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, 1997

                                      or

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

                           Commission file #0-16790

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

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

2901 Butterfield Road, Oak Brook, Illinois        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.


                                      -1-


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


                               TABLE OF CONTENTS



                                    Part I
                                    ------

                                                                          Page
                                                                          ----
  Item 1.   Business......................................................  3

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

  Item 3.   Legal Proceedings.............................................  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 8.   Financial Statements and Supplementary Data................... 13

  Item 9.   Changes in and Disagreements with Independent Auditors on
            Accounting and Financial Disclosure........................... 33


                                   Part III
                                   --------
  Item 10.  Directors and Executive Officers of the Registrant............ 33

  Item 11.  Executive Compensation........................................ 38

  Item 12.  Security Ownership of Certain Beneficial
            Owners and Management......................................... 39

  Item 13.  Certain Relationships and Related Transactions................ 39


                                    Part IV
                                    -------
  Item 14.  Exhibits, Financial Statement Schedules, and
            Reports on Form 8-K........................................... 40

  SIGNATURES.............................................................. 41


                                      -2-


                                    PART I

Item 1. Business

The Registrant, Inland's  Monthly  Income  Fund,  L.P. (the "Partnership"), was
formed on March  26,  1987  pursuant  to  the  Delaware Revised Uniform Limited
Partnership Act, to  invest  in  improved  residential,  retail, industrial and
other  income  producing  properties.    On  August  3,  1987,  the Partnership
commenced an Offering of 50,000 (subject  to  an increase up to 60,000) Limited
Partnership Units ("Units") pursuant to  a  Registration Statement on Form S-11
under the Securities Act of  1933.  The  Offering terminated on August 3, 1988,
with total sales of 59,999 Units at  $500 per Unit, resulting in gross offering
proceeds of $29,999,500, 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
Partnership acquired seven properties utilizing $25,831,542 of capital proceeds
collected. 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 Partnership is  engaged  in  the  business  of  real  estate investment.  A
presentation of information about industry segments would not be material to an
understanding of the Partnership's business taken as a whole.

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

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

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

Hillside Nursing Home (c)              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)           (sold during
Schaumburg, Illinois                                      1994 & 1995)

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

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


                                      -3-


(a) Reference in made to Note 4 of the Notes to Financial Statements (Item 8 of
    this Annual Report) for  additional  descriptions of the Partnership's real
    property investments.

(b) Reference is made to Notes  4  and  8  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.

(c) 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 Partnership's
    investment property.

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

The Partnership currently has significant  net operating leases with Elite Care
Corporation ("Elite") for the  Douglas  Nursing  Home  and the Hillside Nursing
Home, Scandinavian Health Spa, Inc.  for  the Scandinavian Health Club and Wal-
Mart Stores, Inc. for the  Rantoul  and  Duncan Wal-Marts.  Revenues from these
leases  represent  approximately  29%,  13%   and  18%,  respectively,  of  the
Partnership's income for the year ended December 31, 1997.

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

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

The Partnership had no employees during 1997.

The terms of transactions between the Partnership and Affiliates of the General
Partner of the Partnership are set  forth  in  Item  11 below and Note 3 of the
Notes to Financial Statements (Item 8 of this Annual Report) to which reference
is hereby made for a description of such terms and transactions.

The  Partnership  has  reviewed  its  current  computer  systems  and  does not
anticipate any future costs or problems relating to the year 2000.








                                      -4-


Item 2. Properties

The Partnership owns directly the properties referred to under Item 1 above and
in Note 4 of the Notes to  Financial  Statements (Item 8 of this Annual Report)
to which reference is hereby made for a description of said properties.

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

                               1997      1996      1995      1994      1993
                               ----      ----      ----      ----      ----
  McHenry Plaza                 68%       69%       86%       84%       88%
  McHenry, Illinois

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

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

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

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

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

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

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

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

                               1997      1996      1995      1994      1993
                               ----      ----      ----      ----      ----
  McHenry Plaza              $  5.40      5.22      6.21      7.06      6.77
  McHenry, Illinois

  Douglas Nursing Home          6.46      6.46      6.46      6.46      6.46
  Mattoon, Illinois

  Hillside Nursing Home        17.59     17.59     17.59     17.59     17.59
  Yorkville, Illinois

  Scandinavian Health          13.79     13.79     13.79     12.54     12.54
  Westlake, Ohio

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

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


                                      -5-


<TABLE>


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

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

Douglas Living Center
    Elite                               65,661       1/2001           1/10 years         437,255           6.66

Hillside Living Center
    Elite                               21,565       1/2001           1/10 years         391,154          18.14

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

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

McHenry Plaza
    Walgreens                           14,682      11/2010             None             136,353           9.29
    Spot Amusements, Inc.                8,269       5/1999             None              46,108           5.58
    Northern Federal Bank                3,420       3/2001           1/5 years           47,520          13.89
    Northern Federal Bank                  425       3/2001           1/5 years           27,500          64.71
    Don Robert Beauty School             3,000       9/1998             None              33,000          11.00
    Premium Tobacco Store                1,750      11/1999             None              17,500          10.00
    Merit Medical                        4,344      Monthly             None              15,204           3.50
    U.S. Alarm                           1,200       4/2000             None              12,000          10.00
    Tacos El Norte                       1,252       4/2000             None              12,520          10.00
    Vacant                              18,301


















                                      -6-


                                                     Approx.        Annual             Annual Base    % of Total    % of Annual
                                       Number    Gross Leasable      Base      Total    Rent Per         GLA         Base Rent
                              Year       of      Area ("GLA") of   Rent of    Annual   Sq. Ft Under   Represented   Represented
                             Ending    Leases    Expiring Leases   Expiring    Base     Expiring      By Expiring   By Expiring
        Property             Dec 31,  Expiring    (square feet)     Leases    Rent(1)    Leases         Leases        Leases
        --------             ------- ---------- ----------------- ---------- -------- -------------- ------------- -------------
<S>                          <C>     <C>         <C>               <C>        <C>      <C>             <C>           <C>
Scandinavian Health Spa
                              1998-      -              -         $   -      $359,094 $      -             -            -
                              2003
                              2004       1            26,040       359,094    359,094      13.79          100%         100%

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

Hillside Living Center        1998       -              -             -       399,052        -             -            -
                              1999       -              -             -       407,668        -             -            -
                              2000       -              -             -       416,284        -             -            -
                              2001       1            21,565       417,002    417,002      19.34          100%         100%

Duncan Walmart                1998-
                              2007       -              -             -       266,440        -             -            -

Rantoul Walmart               1998-
                              2007       -              -             -       232,999        -             -            -

McHenry Plaza                 1998       2            10,552        78,312    395,203       7.42         18.57%       19.82%
                              1999       2            10,019        63,608    318,548       6.37         17.69%       20.03%
                              2000       2             2,452        28,772    255,349      11.73          4.23%       11.27%
                              2001       2             3,845        75,020    226,577      19.51          6.78%       33.11%
                              2002-
                               2007      -              -             -       151,557        -             -            -


(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.

</TABLE>












        

                                      -7-


Item 3. Legal Proceedings

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


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

There were no matters submitted to a vote of security holders during 1997.



                                    PART II


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

As of December 31, 1997, there were  2,190 holders of Units of the Partnership.
There is no public  market  for  Units  nor  is  it anticipated that any public
market for Units will  develop.    Reference  is  made  to  Item  6 below for a
discussion of cash distributions made to the Limited Partners.

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


































                                      -8-


Item 6. Selected Financial Data

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

       For the years ended December 31, 1997, 1996, 1995, 1994 and 1993

                 (not covered by Independent Auditors' Report)


                           1997        1996       1995       1994       1993
                           ----        ----       ----       ----       ----
Total assets........... $23,610,290 24,276,313 24,905,111 24,872,124 24,525,179
                        =========== ========== ========== ========== ==========

Long-term debt, less
  current portion...... $ 1,489,207  1,529,779  1,566,596  1,600,006  1,630,324
                        =========== ========== ========== ========== ==========

Total income........... $ 2,818,725  2,766,451  2,973,283  3,397,170  3,552,879
                        =========== ========== ========== ========== ==========

Net income............. $ 2,038,928  1,869,732  1,923,281  1,303,469  1,239,610
                        =========== ========== ========== ========== ==========
Net income per the
  one General Partner
  Unit................. $      -          -          -          -          -
                        =========== ========== ========== ========== ==========
Net income allocated per
  Limited Partnership
  Unit (b)............. $     34.39      31.54      32.44      21.99      20.91
                        =========== ========== ========== ========== ==========
Distributions to
  Limited Partners (c). $ 2,416,710  2,347,018  2,672,357  2,371,433  2,371,433
                        =========== ========== ========== ========== ==========

Distributions to Limited
  Partners per Unit (b) $     40.76      39.59      45.08      40.00      40.00
                        =========== ========== ========== ========== ==========


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

(b) The net income per Unit, basic  and diluted, and distribution per Unit data
    is  based  upon  the  weighted  average  number  of  Units  outstanding  of
    59,285.65.

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







                                      -9-


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  the  Partnership's  actual  results, performance, or
achievements to be materially  different  from any future results, performance,
or achievements  expressed  or  implied  by  these  forward-looking statements.
These factors include, among  other  things,  competition for tenants; federal,
state, or local  regulations;  adverse  changes  in  general  economic or local
conditions; uninsured losses; and  potential  conflicts of interest between the
Partnership and its Affiliates, including the General Partner.

Liquidity and Capital Resources

On August 3, 1987, the  Partnership  commenced an Offering of 50,000 (increased
to 60,000) Limited Partnership  Units  pursuant  to a Registration Statement on
Form S-11 under the Securities Act of  1933.  The Offering terminated on August
3, 1988, with 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 have been admitted to
the  Partnership.    The   Partnership   acquired  seven  properties  utilizing
$25,831,542  of  capital  proceeds   collected.   During  1994  and  1995,  the
Partnership sold the thirty-eight six-unit condominium buildings comprising the
Schaumburg Terrace condominium complex.  Also,  the Partnership sold one of the
three lots adjacent to the Hillside  Living Center during September 1997. As of
December  31,  1997,  cumulative  distributions  to  Limited  Partners  totaled
$23,641,195, including $2,095,863  of  Supplemental  Capital Contributions from
the  General  Partner,  which  represents  distributable  cash  flow  from  the
properties. 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.

As of December 31,  1997,  the  Partnership  had  cash  and cash equivalents of
$1,090,891, which includes approximately $94,000 for the payment of real estate
taxes for Douglas  and  Hillside  Living  Centers.    During December 1997, the
Partnership received prepayments on  three  of  the thirty-seven mortgage loans
receivable on  the  six-unit  condominium  buildings  comprising the Schaumburg
Terrace condominium complex. Repayment proceeds from these prepayments totaling
$709,800 is also included  in  cash  and  cash  equivalents  for the year ended
December 31, 1997. The Partnership intends  to use such funds for distributions
and for working capital requirements.

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




                                     -10-


Results of Operations

As of December 31, 1997, the  Partnership  owns six operating properties.  Five
of these properties were leased  on  a  "triple-net" basis which means that all
expenses of the property are  passed  through  to  the tenant.  The Partnership
also owns a shopping center, McHenry  Plaza.  The leases of the shopping center
provide that the Partnership  be  responsible  for maintenance of the structure
and the parking lot and the  tenants  are required to reimburse the Partnership
for portions of  insurance,  real  estate  taxes  and  common area maintenance.
During  1994  and  1995,   the   Partnership  sold  the  thirty-eight  six-unit
condominium buildings comprising  the  Schaumburg  Terrace condominium complex.
Also, the Partnership sold  one  of  the  three  lots  adjacent to the Hillside
Living Center during September 1997.

The gain on  the  sale  of  investment  property  recorded  for the years ended
December 31, 1997, 1996  and  1995  is  the  result  of  deferred gain from the
Schaumburg Terrace condominium sales  being  recognized  as cash is received on
the related financing extended by the Partnership to the individual purchasers.
Additionally, for the year ended December 31, 1997, the Partnership sold one of
three lots (.344 acres) adjacent to  the  Hillside Living Center resulting in a
gain of $14,805.  Reference  is  made  to  Note  3  of  the  Notes to Financial
Statements (Item 8 of this  Annual  Report)  for  a  description of the sale of
Partnership's investment property.

Overall, rental  income  for  the  Partnership  decreased  for  the years ended
December 31, 1997 and 1996, as  compared  to  the year ended December 31, 1995,
primarily due to the sales  program  at  Schaumburg Terrace.  However, interest
income earned by the Partnership on the Schaumburg Terrace mortgage receivables
is greater than net rental income, after property expenses.

Interest income increased for the  years  ended  December 31, 1997 and 1996, as
compared to the year ended December  31,  1995,  due to an increase in interest
rates on short-term investments and  an  increase  in cash available to be used
for short-term investments.

Professional services to Affiliates decreased  for the years ended December 31,
1997 and 1996, as  compared  to  the  year  ended  December  31, 1995, due to a
decrease in legal and accounting services paid to Affiliates.

General and administrative expenses to  Affiliates decreased for the year ended
December 31, 1997, as compared to  the  year  ended December 31, 1996, due to a
decrease in investor services and data processing expenses, partially offset by
an increase in mortgage servicing expenses. General and administrative expenses
to Affiliates decreased for the  year  ended  December 31, 1996, as compared to
the year ended December  31,  1995,  due  to  a  decrease in investor services,
supplies  and  postage  expenses,  partially  offset  by  an  increase  in data
processing and mortgage servicing expenses. General and administrative expenses
to non-affiliates increased for the  year  ended December 31, 1997, as compared
to the year ended December 31, 1996,  due to increases in supplies and printing
expenses. General and administrative  expenses  to non-affiliates increased for
the year ended December 31, 1996,  as  compared  to the year ended December 31,
1995, due to an increase in the Illinois Replacement Tax.






                                     -11-


Property operating expenses  to  non-affiliates  increased  for  the year ended
December 31, 1997, as compared to the  year ended December 31, 1996, due to the
increase in various expense items,  such  as utilities, supplies, insurance and
repair and maintenance, relating  to  vacant  and  retenanted spaces at McHenry
Plaza Shopping Center.  Also, in  1996,  real estate tax reductions relating to
prior years for  the  Schaumburg  Terrace  Apartment  complex were received and
recorded as a reduction  in  property  operating expenses to non-affiliates for
the year ended  December  31,  1996,  producing  an  abnormal and non-recurring
variance  between  1996  and  1997.  The  sale  of  the  condominium  buildings
comprising the Schaumburg Terrace condominium  complex resulted in decreases in
depreciation and property operating  expenses  to Affiliates and non-affiliates
for the years ended December 31, 1997  and  1996, as compared to the year ended
December 31, 1995.

Inflation

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

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





























                                     -12-


Item 8. Financial Statements and Supplementary Data




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



                                     Index
                                                                        Page
                                                                        ----
Independent Auditors' Report...........................................  14

Financial Statements:

  Balance Sheets, December 31, 1997 and 1996...........................  15

  Statements of Operations, for the years ended
    December 31, 1997, 1996 and 1995...................................  17

  Statements of Partners' Capital, for the years ended
    December 31, 1997, 1996 and 1995...................................  19

  Statements of Cash Flows, for the years ended
    December 31, 1997, 1996 and 1995...................................  20

  Notes to Financial Statements........................................  22

Real Estate and Accumulated Depreciation (Schedule III)................  31

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.





















                                     -13-







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, 1997 and 1996, and the
related statements of operations, partners' capital, and cash flows for each of
the three years  in  the  period  ended  December  31,  1997.   Our audits also
included  the  financial  statement  schedule  listed  in  item  14(c).   These
financial statements and financial statement schedule are the responsibility of
the Partnership's management.  Our  responsibility  is to express an opinion on
these financial  statements  and  financial  statement  schedule  based  on our
audits.  

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

In our opinion,  such  financial  statements  present  fairly,  in all material
respects, the financial position of  Inland's  Monthly  Income Fund, L.P. as of
December 31, 1997 and 1996,  and  the  results  of  its operations and its cash
flows for each of the three  years  in  the  period ended December 31, 1997, in
conformity  with  generally  accepted  accounting  principles.    Also,  in our
opinion, the financial statement schedule referred to above, when considered in
relation to the basic financial statements taken as a whole, presents fairly in
all material respects the information set forth therein.



DELOITTE & TOUCHE LLP


Chicago, Illinois
February 4, 1998











                                     -14-


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

                                Balance Sheets

                          December 31, 1997 and 1996


                                    Assets
                                    ------

                                                       1997          1996
Current assets:                                        ----          ----
  Cash and cash equivalents (Note 1).............. $ 1,090,891       357,749
  Accounts and rents receivable...................      37,386        69,819
  Mortgage interest receivable....................      60,734        70,259
  Current portion of mortgage loans receivable....      77,301        77,430
  Current portion of deferred rent receivable.....       9,301        12,503
  Other assets....................................       3,092         4,013
                                                   ------------  ------------
Total current assets..............................   1,278,705       591,773
                                                   ------------  ------------
Investment properties (including acquisition
    fees paid to Affiliates of $1,736,163 and
    $1,738,621 at December 31, 1997 and 1996,
    respectively) (Notes 1, 4 and 5):
  Land............................................   2,672,620     2,697,394
  Buildings and improvements......................  15,592,680    15,592,680
  Tenant improvements.............................     775,947       749,447
                                                   ------------  ------------
                                                    19,041,247    19,039,521
  Less accumulated depreciation...................   5,019,205     4,496,365
                                                   ------------  ------------
Net investment properties.........................  14,022,042    14,543,156
                                                   ------------  ------------
Other assets:
  Mortgage loans receivable, less current portion.   7,709,989     8,494,670
  Deferred loan fees (net of accumulated
    amortization of $27,390 and $22,761 at
    December 31, 1997 and 1996, respectively)
    (Note 1)......................................      18,898        23,527 
  Deferred leasing fees (including $219,451
    paid to Affiliates) (net of accumulated
    amortization of $190,257 and $169,227 at
    December 31, 1997 and 1996, respectively)
    (Notes 1 and 6)...............................     154,130       175,160 
  Deferred rent receivable, less current portion
    (Notes 1 and 6)...............................     426,526       448,027
                                                   ------------  ------------
Total other assets................................   8,309,543     9,141,384
                                                   ------------  ------------
Total assets...................................... $23,610,290    24,276,313
                                                   ============  ============



                See accompanying notes to financial statements.


                                     -15-


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

                                Balance Sheets
                                  (continued)

                          December 31, 1997 and 1996


                       Liabilities and Partners' Capital
                       ---------------------------------
                                                       1997          1996
Current liabilities:                                   ----          ----
  Accounts payable and accrued expenses........... $    16,971        22,211
  Accrued real estate taxes.......................      60,358        59,114
  Distributions payable (Note 9)..................     198,824       198,790
  Due to Affiliates (Note 3)......................       2,011         2,752
  Deposits held for others........................     102,885        99,250
  Current portion of long-term debt (Note 8)......      40,572        36,817
  Current portion of deferred gain on sale of
    investment property...........................      20,732        20,799
                                                   ------------  ------------
Total current liabilities.........................     442,353       439,733

Deferred loan fees (Note 1).......................      55,653        69,264
Long-term debt, less current portion (Note 8).....   1,489,207     1,529,779
Deferred gain on sale of investment property,
  less current portion (Note 5)...................   2,269,408     2,506,086
                                                   ------------  ------------
Total liabilities.................................   4,256,621     4,544,862
                                                   ------------  ------------
Partners' capital (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.........................  14,581,662    12,542,734
    Cumulative distributions...................... (23,641,195)  (21,224,485)
                                                   ------------  ------------
                                                    19,389,912    19,767,694
                                                   ------------  ------------
Total Partners' capital...........................  19,353,669    19,731,451
                                                   ------------  ------------
Total liabilities and Partners' capital........... $23,610,290    24,276,313
                                                   ============  ============

                See accompanying notes to financial statements.


                                     -16-


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

                           Statements of Operations

             For the years ended December 31, 1997, 1996 and 1995



                                         1997          1996          1995
                                         ----          ----          ----
Income:
  Rental income (Notes 1 and 6)..... $ 1,972,875     1,962,343     2,178,893
  Additional rental income..........      43,961        37,983        62,589
  Interest income...................     780,436       766,125       694,548
  Other income......................      21,453          -           37,253
                                     ------------  ------------  ------------
                                       2,818,725     2,766,451     2,973,283
Expenses:                            ------------  ------------  ------------
  Professional services to
    Affiliates......................      13,889        13,295        22,818
  Professional services to
    non-affiliates..................      28,515        30,468        28,701
  General and administrative
    expenses to Affiliates..........      29,432        34,248        40,106
  General and administrative
    expenses to non-affiliates......      30,567        21,753        18,769
  Property operating expenses to
    Affiliates......................      33,038        28,820        39,816
  Property operating expenses
    to non-affiliates...............     187,053        90,659       337,677
  Interest expense to non-affiliates     150,828       154,262       157,379
  Depreciation......................     522,840       518,355       551,293
  Amortization......................      25,659        25,658        26,147
                                     ------------  ------------  ------------
                                       1,021,821       917,518     1,222,706
                                     ------------  ------------  ------------
Operating income....................   1,796,904     1,848,933     1,750,577
Gain on sale of investment
  property (Note 5).................     242,024        20,799       172,704
                                     ------------  ------------  ------------
Net income.......................... $ 2,038,928     1,869,732     1,923,281
                                     ============  ============  ============













                See accompanying notes to financial statements.


                                     -17-


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

                           Statements of Operations
                                  (continued)

             For the years ended December 31, 1997, 1996 and 1995


                                         1997          1996          1995
                                         ----          ----          ----
Net income allocated to (Note 2):
  General Partner................... $      -             -             -  
  Limited Partners..................   2,038,928     1,869,732     1,923,281
                                     ------------  ------------  ------------
Net income.......................... $ 2,038,928     1,869,732     1,923,281
                                     ============  ============  ============

Net income per Unit, basic and
  diluted, allocated to Limited
  Partners per weighted average
  Limited Partnership Units of
  59,285.65......................... $     34.39         31.54         32.44
                                     ============  ============  ============
































                See accompanying notes to financial statements.


                                     -18-


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

                        Statements of Partners' Capital

             For the years ended December 31, 1997, 1996 and 1995


                                        General       Limited
                                        Partner       Partners      Total
                                        -------       --------      -----
Balance (deficit) January 1, 1995... $   (36,243)   20,994,056    20,957,813

Net income (Note 2).................        -        1,923,281     1,923,281
Distributions to Limited Partners
  ($45.08 per weighted average of
  Limited Partnership Units
  of 59,285.65).....................        -       (2,672,357)   (2,672,357)
                                     ------------  ------------  ------------
Balance (deficit) December 31, 1995.     (36,243)   20,244,980    20,208,737

Net income (Note 2).................        -        1,869,732     1,869,732
Distributions to Limited Partners
  ($39.59 per weighted average of
  Limited Partnership Units
  of 59,285.65).....................        -       (2,347,018)   (2,347,018)
                                     ------------  ------------  ------------
Balance (deficit) December 31, 1996.     (36,243)   19,767,694    19,731,451

Net income (Note 2).................        -        2,038,928     2,038,928
Distributions to Limited Partners
  ($40.76 per weighted average of
  Limited Partnership Units
  of 59,285.65).....................        -       (2,416,710)   (2,416,710)
                                     ------------  ------------  ------------
Balance (deficit) December 31, 1997. $   (36,243)   19,389,912    19,353,669
                                     ============  ============  ============



















                See accompanying notes to financial statements.


                                     -19-


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

                           Statements of Cash Flows

             For the years ended December 31, 1997, 1996 and 1995



                                         1997          1996          1995
Cash flows from operating activities:    ----          ----          ----
  Net income........................ $ 2,038,928     1,869,732     1,923,281
  Adjustments to reconcile net income
    to net cash provided by operating
      activities:
    Gain on sale of investment
      property......................    (242,024)      (20,799)     (172,704)
    Depreciation....................     522,840       518,355       551,293
    Amortization....................      25,659        25,658        26,147
    Changes in assets and liabilities:
      Accounts and rents receivable.      32,433       (16,814)      (12,769)
      Mortgage interest receivable..       9,525        (8,144)      (30,248)
      Other current assets..........         921          (463)         (872)
      Deferred rent receivable......      24,703          (538)      (28,162)
      Accounts payable and accrued
        expenses....................      (5,240)       (4,824)      (51,986)
      Accrued real estate taxes.....       1,244       (58,689)     (294,117)
      Due to Affiliates.............        (741)       (6,466)        7,652
      Other current liabilities.....        -             -           (5,118)
      Deferred loan fees............     (13,611)       (8,658)       25,311
Net cash provided by operating       ------------  ------------  ------------
  activities........................   2,394,637     2,288,350     1,937,708
                                     ------------  ------------  ------------
Cash flows from investing activities:
  Proceeds from sale of investment
    property........................      39,579          -          409,383
  Costs incurred relating to mortgage
    loans receivable................      (9,526)         -             -
  Principal payments received on
    mortgage loans receivable.......     784,810        69,671        53,149
  Capital expenditures..............     (26,500)      (41,945)      (14,509)
Net cash provided by investing       ------------  ------------  ------------
  activities........................     788,363        27,726       448,023
                                     ------------  ------------  ------------
Cash flows from financing activities:
  Cash distributions................  (2,416,676)   (2,347,565)   (2,674,430) 
  Deposits held for others..........       3,635       (18,119)      (23,504)
  Principal payments of long-term
    debt............................     (36,817)      (33,410)      (30,318)
Net cash used in financing           ------------  ------------  ------------
  activities........................  (2,449,858)   (2,399,094)   (2,728,252)
                                     ------------  ------------  ------------




                See accompanying notes to financial statements.


                                     -20-


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

                           Statements of Cash Flows
                                  (continued)

             For the years ended December 31, 1997, 1996 and 1995



                                         1997          1996          1995
Net increase (decrease) in cash          ----          ----          ----
  and cash equivalents.............. $   733,142       (83,018)     (342,521)
Cash and cash equivalents at
  beginning of year.................     357,749       440,767       783,288
Cash and cash equivalents at         ------------  ------------  ------------
  end of year....................... $ 1,090,891       357,749       440,767
                                     ============  ============  ============



Cash paid for interest.............. $   151,127       154,534       157,951
                                     ============  ============  ============


Supplemental disclosure of non-cash investing activities:

Sale of investment property:
  Mortgage loans receivable......... $      -             -       (3,789,704)
  Reduction of investment in
    property........................      24,774          -        3,683,157
  Reduction of accumulated
    depreciation related to
    investment property sold........        -             -         (812,990)
  Gain on sale......................      14,805          -          172,704
  Deferred gain on sale.............        -             -        1,156,216
    Proceeds from sale of investment ------------  ------------  ------------
      property...................... $    39,579          -          409,383
                                     ============  ============  ============

















                See accompanying notes to financial statements


                                     -21-


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

                         Notes to Financial Statements

             For the years ended December 31, 1997, 1996 and 1995


(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 generally accepted
accounting principals requires  management  to  make  estimates and assumptions
that affect the reported amounts  of  assets and liabilities and disclosures of
contingent assets and liabilities at  the  date of the financial statements and
the reported amounts  of  revenues  and  expenses  during the reporting period.
Actual results could differ from these estimates.

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

Statement  of  Financial  Accounting  Standards  No.  121  "Accounting  for the
Impairment of Long-Lived Assets and  for  Long-Lived  Assets to be Disposed of"
("SFAS 121") 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 property's
estimated fair value.  As of  December  31,  1997 and 1996, the Partnership has
not recognized any such impairment.

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,  while furniture and fixtures are
based upon estimated useful lives  of  5  to  12 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 of the related lease term.

The Partnership  considers  all  highly  liquid  investments  purchased  with a
maturity of three months or less to be cash equivalents and are carried at cost
which approximates market. For  the  years  ended  December  31, 1997 and 1996,
included in cash and  cash  equivalents  is  approximately $94,000 and $92,400,
respectively, for the payment  of  real  estate  taxes for Douglas and Hillside
Living Centers.


                                     -22-


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

                         Notes to Financial Statements
                                  (continued)


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.

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.

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

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

Statement of Financial Accounting  Standards  No.  128 "Earnings per Share" was
adopted by the Partnership for the  year  ended  December 31, 1997 and has been
applied to all prior  earnings  periods  presented in the financial statements.
The Partnership has no dilutive securities.

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

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

                                        1997                     1996
                             ------------------------- ------------------------
                                             Tax                      Tax
                                GAAP         Basis        GAAP        Basis
                                Basis     (unaudited)     Basis     (unaudited)
                             ------------ ------------ ----------- ------------
Total assets................ $23,610,290   26,899,532   24,276,313  27,565,556

Partners' capital (deficit):
  General Partner...........     (36,243)     (27,832)     (36,243)    (25,022)
  Limited Partners..........  19,389,912   22,670,742   19,767,694   23,045,715

Net income (loss):
  General Partner...........        -          (2,811)        -         (4,977)
  Limited Partners..........   2,038,928    2,041,739    1,869,732   1,911,441

Net income per Limited
  Partnership Unit..........       34.39        34.44        31.54       32.24

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


                                     -23-


                      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:

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

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

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

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

The General Partner is required  to make Supplemental Capital Contributions, if
necessary, from time to time in  amounts sufficient to allow the Partnership to
make distributions to the Limited Partners to provide a noncompounded return on
their invested capital  equal  to  8%  per  annum.    Such contributions by the
General Partner to fund the cumulative  preferred  return of 8% per annum,  for
the three year period ended December 31, 1997, are as shown in the accompanying
statements of partners' capital.    The  cumulative amount of such Supplemental
Capital Contributions at December 31, 1997 is $2,095,863.












                                     -24-


                      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 $2,011 and $2,752
remained unpaid at December 31, 1997 and 1996, 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 $33,038,  $28,820  and  $39,816 for the years ended
December 31, 1997, 1996 and 1995, respectively, all of which has been paid.

Through the Partnership's participation  in  an  insurance program, claims from
the Partnership's properties,  as  well  as  properties  owned by other limited
partnerships syndicated by  Affiliates,  were  managed  through  a loss reserve
trust.  In June 1995, this program was terminated.  For the year ended December
31, 1995, the Partnership paid $5,248 to the loss reserve trust for the McHenry
Plaza Shopping Center.


(4) Investment Properties

McHenry Plaza, McHenry, Illinois
--------------------------------
On October 19, 1987, the  Partnership  purchased  a 57,910 square foot shopping
center located in McHenry, Illinois  from  an Affiliate of the General Partner.
The cost of this property to  the Partnership was $1,967,200 which includes the
purchase price of $1,776,000 and acquisition  costs of $191,200.  Subsequent to
the purchase  of  this  property,  approximately  $1,595,000, including leasing
commissions, was expended  to  upgrade  the  property  following  the July 1989
termination of a lease with Duckwell-Alco Stores, Inc., the tenant which leased
94% of the space  in  the  center  at  the  time  the Partnership purchased the
property. This upgrade was financed by a  line of credit secured by the Rantoul
Wal-Mart. See Note 8 for further discussion of permanent financing obtained.

The major tenant at McHenry Plaza is  a Walgreens drug store. Other tenants are
Don Robert's Beauty  School,  Northern  Federal  Bank, Merit Medical Equipment,
Family Entertainment Center, a mexican restaurant and a cigarette store.  As of
December 31, 1997, approximately  18,301  square  feet, representing 32% of the
total space at the center, remains  to be leased. The General Partner continues
to pursue additional leases for this remaining space.










                                     -25-


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

                         Notes to Financial Statements
                                  (continued)


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 lease expires in December 2004 and  the tenant has the option to extend the
lease for two additional five-year periods.  The  tenant has leased 100% of the
rentable space on a triple-net basis for a current monthly amount of $29,925.

Douglas Living and Retirement Center, Mattoon, Illinois
-------------------------------------------------------
On January 13, 1988,  the  Partnership  took  title  to  this property which an
Affiliate of the General Partner purchased on behalf of the Partnership from an
unaffiliated third party for  $3,208,250.  The  property  consists  of a 75 bed
nursing care  facility  occupying  27,922  square  feet,  a  35-unit retirement
apartment  center  occupying  36,389  square  feet  and  a  1,350  square  foot
retirement duplex. The  total  cost  of  this  property  to the Partnership was
$3,574,465, which includes  the  purchase  price  of $3,208,250 and acquisition
costs  of  $366,215.  The  center  is  currently  100%  leased  to  Elite  Care
Corporation. The lease is  a  triple-net  lease  and  expires January 2001. The
tenant has the right to extend  the  lease for an additional ten-year term. The
current rent per annum is $437,255  and adjusts annually. In 1992, the operator
of this facility negotiated with a  new  operator to sublease the facility. The
General Partner approved the  transaction  with  no  significant changes to the
terms of the lease.

Hillside Living Center, Yorkville, Illinois
-------------------------------------------
On January 29, 1988,  the  Partnership  took  title  to  this property which an
Affiliate of the General Partner purchased on behalf of the Partnership from an
unaffiliated third party for $2,870,000.  The  property consists of a two-story
building with a total of 21,565 square feet. The total cost of this property to
the Partnership was $3,195,713, which includes the purchase price of $2,870,000
and acquisition costs of $325,713. The center is currently 100% leased to Elite
Care Corporation. The lease is a triple-net lease and expires January 2001. The
tenant has the right to extend  the  lease for an additional ten-year term. The
current rent per annum is $391,154  and adjusts annually. In 1992, the operator
of this facility negotiated with a  new  operator to sublease the facility. The
General Partner approved the  transaction  with  no  significant changes to the
terms of the lease. See Note 5  for  a  discussion  on the sale of a portion of
this property.









                                     -26-


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

                         Notes to Financial Statements
                                  (continued)


Duncan Wal-Mart, Duncan, Oklahoma
---------------------------------
On August 5,  1988,  the  Partnership  purchased  a  Wal-Mart  store in Duncan,
Oklahoma from  Wal-Mart  Properties,  Inc.  The  cost  to  the  Partnership was
$3,038,547, which  includes  acquisition  fees  of  $305,829.  The  property is
situated on approximately 11.5 acres  of  land  and  contains a total of 68,907
square feet.  The construction of the  store was completed in the fall of 1987.
The lease expires in January 2014 and  the  tenant has the option to extend the
lease for five additional five-year periods.  The tenant has leased 100% of the
rentable space on a triple-net basis for a current monthly amount of $21,862.

Rantoul Wal-Mart, Rantoul, Illinois
-----------------------------------
On August 5,  1988,  the  Partnership  purchased  a  Wal-Mart Store in Rantoul,
Illinois from Wal-Mart  Properties,  Inc.    The  cost  to  the Partnership was
$2,656,568, which  includes  acquisition  fees  of  $266,834.  The  property is
situated on approximately 11.2 acres  of  land  and  contains a total of 65,930
square feet. The construction of the store was completed in the spring of 1988.
The lease expires in January 2014 and  the  tenant has the option to extend the
lease for five additional five-year periods.  The tenant has leased 100% of the
rentable space on a triple-net basis for a current monthly amount of $19,118.

Cost and accumulated depreciation  of  the  above  properties are summarized as
follows:
                                                 1997             1996
         Shopping Center:
          Cost.............................. $ 3,531,798        3,505,298
          Less accumulated depreciation.....   1,216,811        1,083,874
                                             ------------     ------------
                                               2,314,987        2,421,424
                                             ------------     ------------
         Health and Tennis Club:
          Cost..............................   3,068,930        3,068,930
          Less accumulated depreciation.....     807,861          725,004
                                             ------------     ------------
                                               2,261,069        2,343,926
                                             ------------     ------------
         Nursing Homes:
          Cost..............................   6,745,404        6,770,178
          Less accumulated depreciation.....   1,769,068        1,592,161
                                             ------------     ------------
                                               4,976,336        5,178,017
                                             ------------     ------------
         Department Stores:
          Cost..............................   5,695,115        5,695,115
          Less accumulated depreciation.....   1,225,465        1,095,326
                                             ------------     ------------
                                               4,469,650        4,599,789
                                             ------------     ------------
            Total........................... $14,022,042       14,543,156 
                                             ============     ============


                                     -27-


                      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 principal balances of  these  loans range from $210,640 to $255,891.
These loans require monthly  principal  and  interest payments totaling $67,763
based on an interest rate of 8.625%  per  annum for ten years and a thirty year
amortization period with payment of all  remaining principal at the end of that
period. The Partnership has recorded $236,745,  $20,799 and $172,704 of gain as
a result of  these  installment  sales  in  1997,  1996 and 1995, respectively.
During December 1997,  the  Partnership  received  prepayments  on three of the
thirty-seven mortgage loans  receivable  on  the six-unit condominium buildings
comprising the Schaumburg Terrace  condominium complex. Repayment proceeds from
these prepayments total  $709,800  and,  accordingly,  the Partnership recorded
$204,554 of gain.  The remaining deferred gain of $2,290,140 will be recognized
over the life of the related mortgage loans as principal payments are received. 

On September 12, 1997,  the  Partnership  sold  one  of three lots (.344 acres)
adjacent to the Hillside Living  Center.  The Partnership received $39,579 from
the sale and recorded a gain of $14,805.


(6) Operating Leases

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

         1998.......................................... $ 1,997,715
         1999..........................................   1,986,164
         2000..........................................   1,961,126
         2001..........................................   1,087,237
         2002..........................................     994,886
         Thereafter....................................   7,275,467
                                                        ------------
         Total......................................... $15,302,595
                                                        ============

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.

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


                                     -28-


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

                         Notes to Financial Statements
                                  (continued)


The  Partnership  has  significant   net   operating  leases  with  Elite  Care
Corporation for  the  Douglas  Nursing  Home  and  the  Hillside  Nursing Home,
Scandinavian Health Spa, Inc.  for  the  Scandinavian  Health Club and Wal-mart
Stores, Inc. for the Rantoul and  Duncan  Walmarts.  Revenues from these leases
represent approximately 29%, 13%  and  18%,  respectively, of the Partnership's
income for the year ended December 31, 1997.

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  $24,703  and increases of $538 and
$28,162 in 1997, 1996 and 1995,  respectively,  of rental income for the period
of occupancy for which stepped  rent  increases apply and $435,827 and $460,530
in  related  deferred  rent  receivable  as  of  December  31,  1997  and 1996,
respectively.  These amounts will  be  collected  over the terms of the related
leases as scheduled  rent  payments  are  made.    Deferred  rent receivable of
$16,341 was written off against rental  income  for the year ended December 31,
1997, due to the restructuring of a lease at McHenry Plaza Shopping Center.  


(7) Legal Proceedings

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


(8) Long-Term Debt

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

As of December 31, 1997,  the  required principal payments on the Partnership's
long-term debt over the next five years are as follows:

         1998.......................................... $   40,572
         1999..........................................     44,709
         2000..........................................     49,268
         2001..........................................     54,293
         2002..........................................  1,340,937



                                     -29-


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

                         Notes to Financial Statements
                                  (continued)


(9) Subsequent Events

During January 1998, the  Partnership  paid  a  distribution of $198,824 to the
Limited Partners.















































                                     -30-


<TABLE>                                        INLAND'S MONTHLY INCOME FUND, L.P.
                                                     (a limited partnership)
                                                          Schedule III
                                            Real Estate and Accumulated Depreciation
                                                        December 31, 1997



<CAPTION>
                                Initial Cost
                               to Partnership                             Gross amount at which carried                  Life on
                                     (A)            Costs                     at end of period (B)                       which De-
                           -----------------------             --------------------------------------------------        preciation
                                                 capitalized                                                  Date       in latest
                                      Buildings   subsequent     Land       Buildings             Accumulated Con-       Stmt of 
                                        and           to          and         and        Total   Depreciation stru- Date Operations
                Encumbrance   Land  improvements acquisition improvements improvements    (C)          (D)    cted  Acq  is computed
                ----------- ------- ------------ ----------- ------------ ------------ ---------- ----------- ----- ---- -----------

<S>               <C>        <C>      <C>          <C>          <C>         <C>         <C>        <C>        <C>   <C>    <C>
McHenry Plaza
 Shopping Center
 McHenry, IL.... $    -      330,083  1,637,117    1,564,598     330,083    3,201,715   3,531,798  1,216,811  1968  10/19  30 yrs.
                                                                                                                     1987

Douglas Nursing Home
 Living/Retirement
 Center
 Mattoon, IL....      -      411,778  3,162,687         -        411,778    3,162,687   3,574,465    891,862  1964  01/13  40 yrs.
                                                                                                                     1988
Hillside Nursing Home
 Living Center
 Yorkville, IL..      -      232,034  2,963,679         -        207,260    2,963,679   3,170,939    877,206  1963  01/29  40 yrs.
                                                                                                                     1988

Scandinavian Health
 Spa Health and
 Tennis Club
 Westlake, OH...      -      583,204  2,485,726         -        583,204    2,485,726   3,068,930    807,861  1984  04/20  30 yrs.
                                                                                                                     1988

Wal-Mart - Duncan
 Department Store
 Duncan, OK.....      -      863,992  2,174,555         -        863,992    2,174,555   3,038,547    585,059  1987  08/05  35 yrs.
                                                                                                                     1988

Wal-Mart - Rantoul
 Department Store
 Rantoul, IL.... 1,529,779   276,303  2,380,265         -        276,303    2,380,265   2,656,568    640,406  1988  08/05  35 yrs.
                ---------- --------- ---------- ------------ ----------- ------------ ----------- ----------         1988
                $1,529,779 2,697,394 14,804,029    1,564,598   2,672,620   16,368,627  19,041,247  5,019,205
                ========== ========= ========== ============ =========== ============ =========== ==========


</TABLE>










                                     -31-


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

                           Schedule III (continued)

                   Real Estate and Accumulated Depreciation

                       December 31, 1997, 1996 and 1995


Notes:

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

(B) The aggregate cost of real  estate  owned  at December 31, 1997 for federal
    income tax purposes was approximately $19,041,000 (unaudited).

(C) Reconciliation of real estate owned:


                                         1997          1996          1995
                                         ----          ----          ----
    Balance at beginning of year.... $19,039,521    18,997,576    22,666,224
    Additions.......................      26,500        41,945        14,509
    Disposals.......................      24,774          -        3,683,157
                                     ------------  ------------  ------------
    Balance at end of year.......... $19,041,247    19,039,521    18,997,576
                                     ============  ============  ============

(D) Reconciliation of accumulated depreciation:

    Balance at beginning of year.... $ 4,496,365     3,978,010     4,239,707
    Depreciation expense............     522,840       518,355       551,293
    Disposals.......................        -             -          812,990
                                     ------------  ------------  ------------
    Balance at end of year.......... $ 5,019,205     4,496,365     3,978,010 
                                     ============  ============  ============



















                                     -32-


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 1997.



                                   PART III



Item 10.  Directors and Executive Officers of the Registrant

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


Officers and Directors

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


                               Functional Title

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










                                     -33-


  DANIEL L. GOODWIN (age 54)    is  Chairman  of  the Board of Directors of The
Inland Group, Inc.,  a  billion-dollar  real  estate and financial organization
located in Oak Brook,  Illinois.    Among  Inland's subsidiaries is the largest
property management firm in  Illinois  and  one  of the largest commercial real
estate and mortgage banking firms in the Midwest.

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

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

Mr. Goodwin has served on  the  Board  of the Illinois State Affordable Housing
Trust Fund for the past 7 years.    He  is an advisor for the Office of Housing
Coordination Services of the State  of  Illinois,  and  a member of the Seniors
Housing Committee of the  National  Multi-Housing  Council.  Recently, Governor
Edgar appointed  him  Chairman  of  the  Housing  Production  Committee for the
Illinois State Affordable Housing Conference.    He  also served as a member of
the Cook County Commissioner's  Economic  Housing Development Committee, and he
was the Chairman of the DuPage County  Affordable Housing Task Force.  The 1992
Catholic  Charities  Award  was  presented  to  Mr.  Goodwin  for  his  work in
addressing affordable housing needs.   The  City  of Hope designated him as the
Man of the Year for the Illinois  construction industry.  In 1989,  the Chicago
Metropolitan  Coalition  on  Aging  presented  Mr.  Goodwin  with  an  award in
recognition of his  efforts  in  making  housing  more  affordable to Chicago's
Senior Citizens.  On May 4, 1995, PADS, Inc. (Public Action to Deliver Shelter)
presented Mr. Goodwin  with  an  award,  recognizing  The  Inland  Group as the
leading corporate provider of transitional  housing  for the homeless people of
DuPage County.  Mr. Goodwin also  serves  as Chairman of New Directions Housing
Corporation, a leading provider of affordable housing in northern Illinois.

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


                                     -34-


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

    ROBERT H. BAUM (age  54)  has  been  with  The  Inland  Group, Inc. and its
affiliates since 1968 and is one of  the four original principals.  Mr. Baum is
Vice Chairman and Executive Vice President-General Counsel of The Inland Group,
Inc.  In his  capacity  as  General  Counsel,  Mr.  Baum is responsible for the
supervision  of  the  legal  activities  of  The  Inland  Group,  Inc.  and its
affiliates.  This responsibility  includes  the  supervision  of The Inland Law
Department and serving as liaison with outside counsel.  Mr. Baum has served as
a member  of  the  North  American  Securities  Administrators Association Real
Estate Advisory Committee and as a  member of the Securities Advisory Committee
to the Secretary  of  State  of  Illinois.    He  is  a  member of the American
Corporation Counsel Association and  has  also  been  a  guest lecturer for the
Illinois State Bar Association.   Mr. Baum has been admitted to practice before
the Supreme Court of the United States,  as well as the bars of several federal
courts of appeals and federal district  courts  and  the State of Illinois.  He
received his B.S. Degree from the  University  of Wisconsin and his J.D. Degree
from Northwestern University School of Law.   Mr. Baum has served as a director
of American National Bank of  DuPage.    Currently,  he serves as a director of
Westbank, and is  a  member  of  the  Governing  Council  of  Wellness House, a
charitable organization that provides emotional support for cancer patients and
their families. 

    G. JOSEPH COSENZA (age 54)  has  been  with  The Inland Group, Inc. and its
affiliates 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, immediately
supervises a staff of eight  persons  who  engage in property acquisition.  Mr.
Cosenza has  been  a  consultant  to  other  real  estate  entities and lending
institutions on property appraisal methods.

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

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




                                     -35-


    ROBERT D. PARKS  (age  54)    is  a  Director  of  The  Inland Group, Inc.,
President,  Chairman  and  Chief  Executive   Officer  of  Inland  Real  Estate
Investment Corporation and President,  Chief Executive Officer, Chief Operating
Officer and Affiliated Director of Inland Real Estate Corporation.

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

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

    NORBERT J.  TREONIS  (age  47)    joined  The  Inland  Group,  Inc. and its
affiliates in 1975 and he is  currently Chairman and Chief Executive Officer of
The Inland Property Management Group, Inc.  and a Director of The Inland Group,
Inc.  He serves on the  Board  of Directors of all Inland subsidiaries involved
in the  property  management,  acquisitions  and  maintenance  of  real estate,
including  Mid-America  Property   Management   Corporation,  and  Metropolitan
Construction Services, Inc.  Mr. Treonis  is charged with the responsibility of
the overall management and leasing  of  all apartment units, retail, industrial
and commercial properties nationwide.

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

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

    CATHERINE L. LYNCH (age 39) joined  Inland  in 1989 and is the Treasurer of
Inland Real  Estate  Investment  Corporation.    Ms.  Lynch  is responsible for
managing the Corporate Accounting  Department.    Prior  to joining Inland, Ms.
Lynch worked in the  field  of  public  accounting  for KPMG Peat Marwick since
1980.    She  received  her  B.S.  degree  in  Accounting  from  Illinois State
University.  Ms. Lynch is  a  Certified  Public  Accountant and a member of the
American  Institute  of  Certified  Public  Accountants  and  the  Illinois CPA
Society.  She is registered with the National Association of Securities Dealers
as a Financial Operations Principal.

    PAUL J. WHEELER (age  45)    joined  Inland  in  1982  and is currently the
President of  Inland  Property  Sales,  Inc.,  the  entity  responsible for all
corporately owned  real  estate.    Mr.  Wheeler  received  his  B.A. degree in
Economics from  DePauw  University  and  an  M.B.A.  in Finance/Accounting from
Northwestern University.   Mr.  Wheeler  is  a  Certified Public Accountant and
licensed real estate broker.    For  three  years  prior to joining Inland, Mr.
Wheeler was Vice President/Finance at the real estate brokerage firm of Quinlan
& Tyson, Inc.





                                     -36-


    ROBERTA S. MATLIN (age 53)   joined  Inland in 1984 as Director of Investor
Administration  and  currently  serves  as  Senior  Vice President-Investments.
Prior to that, Ms. Matlin spent 11  years with the Chicago Region of the Social
Security Administration of the  United  States  Department  of Health and Human
Services.  As  Senior  Vice  President-Investments,  she directs the day-to-day
internal operations of  the  General  Partner.    Ms.  Matlin received her B.A.
degree from the University of  Illinois.    She is registered with the National
Association of Securities Dealers, Inc. as a General Securities Principal.

    MARK ZALATORIS (age 40) joined Inland  in 1985 and currently serves as Vice
President of Inland Real  Estate  Investment Corporation.  His responsibilities
include the coordination of due  diligence activities by selling broker/dealers
and is also involved  with  limited  partnership asset management including the
mortgage funds.  Mr.  Zalatoris  is  a  graduate  of the University of Illinois
where he received  a  Bachelors  degree  in  Finance  and  a  Masters degree in
Accounting and Taxation.   He  is  a  Certified  Public  Accountant and holds a
General Securities License with Inland Securities Corporation.

    PATRICIA A. CHALLENGER (age  45)  joined  Inland  in  1985.  Ms. Challenger
serves as Senior Vice President of Inland Real Estate Investment Corporation in
the area of Asset Management.  As  head of the Asset Management Department, she
develops  operating  and   disposition   strategies  for  all  investment-owned
properties.    Ms.  Challenger  received  her  Bachelor's  degree  from  George
Washington University and  her  Master's  from  Virginia  Tech University.  Ms.
Challenger was selected and  served  from  1980-1984 as Presidential Management
Intern, where she was part of a special government-wide task force to eliminate
waste, fraud and abuse  in  government  contracting  and  also served as Senior
Contract Specialist  responsible  for  capital  improvements  in 109 government
properties.  Ms. Challenger is  a  licensed real estate broker, NASD registered
securities sales representative and is a member of the Urban Land Institute. 

    KELLY TUCEK (age  35)  joined  Inland  in  1989  and  is  an Assistant Vice
President of Inland Real Estate Investment Corporation.  As of August 1996, Ms.
Tucek is responsible for  the  Investment  Accounting Department which includes
all public partnership accounting functions along with quarterly and annual SEC
filings.  Prior to joining Inland, Ms.  Tucek was on the audit staff of Coopers
and Lybrand since  1984.    She  received  her  B.A.  Degree  in Accounting and
Computer Science from North Central College.

    VENTON J. CARLSTON (age 40)    joined  Inland  in 1985 and is the Assistant
Controller of Inland Real Estate Investment Corporation where he supervises the
corporate  bookkeeping  staff  and   is  responsible  for  financial  statement
preparation and budgeting for Inland Real Estate Investment Corporation and its
subsidiaries.    Prior  to  joining  Inland,  Mr.  Carlston  was  a partnership
accountant with JMB Realty.   He  received  his  B.S. degree in Accounting from
Southern Illinois University.   Mr.  Carlston  is a Certified Public Accountant
and a member of the Illinois CPA  Society.   He is registered with the National
Association of Securities Dealers, Inc. as a Financial Operations Principal.










                                     -37-


Item 11. Executive Compensation

The General Partner is entitled to  receive a share of cash distributions, when
the cumulative preferred return in excess  of  8%  has been made to the Limited
Partners, and a share of profits or losses as described under the caption "Cash
Distributions" at page 44 and "Allocation of Profits or Losses" at pages 43 and
44 of the Prospectus, and  at  pages  A-6  to A-9 of the Partnership Agreement,
included as an  exhibit  to  the  Prospectus,  which  is incorporated herein by
reference.  Reference  is  also  made  to  Note  2  of  the  Notes to Financial
Statements  (Item  8  of  this  Annual   Report)  for  a  description  of  such
distributions and allocations for 1997.

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

The General Partner of the Partnership and its Affiliates may be reimbursed for
salaries and direct  expenses  of  employees  of  the  General  Partner and its
Affiliates relating to the administration  of  the Partnership.  In 1997, these
expenses amounted to $43,321, of which $2,011 was unpaid at December 31, 1997.

Affiliates of the General  Partner  earned  $33,038  in management fees for the
year ended  December  31,  1997  in  connection  with  managing  certain of the
Partnership's properties.  All of these were paid prior to December 31, 1997.






























                                     -38-


Item 12. Security Ownership of Certain Beneficial Owners and Management

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

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


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


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

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

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


Item 13. Certain Relationships and Related Transactions

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























                                     -39-


                                    PART IV


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

    (a)  The Financial Statements listed in the index at page 13 of this Annual
         Report are filed as part of this Annual Report.

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

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

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

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

    (c)  Financial Statement Schedules.

         Financial statement schedules for  the  years ended December 31, 1997,
         1996 and 1995 are submitted herewith.


                                                                    Page

         Real Estate and Accumulated Depreciation (Schedule III)...  31

         Schedules not filed:

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

    (d)  Reports on Form 8-K:

         None.

No Annual Report or proxy  material  for  the  year  1997  has been sent to the
Partners of the Partnership.   An  Annual  Report  will be sent to the Partners
subsequent to this  filing  and  the  Partnership  will  furnish copies of such
report to the Commission when it is sent to the Partners.











                                     -40-


                                  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/ Robert D. Parks

                            By:   Robert D. Parks
                                  Chairman of the Board
                                  and Chief Executive Officer
                            Date: March 26, 1998

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/ Robert D. Parks

                            By:   Robert D. Parks
                                  Chairman of the Board
                                  and Chief Executive Officer
                            Date: March 26, 1998

                                  /s/ Patricia A. Challenger

                            By:   Patricia A. Challenger
                                  Senior Vice President
                            Date: March 26, 1998

                                  /s/ Kelly Tucek

                            By:   Kelly Tucek
                                  Principal Financial Officer
                                  and Principal Accounting Officer
                            Date  March 26, 1998

                                  /s/ Daniel L. Goodwin

                            By:   Daniel L. Goodwin
                                  Director
                            Date: March 26, 1998

                                  /s/ Robert H. Baum

                            By:   Robert H. Baum
                                  Director
                            Date: March 26, 1998



                                     -41-