acquired seven properties utilizing $25,831,542 of capital proceeds collected. During 1994 and 1995, we sold the thirty-eight six-unit condominium buildings comprising the Schaumburg Terrace condominium complex. Also, we sold one of the three lots adjacent to the Hillside Living Center during September 1997. In 2000, we sold McHenry Plaza and the Rantoul Wal-Mart. In 2001, we sold the 35-unit retirement apartment center which was part of the Douglas Living and Retirement Center.  As of December 31, 2003, cumulative distributions to limited partners totaled $47,132,472, including $2,095,863 of supplemental capital contributions from the general partner, which represents distributable cash flow from the properties. We repurchased 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.

As of December 31, 2003, we had cash and cash equivalents of $1,229,895, which includes approximately $109,000 expected to be used for the payment of real estate taxes for Douglas and Hillside Living Centers. As of December 31, 2003, we have received prepayments on 36 of the original 37 mortgage loans receivable relating to the sale of Schaumburg Terrace. A portion of these repayment proceeds were included in the distributions to the limited partners during 2003 and in prior years. We intend to use the remaining funds for future distributions and for working capital requirements.

Our $1,515,000 debt, collateralized by the Duncan Wal-Mart, matures on April 30, 2004. We intend to obtain an extension of this loan. We continue to market the Scandinavian Health Club for sale, and as of March 22, 2004, we have found a buyer and have entered into an agreement to sell this asset. Provided contingencies are met, the buyer performs and the sale closes, a portion of the sales proceeds will be used to payoff the Duncan Wal-Mart debt and make a distribution to investors.

-11-

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Due to the payoff of the mortgage receivables relating to the sale of Schaumburg Terrace and additional property expenses incurred relating to Douglas Towers, the properties we own, along with the interest received on the Schaumburg Terrace mortgage receivables, did not generate sufficient cash flow to meet the 8% annualized distributions to the limited partners (paid monthly), in addition to covering all our operating expenses for the year ended December 31, 2003.  As a result, we have relied on working capital retained from the principal payoffs of the Schaumburg Terrace receivable to meet our cash requirements. To the extent that future cash flow is insufficient to meet our requirements, we may rely on working capital reserve, supplemental capital contributions from our general partner, advances from affiliates of our general partner, other short-term financing, or may sell one or more of the properties.

We executed an amendment of the SHS lease through September 30, 2013. Annual base rent increased from $359,094 to $383,231 per year commencing April 1, 2003.  As part of the extension, we paid $400,000 for tenant improvements and equipment at the property.



Transactions with Related Parties

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. Such costs of $68,925, $39,694 and $51,222 are included in professional services to affiliates and general and administrative expenses to affiliates for the years ended December 31, 2003, 2002 and 2001 respectively, of which $11,702 and $3,795 remained unpaid at December 31, 2003 and 2002, 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 $15,656, $15,336 and $21,461 for the years ended December 31, 2003, 2002 and 2001, respectively. Such fees are included in property operating expenses to Affiliates, all of which have been paid as of December 31, 2003.

In connection with the sale of McHenry Plaza Shopping Center on July 19, 2000, the Partnership recorded $68,700 of sales commission payable to an affiliate of the general partner.  Such commission has been deferred until the limited partners receive their original capital plus a return as specified in the partnership agreement.

In connection with the sale of Rantoul Wal-Mart on August 5, 2000, the Partnership recorded $82,500 of sales commission payable to an affiliate of the general partner.  Such commission has been deferred until the limited partners receive their original capital plus a return as specified in the partnership agreement.

In connection with the sale of Douglas Towers on August 24, 2001, the Partnership recorded $5,635 of sales commission payable to an affiliate of the general partner.  This commission was written off against the bad debt expense in 2003.



As of December 31, 2003, we own four operating properties. All 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 gain on the sale of investment property recorded for the years ended December 31, 2003, 2002 and 2001 is the result of deferred gain of $59,482, $649,215 and $218,349, respectively, from the Schaumburg Terrace condominium sales being recognized as cash is received on the related financing extended by the Partnership to the individual purchasers. In addition, for the year ended December 31, 2001, $10,324 of gain was recognized due to the sale of the Douglas Towers 35-unit apartment center.

-12-

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Rental income was $1,465,933, $1,559,885 and $1,642,085 for the years ended December 31, 2003, 2002 and 2001, respectively.  The decrease in 2003 is the result of the modification to the Elite leases to eliminate the increases over the term of the leases. This reduced the effective annual rent received. This decrease is partially offset by the increase in the SHS lease as a result of the April 2003 amendment. In 2002, rent decreased due to the sales of the Douglas Towers apartment center in 2001.

We entered into revised ten-year lease extensions with Elite, which began as of July 1, 2001. Under the new lease, Elite received a 10% rental rate reduction.  Effective March 1, 2003, due to conditions in the nursing home industry, we executed amendments to the Elite leases which eliminate the increases in rent over the term of the leases.

Interest income was $36,463, $187,908 and $288,219 for the years ended December 31, 2003, 2002 and 2001, respectively.  The decrease is due to a decrease in interest income on third party mortgages, as a result of prepayments of mortgage loans receivable and due to a decrease in investment income due to lower interest rates.

Professional services to Affiliates were $28,290, $15,273 and $22,845 for the years ended December 31, 2003, 2002 and 2001, respectively.  The decrease in 2002 was due to a decrease in accounting and legal fees paid to affiliates.

General and administrative expenses to affiliates were $40,635, to $24,421 and $28,377 for the years ended December 31, 2003, 2002 and 2001, respectively. The increase in 2003 is due to increases in investor service expenses, postage and supplies. General and administrative expenses to non-affiliates were $55,858, to $38,727 and $76,888 for the years ended December 31, 2003, 2002 and 2001, respectively.  The increase in general and administrative expenses to non-affiliates for the years ended December 31, 2003 and 2001, as compared to the years ended December 31, 2002, is due primarily to an increase in state taxes paid.

Property operating expenses to non-affiliates were $64,743, $1,043 and $189,243 for the years ended December 31, 2003, 2002 and 2001, respectively. Property operating expenses to non-affiliates decreased for the year ended December 31, 2002, as compared to the year ended December 31, 2001 due to the sale of the Douglas Towers apartment center in 2001.  During 2003, property operating expenses to non-affiliates increased due to property level expenses relating to Douglas Towers that we paid while in the process of obtaining title to the property.



-13-

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Our Partnership Agreement

Our 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, our profits and losses from operations are allocated as follows:

1. Depreciation shall be allocated 99% to the taxable limited partners and 1% to the general partner.
2. 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.
3. 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.

We allocate income to partners such that no partner group will receive an allocation of income which is greater than our net income for the related period.

Our general partner is required to make supplemental capital contributions, if necessary, from time to time in amounts sufficient to allow us to make distributions to the limited partners to provide a noncompounded return on their invested capital equal to 8% per annum.  There were no such contributions by the general partner to fund the cumulative preferred return of 8% per annum for the three-year period ended December 31, 2003.  The cumulative amount of such supplemental capital contributions at December 31, 2003 is $2,095,863.

Off-Balance Sheet Arrangements, Contractual Obligations, Liabilities and Contracts and Commitments

The table below presents our obligations and commitments to make future payments under debt obligations, maintenance contracts and lease agreements as of December 31, 2003.

|Contractual Obligations | Payments due by period
|----------------------- | ----------------------

|               |   |           | Less than |          
|-------------- | - | --------- | --------- | ---------
|               |   | Total     | 1 year    | 1-3 years
|               |   |           |           |          
|Long-Term Debt | $ | 1,515,000 | 1,515,000 | -        

-14-

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Selected Quarterly Financial Data (unaudited)

The following represents the results of operations for each quarter during the years ended December 31, 2003, 2002 and 2001.

|                                                                    |   |         
|------------------------------------------------------------------- | - | --------
|                                                                    |   | 12/31/03
|                                                                    |   |         
|Total income                                                        | $ | 373,801 
|Net income (loss)                                                   |   | 202,316 
|Net income (loss) allocated to the limited   partners               |   | 202,316 
|Net income (loss) per limited partnership unit,   basic and diluted |   | 3.41    
|                                                                    |   |         
|                                                                    |   |         
|                                                                    |   | 12/31/02
|                                                                    |   |         
|Total income                                                        | $ | 450,076 
|Net income                                                          |   | 329,936 
|Net income allocated to the limited partners                        |   | 329,936 
|Net income per limited partnership unit, basic   and diluted        |   | 5.58    
|                                                                    |   |         
|                                                                    |   |         
|                                                                    |   | 12/31/01
|                                                                    |   |         
|Total income                                                        | $ | 507,833 
|Net income                                                          |   | 358,973 
|Net income allocated to the limited partners                        |   | 358,973 
|Net income per limited partnership unit, basic   and diluted        |   | 6.05    

Inflation

Rental income and operating expenses for our 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.

Item 7(a). Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

-15-

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Item 8. Financial Statements and Supplementary Data

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



|                                                                                      | Page
|------------------------------------------------------------------------------------- | ----
|                                                                                      |     
|Independent Auditors' Report                                                          | 17  
|                                                                                      |     
|Financial Statements:                                                                 |     
|                                                                                      |     
|Balance Sheets, December 31, 2003 and 2002                                            | 18  
|                                                                                      |     
|Statements of Operations, for the years ended December 31, 2003, 2002 and 2001        | 20  
|                                                                                      |     
|Statements of Partners' Capital, for the years ended December 31, 2003, 2002 and 2001 | 21  
|                                                                                      |     
|Statements of Cash Flows, for the years ended December 31, 2003, 2002 and 2001        | 22  
|                                                                                      |     
|Notes to Financial Statements                                                         | 24  
|                                                                                      |     
|Real Estate and Accumulated Depreciation (Schedule III)                               | 33  

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.

-16-

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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, 2003 and 2002 the related statements of operations, partners' capital, and cash flows for each of the three years in the period ended December 31, 2003. Our audits also included the financial statement schedule listed in the Index at Item 15(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 auditing standards generally accepted in the United States of America. 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, 2003 and 2002, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, 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

March 26, 2004
Chicago, Illinois

-17-

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INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Balance Sheets
December 31, 2003 and 2002Assets

|                                                                                                                                                                                      |   | 2003       | 2002      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ---------- | ----------
|Current assets:                                                                                                                                                                       |   |            |           
|Cash and cash equivalents (Note 1)                                                                                                                                                    | $ | 1,229,895  | 1,904,517 
|Mortgage and other interest receivable                                                                                                                                                |   | 2,100      | 3,636     
|Current portion of mortgage loans receivable                                                                                                                                          |   | 209,824    | 6,883     
|                                                                                                                                                                                      |   |            |           
|Total current assets                                                                                                                                                                  |   | 1,441,819  | 1,915,036 
|                                                                                                                                                                                      |   |            |           
|Investment properties (including acquisition fees paid to Affiliates of   $1,186,224, as of December 31, 2003 and 2002, respectively)
   (Notes 1, 4 and 5):                          |   |            |           
|Land                                                                                                                                                                                  |   | 1,982,878  | 1,982,878 
|Buildings and improvements                                                                                                                                                            |   | 10,550,722 | 10,150,722
|                                                                                                                                                                                      |   |            |           
|                                                                                                                                                                                      |   | 12,533,600 | 12,133,600
|Less accumulated depreciation                                                                                                                                                         |   | 4,705,305  | 4,403,556 
|                                                                                                                                                                                      |   |            |           
|Net investment properties                                                                                                                                                             |   | 7,828,295  | 7,730,044 
|                                                                                                                                                                                      |   |            |           
|Other assets:                                                                                                                                                                         |   |            |           
|Mortgage loans receivable, less current portion                                                                                                                                       |   | -          | 881,934   
|Deferred loan fees (net of accumulated amortization of $96,870 and     $90,752 at December 31, 2003 and 2002, respectively) (Note 1)                                                  |   | 2,040      | 8,158     
|Deferred leasing fees (including $219,451 paid to Affiliates) (net of     accumulated amortization of $328,932 and $321,315 at December     31, 2003 and 2002, respectively) (Note 1) |   | 15,455     | 23,072    
|Deferred rent receivable (Notes 1 and 6)                                                                                                                                              |   | 222,230    | 238,911   
|                                                                                                                                                                                      |   |            |           
|Total other assets                                                                                                                                                                    |   | 239,725    | 1,152,075 
|                                                                                                                                                                                      |   |            |           
|Total assets                                                                                                                                                                          | $ | 9,509,839  | 10,797,155



See accompanying notes to financial statements.

-18-

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INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Balance Sheets
(continued)
December 31, 2003 and 2002Liabilities and Partners' Capital

|                                                                                                                                                                |   | 2003         | 2002        
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------ | ------------
|Current liabilities:                                                                                                                                            |   |              |             
|Accounts payable and accrued expenses                                                                                                                           | $ | 57,945       | 11,585      
|Accrued real estate taxes                                                                                                                                       |   | 2,500        | 2,500       
|Distributions payable (Note 8)                                                                                                                                  |   | 110,778      | 114,175     
|Due to Affiliates (Note 3)                                                                                                                                      |   | 11,702       | 3,795       
|Deposits held for others                                                                                                                                        |   | 108,607      | 105,222     
|Current portion of long-term debt (Note 7)                                                                                                                      |   | 1,515,000    | -           
|Current portion of deferred gain on sale of investment property                                                                                                 |   | 58,121       | 1,742       
|                                                                                                                                                                |   |              |             
|Total current liabilities                                                                                                                                       |   | 1,864,653    | 239,019     
|                                                                                                                                                                |   |              |             
|Deferred loan fees (Note 1)                                                                                                                                     |   | 176          | 800         
|Long-term debt (Note 7)                                                                                                                                         |   | -            | 1,515,000   
|Commission payable to Affiliates                                                                                                                                |   | 151,200      | 156,835     
|Deferred gain on sale of investment property, less current portion   (Note 5)                                                                                   |   | -            | 115,861     
|                                                                                                                                                                |   |              |             
|Total liabilities                                                                                                                                               |   | 2,016,029    | 2,027,515   
|                                                                                                                                                                |   |              |             
|Partners' capital (deficit) (Notes 1 and 2):                                                                                                                    |   |              |             
|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, 59,285.65 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                                                                                                                                           |   | 26,213,080   | 25,678,129  
|Cumulative distributions                                                                                                                                        |   | (47,132,472) | (45,321,691)
|                                                                                                                                                                |   |              |             
|                                                                                                                                                                |   | 7,530,053    | 8,805,883   
|                                                                                                                                                                |   |              |             
|Total Partners' capital                                                                                                                                         |   | 7,493,810    | 8,769,640   
|                                                                                                                                                                |   |              |             
|Total liabilities and Partners' capital                                                                                                                         | $ | 9,509,839    | 10,797,155  



See accompanying notes to financial statements.

-19-

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INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Statements of Operations
For the years ended December 31, 2003, 2002 and 2001



|                                                                                                              |   | 2003      | 2002      | 2001     
|------------------------------------------------------------------------------------------------------------- | - | --------- | --------- | ---------
|                                                                                                              |   |           |           |          
|Income:                                                                                                       |   |           |           |          
|Rental income (Notes 1 and 6)                                                                                 | $ | 1,465,933 | 1,559,885 | 1,642,085
|Interest income                                                                                               |   | 36,463    | 187,908   | 288,219  
|Other income                                                                                                  |   | -         | 64,285    | 59,017   
|                                                                                                              |   |           |           |          
|                                                                                                              |   | 1,502,396 | 1,812,078 | 1,989,321
|Expenses:                                                                                                     |   |           |           |          
|Professional services to Affiliates                                                                           |   | 28,290    | 15,273    | 22,845   
|Professional services to non-affiliates                                                                       |   | 31,881    | 34,035    | 34,333   
|General and administrative expenses to Affiliates                                                             |   | 40,635    | 24,421    | 28,377   
|General and administrative expenses to non-affiliates                                                         |   | 55,858    | 38,727    | 76,888   
|Property operating expenses to Affiliates                                                                     |   | 15,656    | 15,336    | 21,461   
|Property operating expenses to non-affiliates                                                                 |   | 64,743    | 1,043     | 189,243  
|Interest expense to non-affiliates                                                                            |   | 107,062   | 107,062   | 107,062  
|Bad debt expense                                                                                              |   | 367,318   | -         | -        
|Depreciation                                                                                                  |   | 301,749   | 273,177   | 246,780  
|Amortization of deferred loan and leasing fees                                                                |   | 13,735    | 10,699    | 11,620   
|                                                                                                              |   |           |           |          
|                                                                                                              |   | 1,026,927 | 519,773   | 738,609  
|                                                                                                              |   |           |           |          
|Net operating income                                                                                          |   | 475,469   | 1,292,305 | 1,250,712
|Gain on sale of investment property (Note 5)                                                                  |   | 59,482    | 649,215   | 228,673  
|                                                                                                              |   |           |           |          
|Net income                                                                                                    | $ | 534,951   | 1,941,520 | 1,479,385
|                                                                                                              |   |           |           |          
|Net income allocated to (Note 2):                                                                             |   |           |           |          
|General Partner                                                                                               | $ | -         | -         | -        
|Limited Partners                                                                                              |   | 534,951   | 1,941,520 | 1,479,385
|                                                                                                              |   |           |           |          
|Net income                                                                                                    | $ | 534,951   | 1,941,520 | 1,479,385
|                                                                                                              |   |           |           |          
|Net income per Unit allocated to Limited Partners per weighted average Limited Partnership Units of 59,285.65 | $ | 9.02      | 32.75     | 24.95    



See accompanying notes to financial statements.

-20-

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INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Statements of Partners' Capital
For the years ended December 31, 2003, 2002 and 2001



|                                                                                                              |   | General  | Limited     |            
|------------------------------------------------------------------------------------------------------------- | - | -------- | ----------- | -----------
|                                                                                                              |   | Partner  | Partners    | Total      
|                                                                                                              |   |          |             |            
|Balance (deficit) January 1, 2001                                                                             | $ | (36,243) | 10,273,711  | 10,237,468 
|                                                                                                              |   |          |             |            
|Net income (Note 2)                                                                                           |   | -        | 1,479,385   | 1,479,385  
|Distributions to Limited Partners ($36.71 per weighted   average of Limited Partnership Units of 59,285.65)   |   | -        | (2,176,301) | (2,176,301)
|                                                                                                              |   |          |             |            
|Balance (deficit) December 31, 2001                                                                           |   | (36,243) | 9,576,795   | 9,540,552  
|                                                                                                              |   |          |             |            
|Net income (Note 2)                                                                                           |   | -        | 1,941,520   | 1,941,520  
|Distributions to Limited Partners ($45.75 per weighted   average of Limited Partnership Units of 59,285.65)   |   | -        | (2,712,432) | (2,712,432)
|                                                                                                              |   |          |             |            
|Balance (deficit) December 31, 2002                                                                           |   | (36,243) | 8,805,883   | 8,769,640  
|                                                                                                              |   |          |             |            
|Net income (Note 2)                                                                                           |   | -        | 534,951     | 534,951    
|Distributions to Limited Partners ($30.54 per   weighted average of Limited Partnership Units of   59,285.65) |   | -        | (1,810,781) | (1,810,781)
|                                                                                                              |   |          |             |            
|Balance (deficit) December 31, 2003                                                                           | $ | (36,243) | 7,530,053   | 7,493,810  
|                                                                                                              |   |          |             |            



See accompanying notes to financial statements.

-21-

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INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Statements of Cash Flows
For the years ended December 31, 2003, 2002 and 2001



|                                                                                      |   | 2003        | 2002        | 2001       
|------------------------------------------------------------------------------------- | - | ----------- | ----------- | -----------
|Cash flows from operating activities:                                                 |   |             |             |            
|Net income                                                                            | $ | 534,951     | 1,941,520   | 1,479,385  
|Adjustments to reconcile net income to net cash     provided by operating activities: |   |             |             |            
|Gain on sale of investment property                                                   |   | -           | -           | (10,324)   
|Recognition of deferred gain on sale of property                                      |   | (59,482)    | (649,215)   | (218,349)  
|Bad debt expense                                                                      |   | 367,318     | -           | -          
|Depreciation                                                                          |   | 301,749     | 273,177     | 246,780    
|Amortization of deferred loan and leasing fees                                        |   | 13,735      | 10,699      | 11,620     
|Changes in assets and liabilities:                                                    |   |             |             |            
|Accounts and rents receivable                                                         |   | -           | -           | 20,278     
|Mortgage and other interest receivable                                                |   | 1,536       | 18,900      | 1,230      
|Other current assets                                                                  |   | -           | -           | 289        
|Deferred rent receivable                                                              |   | 16,681      | (107,592)   | 67,117     
|Accounts payable and accrued expenses                                                 |   | 46,360      | 1,111       | 10,474     
|Due to Affiliates                                                                     |   | 7,907       | (3,644)     | (1,772)    
|Deferred loan fees                                                                    |   | (624)       | (7,761)     | (5,538)    
|                                                                                      |   |             |             |            
|Net cash provided by operating activities                                             |   | 1,230,131   | 1,477,195   | 1,601,190  
|                                                                                      |   |             |             |            
|Cash flows from investing activities:                                                 |   |             |             |            
|Proceeds from sale of investment property                                             |   | -           | -           | 33,945     
|Principal payments received on mortgage loans     receivable                          |   | 306,040     | 2,163,315   | 717,044    
|Capital expenditures                                                                  |   | (400,000)   | -           | -          
|                                                                                      |   |             |             |            
|Net cash provided by investing activities                                             |   | (93,960)    | 2,163,315   | 750,989    
|                                                                                      |   |             |             |            
|Cash flows from financing activities:                                                 |   |             |             |            
|Cash distributions                                                                    |   | (1,814,178) | (2,721,265) | (2,180,705)
|Deposits held for others                                                              |   | 3,385       | (11,473)    | (11,234)   
|                                                                                      |   |             |             |            
|Net cash used in financing activities                                                 |   | (1,810,793) | (2,732,738) | (2,191,939)



See accompanying notes to financial statements.

-22-

---

INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Statements of Cash Flows
(continued)
For the years ended December 31, 2003, 2002 and 2001



|                                                          |   | 2003      | 2002      | 2001     
|--------------------------------------------------------- | - | --------- | --------- | ---------
|                                                          |   |           |           |          
|Net increase (decrease) in cash and cash equivalents      | $ | (674,622) | 907,772   | 160,240  
|Cash and cash equivalents at beginning of year            |   | 1,904,517 | 996,745   | 836,505  
|                                                          |   |           |           |          
|Cash and cash equivalents at end of year                  | $ | 1,229,895 | 1,904,517 | 996,745  
|                                                          |   |           |           |          
|                                                          |   |           |           |          
|Cash paid for interest                                    | $ | 116,155   | 107,062   | 97,969   
|                                                          |   |           |           |          
|                                                          |   |           |           |          
|Supplemental disclosure of non-cash investing activities: |   |           |           |          
|                                                          |   |           |           |          
|Sale of investment property:                              |   |           |           |          
|Reduction of investment in property                       | $ | -         | -         | 480,594  
|Mortgage loan receivable                                  |   | -         | -         | (462,608)
|Gain on sale                                              |   | -         | -         | 10,324   
|Commission payable to Affiliates                          |   | -         | -         | 5,635    
|                                                          |   |           |           |          
|Proceeds from sale of investment property                 | $ | -         | -         | 33,945   



See accompanying notes to financial statements

-23-

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INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
For the years ended December 31, 2003, 2002 and 2001

(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, not including the General Partner's contribution of $500. All of the holders of these Units were admitted to the Partnership.  Inland  Real Estate Investment Corporation is the General Partner. 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. The Partnership repurchased 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 preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") 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.

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

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

On January 1, 2003, the Partnership adopted Financial Accounting Standards Board ("FASB") Interpretation No. 45 ("FIN 45") "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, an interpretation of FASB Statements No. 5, 57 and 107 and a rescission of FASB Interpretation No. 34". FIN 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees issued. FIN 45 also clarifies that a guarantor is required to recognize, at inception of a guarantee, a liability for the fair value of the obligation undertaken. The adoption of FIN 45 did not have a material effect on the Partnership's financial statements.





-24-

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INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)

In May 2003, the FASB issued Statement No. 150 ("SFAS 150") "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity".  This statement establishes standards for classifying and measuring certain financial instruments as liabilities that embody obligations of the issuer and have characteristics of both liabilities and equity. SFAS No. 150 is effective for all financial instruments created or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. Management of the Partnership does not anticipate that the provisions of SFAS No. 150 will have an impact on the Partnership's financial condition and results of operations.

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 No. 121") requires the Partnership to 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 properties estimated fair value. As of December 31, 2001, the Partnership had not recognized any such impairment losses under SFAS 121.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", ("SFAS No. 144").  SFAS 144 addresses accounting and reporting for the impairment or disposal of long-lived assets.  This statement supersedes SFAS No. 121.  The Partnership adopted the provisions of this statement beginning January 1, 2002.  SFAS No. 144 established new rules for the recognition, measurement and reporting of long-lived assets which are impaired and either held for sale or in use by the Partnership. The adoption of this statement did not have a material impact on the financial position or results of operations of the Partnership.

A presentation of information about operating segments as required in SFAS No.  131  "Disclosures About Segments of an Enterprise and Related Information" would not be material to an understanding of the Partnership's business taken as a whole as the Partnership is engaged in the business of real estate investment which management considers to be a single operating segment.

Effective January 1, 2001, the Partnership adopted the provisions of SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities", as amended by SFAS Nos. 137, 138 and 149. This statement standardizes the accounting for derivative instruments by requiring that an entity recognize those items as assets or liabilities in the statements of financial position and measure them at fair value.  It also provides for matching the timing of gain or loss recognition on the hedging instrument with the recognition of (a) the changes in fair value of the hedged asset or liability attributable to the hedged risk or (b) the earnings effect of the hedged forecasted transaction.  The net impact of the adoption of SFAS No. 133 had no effect on the Partnership's financial statements.

Depreciation expense is computed using the straight-line method over the following estimated useful lives. Buildings and improvements are based upon estimated useful lives of 30 to 40 years. Repair and maintenance expenses are charged to operations as incurred. Significant improvements are capitalized and depreciated over their estimated useful lives. Tenant improvements are depreciated over the related lease term.

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

-25-

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INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)

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.

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 GAAP. The Federal income tax return has been prepared from such records after making appropriate adjustments relating to depreciation and the Supplemental Capital Contributions (Note 2) 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:





|2003                                    | 2002
|--------------------------------------- | ----
|                                        |     
|                                        |     
|                                        |     
|Total assets                            | $   
|                                        |     
|Partners' capital (deficit):            |     
|General Partner                         |     
|Limited Partners                        |     
|                                        |     
|Net income (loss):                      |     
|General Partner                         |     
|Limited Partners                        |     
|                                        |     
|Net income per Limited Partnership Unit |     

The net income per Unit is based upon the weighted average number of Units of 59,285.65.

-26-

---

INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)

(2) 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:

1. Depreciation shall be allocated 99% to the taxable Limited Partners and 1% to the General Partner.
2. 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.
3. 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.  There were no such contributions by the General Partner to fund the cumulative preferred return of 8% per annum for the three-year period ended December 31, 2003.  The cumulative amount of such Supplemental Capital Contributions at December 31, 2003 is $2,095,863.

-27-

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INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)

(3) 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 $11,702 and $3,795 remained unpaid at December 31, 2003 and 2002, 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 $15,656, $15,336 and $21,461 for the years ended December 31, 2003, 2002 and 2001, respectively. Such fees are included in property operating expenses to Affiliates, all of which have been paid as of December 31, 2003.

In connection with the sale of McHenry Plaza Shopping Center on July 19, 2000, the Partnership recorded $68,700 of sales commission payable to an affiliate of the general partner.  Such commission has been deferred until the limited partners receive their original capital plus a return as specified in the partnership agreement.

In connection with the sale of Rantoul Walmart on August 5, 2000, the Partnership recorded $82,500 of sales commission payable to an affiliate of the general partner.  Such commission has been deferred until the limited partners receive their original capital plus a return as specified in the partnership agreement.

In connection with the sale of Douglas Towers on August 24, 2001, the Partnership recorded $5,635 of sales commission payable to an affiliate of the general partner. This commission was written off against the bad debt expense in 2003.

(4) Investment Properties

Scandinavian Health Spa, Inc., 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 total cost of this property to the Partnership was $3,068,930, which includes the purchase price of $2,760,000 and acquisition costs of $308,930. The original lease was scheduled to expire in December 2004 and the tenant had the option to extend the lease for two additional five-year periods.

In 2003, the Partnership and tenant executed an amendment of this lease through September 30, 2013. Annual base rent increased from $359,094 to $383,231 per year commencing April 1, 2003.  As part of the extension, the Partnership paid $400,000 for tenant improvements and equipment at the property.

-28-

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INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)

Duncan Wal-Mart, Duncan, Oklahoma



Douglas Living and Retirement Center, Mattoon, Illinois



The Partnership sold the apartment center in August 2001 on an installment basis. As of August 1, 2002, the purchaser of the Douglas Towers apartment center had ceased making the interest payments on the amount due to the Partnership. The Partnership did not record any additional interest income receivable subsequent to the cessation of interest payments. The General Partner continued to monitor the operations of the property. In December 2002, the Partnership was appointed mortgagee in possession and took over management responsibilities of the property. Over the next several months, management realized that the expenses to hold and market the property were greater than anticipated, and due to poor economic conditions in the property area, it was determined that it would be in the best interest of the investors to sell the property. At that time, management believed that the anticipated sales proceeds would exceed the carrying amount of the mortgage receivable. A foreclosure sale was held on June 11, 2003, and only one bidder expressed interest in the property. Rather than incur significant costs to improve the property, management accepted the offer on the property at the foreclosure sale for approximately $95,000.  As a result of this offer, the Partnership recorded $367,318 of bad debt expense relating to the mortgage receivable on the property. The sale was completed on July 15, 2003 and the Partnership received $89,655, net of prorations.



-29-

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INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)



Hillside Living Center, Yorkville, Illinois





Cost and accumulated depreciation of the above properties as of December 31, are summarized as follows:

|                              |   | 2003      | 2002     
|----------------------------- | - | --------- | ---------
|                              |   |           |          
|Health and Tennis Club:       |   |           |          
|Cost                          | $ | 3,468,930 | 3,068,930
|Less accumulated depreciation |   | 1,333,578 | 1,222,149
|                              |   |           |          
|                              |   | 2,135,352 | 1,846,781
|                              |   |           |          
|Nursing Homes:                |   |           |          
|Cost                          |   | 6,026,123 | 6,026,123
|Less accumulated depreciation |   | 2,413,888 | 2,285,698
|                              |   |           |          
|                              |   | 3,612,235 | 3,740,425
|                              |   |           |          
|Department Stores:            |   |           |          
|Cost                          |   | 3,038,547 | 3,038,547
|Less accumulated depreciation |   | 957,839   | 895,709  
|                              |   |           |          
|                              |   | 2,080,708 | 2,142,838
|                              |   |           |          
|Total                         | $ | 7,828,295 | 7,730,044

-30-

---

INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)

(5) Gain on Sale of Investment Property

As of December 31, 1995, the Partnership had 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 Partnership has recorded $59,482, $649,215 and $218,349 of gain as a result of these installment sales in 2003, 2002 and 2001, respectively, as principal payments were received. As of December 31, 2003, the Partnership has received prepayments on 36 of the original 37 mortgage loans receivable. The current principal balance of the remaining loan is $209,824. This loan requires monthly principal and interest payments totaling approximately $1,800 based on an interest rate of 8.625% per annum and matures October 2004. The remaining deferred gain of $58,121 as of December 31, 2003 will be recognized as principal payments are received on the remaining mortgage loan receivable.

At December 31, 2003 and 2002, the fair market value of the mortgage loans receivable approximated their carrying value.





(6)  Operating Leases



The following is a list of the Partnership's significant operating leases and the revenues from those leases as a percent of the Partnership's operating income.



|Significant net operating leases    | 2003 | 2002 | 2001
|----------------------------------- | ---- | ---- | ----
|                                    |      |      |     
|Elite Care Corporation "Elite"      | 55%  | 51%  | 46% 
|                                    |      |      |     
|Scandinavian Health Spa, Inc. "SHS" | 25%  | 20%  | 18% 
|                                    |      |      |     
|Wal-Mart Stores, Inc.               | 18%  | 15%  | 13% 
|                                    |      |      |     

-31-

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INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Notes to Financial Statements
(continued)

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 a decrease of $16,681 in 2003, an increase of $107,592 in 2002 and a decrease of $67,117 in 2001, of rental income for the period of occupancy for which stepped rent increases apply and $222,230 and $238,911 in related deferred rent receivable as of December 31, 2003 and 2002, respectively. These amounts are expected to be collected over the terms of the related leases as scheduled rent payments are made.

Remaining lease terms of the Partnership's properties range from seven years to ten years. Minimum lease payments to be received in the future from operating leases are as follows:



|2004       | $ | 1,488,648 
|---------- | - | ----------
|2005       |   | 1,491,903 
|2006       |   | 1,501,668 
|2007       |   | 1,501,668 
|2008       |   | 1,511,755 
|Thereafter |   | 5,539,126 
|           |   |           
|Total      | $ | 13,034,768

No assumptions have been made regarding the releasing of expiring leases.

(7) Long-Term Debt

On April 30, 1999, the Partnership refinanced the original $1,700,000 loan collateralized by the Rantoul Wal-Mart. The replacement loan was for $2,500,000 and was collateralized by the Rantoul Wal-Mart and the Duncan Wal-Mart. Due to the sale of the Rantoul Wal-Mart, $985,000 was repaid. The replacement loan bears an interest rate of 6.97% as compared to the interest rate of 9.75% on the original loan. The replacement loan requires monthly interest only payments and matures on April 30, 2004. The Partnership distributed excess refinancing proceeds to the limited partners on June 10, 1999. The lender has agreed to extend this loan until October 30, 2004.

The fair market value of mortgages payable is the amount at which the instrument could be exchanged in a current transaction between willing parties. The fair market value of the Partnership's mortgage is estimated to be $1,520,000 and $1,533,000 at December 31, 2003 and 2002, respectively. The Partnership estimates the fair value of its mortgages payable by discounting the future cash flows of each instrument at rates currently offered to the Partnership for similar debt instruments of comparable maturities by the Partnership's lenders.

(8)  Subsequent Events

The Partnership paid distributions of $110,778, $110,472 and $103,345 on January 10, 2004, February 10, 2004 and March 10, 2004, respectively.

-32-

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INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2003



|                      |   |             | Initial Cost to Partnership(A) |              | Gross amount at which carried at end of period (B) |              |               |           
|--------------------- | - | ----------- | ------------------------------ | ------------ | -------------------------------------------------- | ------------ | ------------- | ----------
|                      |   |             |                                | Building and | Costs Capitalized Subsequent to                    | Land and     | Buildings and | Total     
|                      |   | Encumbrance | Land                           | improvements | Acquisition                                        | improvements | improvements  | (C)       
|                      |   |             |                                |              |                                                    |              |               |           
|Douglas Nursing Home  |   |             |                                |              |                                                    |              |               |           
|Living/Retirement     |   |             |                                |              |                                                    |              |               |           
|Center                |   |             |                                |              |                                                    |              |               |           
|Mattoon, IL           | $ | -           | 411,778                        | 3,162,687    | 5,385                                              | 328,422      | 2,526,762     | 2,855,184 
|                      |   |             |                                |              |                                                    |              |               |           
|Hillside Nursing Home |   |             |                                |              |                                                    |              |               |           
|Living Center         |   |             |                                |              |                                                    |              |               |           
|Yorkville, IL         |   | -           | 232,034                        | 2,963,679    | -                                                  | 207,260      | 2,963,679     | 3,170,939 
|                      |   |             |                                |              |                                                    |              |               |           
|Scandinavian Health   |   |             |                                |              |                                                    |              |               |           
|Spa Health and        |   |             |                                |              |                                                    |              |               |           
|Tennis Club           |   |             |                                |              |                                                    |              |               |           
|Westlake, OH          |   | -           | 583,204                        | 2,485,726    | 400,000                                            | 583,204      | 2,885,726     | 3,468,930 
|                      |   |             |                                |              |                                                    |              |               |           
|Wal-Mart - Duncan     |   |             |                                |              |                                                    |              |               |           
|Department Store      |   |             |                                |              |                                                    |              |               |           
|Duncan, OK            |   | 1,515,000   | 863,992                        | 2,174,555    | -                                                  | 863,992      | 2,174,555     | 3,038,547 
|                      |   |             |                                |              |                                                    |              |               |           
|                      | $ | 1,515,000   | 2,091,008                      | 10,786,647   | 405,385                                            | 1,982,878    | 10,550,722    | 12,533,600

-33-

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INLAND'S MONTHLY INCOME FUND, L.P.
(a limited partnership)
Schedule III (continued)
Real Estate and Accumulated Depreciation
December 31, 2003, 2002 and 2001



Notes:

1. 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.
2. The aggregate cost of real estate owned at December 31, 2003 for federal income tax purposes was approximately $12,534,000 (unaudited).
3. Reconciliation of real estate owned:



|                             |   | 2003       | 2002       | 2001      
|---------------------------- | - | ---------- | ---------- | ----------
|                             |   |            |            |           
|Balance at beginning of year | $ | 12,133,600 | 12,133,600 | 12,858,266
|Additions                    |   | 400,000    | -          | -         
|Disposals                    |   | -          | -          | (724,666) 
|                             |   |            |            |           
|Balance at end of year       | $ | 12,533,600 | 12,133,600 | 12,133,600





|Balance at beginning of year | $ | 4,403,556 | 4,130,379 | 4,127,671
|---------------------------- | - | --------- | --------- | ---------
|Depreciation expense         |   | 301,749   | 273,177   | 246,780  
|Disposals                    |   | -         | -         | (244,072)
|                             |   |           |           |          
|Balance at end of year       | $ | 4,705,305 | 4,403,556 | 4,130,379

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

There were no disagreements on accounting or financial disclosure matters during 2003.



The general partner conducted, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by the Annual Report.  Based upon that evaluation, the principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information that is required to be disclosed in the periodic reports that we must file with the Securities and Exchange Commission.

There have been no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.



PART III

Item 10.  Directors and Executive Officers of the Registrant

Our general partner, Inland Real Estate Investment Corporation or IREIC, 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 our 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 us are as follows.  Ages listed are as January 1, 2004.





|                     | 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          
|Brenda G. Gujral     | President and Chief Operating Officer-IREIC
|Catherine L. Lynch   | Treasurer-IREIC                            
|Roberta S. Matlin    | Vice President-Investments                 
|Patricia A. DelRosso | Vice President-Asset Management            
|Kelly Tucek          | Vice President-Partnership Accounting      

-35-

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DANIEL L. GOODWIN (age 60) has been with Inland since 1968 and is one of the four original principals. Mr. Goodwin is Chairman and CEO of The Inland Real Estate Group, Inc., headquartered in Oak Brook, Illinois. The Inland Real Estate Group of Companies is comprised of independent real estate investment and financial companies, with managed assets in excess of $5 billion, doing business nationwide.  With 35 years experience in real estate investment, commercial real estate brokerage, land development and construction, and mortgage lending, Inland is one of the nation's largest privately held real estate companies.

Mr. Goodwin has served as a Director of the Avenue Bank of Oak Park and as a Director of the Continental Bank of Oakbrook Terrace. He has been Chairman of the Bank Holding Company of American National Bank of DuPage. Currently, he is the Chairman of the Board of Inland Bancorp and Chairman of Inland Mortgage Corporation.  Recently he organized the new Westbank State Bank and has overseen the underwriting and issuance of bond financing for real estate developments including Benedictine University and DuPage Airport.  He also oversees numerous stock market investment portfolios and is the advisor for a publicly traded mutual fund.

Mr. Goodwin has been in the housing industry for more than 35 years, and has demonstrated a lifelong interest in housing-related issues. He is a member of the National Association of Realtors, the Illinois Association of Realtors and the Northern Illinois Commercial Association of Realtors.  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 six years. He served as an advisor for the Office of Housing Coordination Services of the State of Illinois, and as a member of the Seniors Housing Committee of the National Multi-Housing Council.  He has served as Chairman of the DuPage County Affordable Housing Task Force.  Mr. Goodwin also serves as Chairman of New Directions Housing Corporation, which provides affordable housing in the Midwest.

A product of Chicago-area schools, and Mr. Goodwin obtained his Bachelor's and Master's Degrees from Illinois state universities. Following graduation, he taught for five years in the Chicago Public Schools. Mr. Goodwin has served as a member of the Board of Governors of Illinois State Colleges and Universities.  He is Vice Chairman of the Board of Trustees of Benedictine University, and Chairman of the Northeastern Illinois University Board of Trustees.

ROBERT H. BAUM (age 60) has been with Inland 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 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 and is a licensed real estate broker. He has served as a director of American National Bank of DuPage and currently serves as a director of Westbank. Mr. Baum also is a member of the Governing Council of Wellness House, a charitable organization that provides educational and emotional support for cancer patients and their families.

-36-

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G. JOSEPH COSENZA (age 60) has been with Inland since 1968 and is one of the four original principals. Mr. Cosenza is a Director and Vice Chairman of The Inland Group, Inc. and oversees, coordinates and directs Inland's many enterprises. In addition, Mr. Cosenza immediately supervises a staff of nineteen persons who engage in property acquisition. Mr. Cosenza has been a consultant to other real estate entities and lending institutions on property appraisal methods. He has directly overseen the purchase of close to $8 billion of income producing real estate from 1968 to the present.

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 in the LaGrange, Illinois School District 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 was the Chairman and is presently a Director on the Board of Westbank in Westchester, Hillside and Lombard, Illinois.

ROBERT D. PARKS  (age 60) has been with Inland since 1968 and is one of the four original principals; Chairman of Inland Real Estate Investment Corporation and Director of Inland Securities Corporation. Mr. Parks is president, chief executive officer, and a director of Inland Real Estate Corporation. He is Chairman, Chief Executive Officer and Affiliated Director of Inland Retail Real Estate Trust, Inc. and Inland Western Retail Real Estate Trust, Inc.  He is a director of Inland Real Estate Advisory Services, Inc., Inland Investment Advisors, Inc., Partnership Ownership Corp., Inland Southern Acquisitions, Inc. and Inland Southeast Investment Corp., and he is a Trustee of Inland Mutual Fund Trust.

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 Limited Principal with the National Association of Securities Dealers, Inc. He is also a member of the Real Estate Investment Association, the Financial Planning Association, the Foundation for Financial Planning, as well as a member of the National Association of Real Estate Investments Trusts, Inc.

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BRENDA G. GUJRAL (age 62) is President, Chief Operating Officer and a director of Inland Real Estate Investment Corporation (IREIC). She is also President, Chief Operating Officer and a director of Inland Securities Corporation (ISC), a member firm of the National Association of Securities Dealers (NASD). Mrs. Gujral is also a director of Inland Investment Advisors, Inc., an investment advisor.

Mrs. Gujral has overall responsibility for the operations of IREIC, including the distribution of checks to over 70,000 investors, review of periodic communications to those investors, the filing of quarterly and annual reports for Inland's publicly registered investment programs with the Securities and Exchange Commission, compliance with other SEC and NASD securities regulations both for IREIC and ISC, review of asset management activities, and marketing and communications with the independent broker/dealer firms selling Inland's current and prior programs.  Mrs. Gujral works with internal and outside legal counsel in structuring and registering the prospectuses for IREIC's investment programs and in connection with the preparation of its offering documents and registering the related securities with the Securities and Exchange Commission and state securities commissions.

Mrs. Gujral has been with the Inland organization for over 20 years, becoming an officer in 1982. Prior to joining Inland, she worked for the Land Use Planning Commission establishing an office in Portland, Oregon, to implement land use legislation for that state.

She is a graduate of California State University.  She holds Series 7, 22, 39 and 63 licenses from the NASD.  Mrs. Gujral is a member of the National Association of Real Estate Investment Trusts (NAREIT), the Financial Planning Association (FPA), the Foundation for Financial Planning (FFP) and the National Association for Female Executives.

CATHERINE L. LYNCH (age 45) 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 LLP 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.

ROBERTA S. MATLIN (age 59) joined Inland in 1984 as Director of Investor Administration and currently serves as Senior Vice President of Inland Real Estate Investment Corporation ("IREIC") directing the day-today internal operations.  Ms. Matlin is a Director of IREIC and of Inland Securities Corporation.  Since 2003, she has been Vice President of Administration of Inland Western Retail Real Estate Trust, Inc. and since 1998, she has been Vice President of Administration of Inland Retail Real Estate Trust, Inc. and was Vice President of Administration of Inland Real Corporation from 1995 until 2000.    She is President and Director of Inland Investment Advisors, Inc. and Intervest Southern Real Estate Corporation, and a Trustee and Executive Vice President of Inland Mutual Fund Trust.

Prior to joining Inland, Ms. Matlin worked for the Chicago Region of the Social Security Administration of the Untied States Department of Health and Human Services.  Ms. Matlin is a graduate of the University of Illinois. She holds Series 7,22,24,39,63, and 65 licenses from the National Association of Securities Dealers.

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PATRICIA A. DELROSSO (age 51) is President and Director of Inland Real Estate Exchange Corporation.  Ms. DelRosso is also President and Managing Broker of Inland Partnership Property Sales Corporation, and serves as a Senior Vice President of Inland Real Estate Investment Corporation.  Ms. DelRosso has been with The Inland Real Estate Group of Companies for 18 years.

Ms. DelRosso developed the asset management function for Inland Real Estate Investment Corporation and has supervised it since its inception.  In this capacity, she has been responsible for developing and overseeing the business plans for Inland's portfolio of investor-owned assets valued at over $1.5 billion, including multi-family, retail, office and industrial, triple-net lease, land and mortgage funds.  Ms. DelRosso has spearheaded several types of real estate transactions including: sales, refinancings, redevelopments, tax increment financings, condominium conversions, and more than 150 tax deferred exchanges under Section 1031 of the U.S. Tax Code.

Ms. DelRosso received her Bachelor's degree from George Washington University and her Master's from Virginia Tech University. Ms. DelRosso is a licensed real estate broker, NASD registered securities sales representative, a member of the Urban Land Institute and a member of the Northern Illinois Commercial Association of Realtors.

KELLY TUCEK (age 41) joined Inland in 1989 and is a Vice President of Inland Real Estate Investment Corporation and Treasurer of Inland Western Retail Real Estate Trust, Inc. 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.

During 2004, we plan to formalize our audit committee, its policies and  process and will adopt a Code of Ethics.

Section 16(A) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires directors, executive officers and beneficial owners of more than ten percent of our partnership units to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange Commission and to provide us with copies of such reports. Based solely on a review of the copies provided to us and written representations from such reporting persons, we believe that all applicable Section 16(a) filing requirements have been met for such reporting persons.

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Item 11. Executive Compensation

Our 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.

Our 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, our profits and losses from operations are allocated as follows:

1. Depreciation shall be allocated 99% to the taxable limited partners and 1% to the general partner.
2. 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.
3. 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.

We allocate income to partners such that no partner group will receive an allocation of income which is greater than our net income for the related period.

Our general partner is required to make supplemental capital contributions, if necessary, from time to time in amounts sufficient to allow us to make distributions to the limited partners to provide a noncompounded return on their invested capital equal to 8% per annum.  There were no such contributions by the general partner to fund the cumulative preferred return of 8% per annum for the three-year period ended December 31, 2003.  The cumulative amount of such supplemental capital contributions at December 31, 2003 is $2,095,863.

The partnership is permitted to engage in various transactions involving affiliates of our general partner.

Our general partner and its affiliates may be reimbursed for salaries and direct expenses of employees of the general partner and its affiliates relating to our administration. In 2003, these expenses amounted to $40,635, of which $11,702 was unpaid at December 31, 2003.

Affiliates of the general partner earned  $15,656 in management fees for the year ended December 31, 2003 in connection with managing certain of our properties. All of these fees were paid prior to December 31, 2003.

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Item 12. Security Ownership of Certain Beneficial Owners and Management

1. The following table sets forth information as of December 31, 2003, regarding any person known to be beneficial owner of more than 5% of our outstanding units.



|                                  | Amount and Nature    |         
|--------------------------------- | -------------------- | --------
|                                  | of Beneficial        | Percent 
|Name of Beneficial Owner          | Ownership            | of Class
|                                  |                      |         
|Partnership Ownership Corporation | 4,218 Units directly | 7.12%   



|                          | Amount and Nature |                      
|------------------------- | ----------------- | ---------------------
|                          | of Beneficial     | Percent              
|Title of Class            | Ownership         | of Class             
|                          |                   |                      
|Limited partnership units | 205.44 Units      | Less than 1% directly

No officer or director of our general partner possesses a right to acquire beneficial ownership of units of our partnership.

All of the outstanding shares of our general partner are owned by an affiliate or its officers and directors as set forth above in Item 10.

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).





|                                                                                                                                                  | Years ended December 31,
|------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------
|                                                                                                                                                  | 2003                    
|                                                                                                                                                  |                         
|Audit fees for professional services rendered for the audit of our annual financial statements and quarterly reviews of our financial statements. | $         24,800        
|Tax fees for professional services rendered for tax return preparation and review of our K-1's.                                                   | 7,700                   
|                                                                                                                                                  |                         
|Total fees                                                                                                                                        | $         32,500        

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PART IV

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

1. The Financial Statements listed in the index at page 16 of this annual report are filed as part of this annual report.
2. Exhibits. The following exhibits are incorporated herein by reference:
3. Financial Statement Schedules.



|                                                        | Page
|------------------------------------------------------- | ----
|Real Estate and Accumulated Depreciation (Schedule III) | 33  

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.

None.

No annual report or proxy material for the year 2003 has been sent to our limited partners. An annual report will be sent to the limited partners subsequent to this filing and we will furnish copies of such report to the commission when it is sent to the limited partners.



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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                          
|      |                                          
|/s/   | Brenda G. Gujral                         
|      |                                          
|By:   | Brenda G. Gujral                         
|      | President and Director                   
|Date: | March 26, 2004                           

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                          
|      |                                          
|/s/   | Brenda G. Gujral                         
|      |                                          
|By:   | Brenda G. Gujral                         
|      | President and Director                   
|Date: | March 26, 2004                           
|      |                                          
|/s/   | Patricia A. DelRosso                     
|      |                                          
|By:   | Patricia A. DelRosso                     
|      | Senior Vice President                    
|Date: | March 26, 2004                           
|      |                                          
|/s/   | Kelly Tucek                              
|      |                                          
|By:   | Kelly Tucek                              
|      | Vice President                           
|Date: | March 26, 2004                           
|      |                                          
|/s/   | Robert D. Parks                          
|      |                                          
|By:   | Robert D. Parks                          
|      | Chairman                                 
|Date: | March 26, 2004                           
|      |                                          
|/s/   | Daniel L. Goodwin                        
|      |                                          
|By:   | Daniel L. Goodwin                        
|      | Director                                 
|Date: | March 26, 2004                           
|      |                                          

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