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


                                    FORM 10-K

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended             December 31, 2000
                           ----------------------------------------

                                       OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
 OF 1934 [NO FEE REQUIRED]

For the transition period from             to
                               -----------    ------------

Commission file number                0-16817
                       ---------------------------------------

                    Krupp Insured Plus-II Limited Partnership
             (Exact name of registrant as specified in its charter)

        Massachusetts                                     04-2955007
(State or other jurisdiction                  (IRS Employer Identification No.)
of incorporation  or  organization)



One Beacon Street, Boston, Massachusetts                     02108
(Address of principal executive offices)                   (Zip Code)

(Registrant's telephone number, including area code)     (617) 523-0066
                                                     ---------------------

Securities registered pursuant to Section 12(b) of the Act: None

Securities  registered pursuant to Section 12(g) of the Act: Units of Depositary
Receipts representing Units of Limited Partner Interests.

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. [ ].

Aggregate  market  value  of  voting  securities  held  by  non-affiliates:

Not applicable, as securities are non-voting.

Documents incorporated by reference: See Part IV, Item 14

The exhibit index is located on pages 10-11.


<PAGE>



                                     PART I

This form 10-K contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21e of the Securities Exchange Act
of 1934.  Actual  results could differ  materially  from those  projected in the
forward-looking  statements as a result of a number of factors,  including those
identified herein.


ITEM 1.    BUSINESS
------

Krupp Insured Plus-II Limited Partnership (the "Partnership") is a Massachusetts
limited partnership which was formed on October 29, 1986. The Partnership raised
approximately  $292  million  through  a  public  offering  of  limited  partner
interests  evidenced  by units of  depositary  receipts  ("Units")  and used the
investable  proceeds  primarily  to  acquire   participating  insured  mortgages
("PIMs") and  mortgage-backed  securities  ("MBS").  The  Partnership  considers
itself to be engaged only in the industry segment of investment in mortgages.

The  Partnership's  investments in PIMs on multi-family  residential  properties
consist of a MBS guaranteed as to principal and basic  interest.  These MBS were
issued or  originated  under or in  connection  with the housing  program of the
Government National Mortgage Association ("GNMA").  PIMs provide the Partnership
with  monthly  payments of  principal  and basic  interest  and also provide for
Partnership  participation  in the current revenue stream and in residual value,
if  any,  from  a  sale  or  other   realization  of  the  underlying   property
(participation  interest).  The borrower conveys these rights to the Partnership
through a subordinated  promissory note and mortgage. The participation features
are neither insured nor guaranteed.

The  Partnership  also  acquired  MBS and insured  mortgages  collateralized  by
single-family  or  multi-family  mortgage  loans issued or  originated  by GNMA,
Fannie Mae, HUD or the Federal Home Loan Mortgage Corporation ("FHLMC").  Fannie
Mae and FHLMC  guarantee the principal and basic  interest of the Fannie Mae and
FHLMC MBS,  respectively.  GNMA  guarantees  the timely payment of principal and
basic interest on its MBS, and HUD insures the pooled mortgage loans  underlying
the GNMA MBS and its own direct mortgage loans.

Although the  Partnership  will terminate no later than December 31, 2026, it is
expected  that  the  value  of  the  PIMs  generally  will  be  realized  by the
Partnership  through  repayment  or sale as early as ten years from the dates of
the closings of the permanent  loans and that the  Partnership  will realize the
value of all of its other  investments  within that time frame thereby resulting
in a dissolution of the Partnership significantly prior to December 31, 2026.

The  Partnership's  investments  are not  expected  to be  subject  to  seasonal
fluctuations. Any ultimate realization of the participation features of the PIMs
are subject to similar  risks  associated  with equity real estate  investments,
including:  reliance  on the  owner's  operating  skills,  ability  to  maintain
occupancy  levels,  control  operating  expenses,  maintain the  properties  and
provide  adequate  insurance  coverage;  adverse  changes  in  general  economic
conditions,  adverse local conditions,  and changes in governmental regulations,
real estate zoning laws,  or tax laws;  and other  circumstances  over which the
Partnership may have little or no control.

The  requirements  for compliance with federal,  state and local  regulations to
date have not had an  adverse  effect on the  Partnership's  operations,  and no
adverse effect is anticipated in the future.

As of  December  31,  2000,  there were no  personnel  directly  employed by the
Partnership.

ITEM 2.    PROPERTIES
------

None

ITEM 3.    LEGAL PROCEEDINGS
------

There are no material  pending legal  proceedings to which the  Partnership is a
party or to which any of its investments is the subject.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------

None.

<PAGE>

                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS
------

There currently is no established trading market for the Units.

The number of investors  holding Units as of December 31, 2000 was approximately
12,800.  One of  the  objectives  of the  Partnership  is to  provide  quarterly
distributions  of cash flow  generated  by its  investments  in  mortgages.  The
Partnership  anticipates  that future  operations will continue to generate cash
available for distribution.  Adjustments may be made to the distribution rate in
the future due to the realization and payout of the existing mortgages.

On March 30,  2000,  the  Partnership  paid a special  distribution  of $.58 per
Limited Partner interest from the prepayment  proceeds  received during February
2000  on the  Greenhouse  Apartments  PIM  in  the  amount  of  $8,428,984.  The
underlying  property  was  foreclosed  on by the first  mortgage  lender  during
January 1999. The Partnership  continued to receive its full principal and basic
interest  payments due on the PIM while the  underlying  mortgage was in default
because those payments were  guaranteed by GNMA. The Partnership did not receive
any participation interest from this transaction.

On January 11, 2000, the  Partnership  paid a special  distribution  of $.43 per
Limited Partner  interest from the Saratoga  Apartments PIM prepayment  proceeds
received in December 1999 in the amount of $6,204,960.  The underlying  property
value had not increased sufficiently to meet the criteria for the Partnership to
earn any participation interest.

During 1999, the Partnership made special distributions  consisting primarily of
principal  proceeds from the Stanford  Court,  Hillside  Court,  Carlyle  Court,
Waterford Court, Country Meadows and Le Coeur du Monde PIM prepayments.

The Partnership may make special distributions in the future if PIMS prepay or a
sufficient amount of cash is available from MBS and PIM principal collections.

The Partnership made the following  distributions to its Partners during the two
years ended December 31, 2000 and 1999:

<TABLE>
<CAPTION>

                                                        2000                             1999

                                              Amount         Per Unit           Amount         Per Unit
                                          -------------      --------      --------------      --------
Quarterly Distributions:
<S>                                       <C>                 <C>          <C>                  <C>
   Limited Partners                       $   5,862,204       $   .40      $   11,138,189       $   .76
   General Partners                              97,176                           217,645
                                           ------------                    --------------

                                              5,959,380                        11,355,834
                                          -------------                    --------------

Special Distributions:
      Limited Partners                       14,802,066       $  1.01          51,587,401         $3.52
                                          -------------                    --------------

Total Distributions                       $  20,761,446                    $   62,943,235
                                          =============                    ==============
</TABLE>


<PAGE>


ITEM 6.                  SELECTED FINANCIAL DATA
------

The following  table sets forth  selected  financial  information  regarding the
Partnership's  financial position and operating results. This information should
be read in conjunction  with  Management's  Discussion and Analysis of Financial
Condition  and  Results  of  Operations   and  the  Financial   Statements   and
Supplementary  Data,  which are  included in Item 7 and Item 8,  (Appendix A) of
this report, respectively.

<PAGE>

<TABLE>
<CAPTION>


                                    2000                1999                1998                1997             1996
                                    ----                ----                ----                ----             ----

<S>                          <C>                 <C>                   <C>                <C>               <C>
Total revenues               $     3,520,446     $    7,822,665        $  15,335,618      $   16,672,558    $  15,855,280

Net income                         2,770,378          6,146,718           12,017,670          12,972,600       12,331,212

Net income allocated to:
   Limited Partners ("LP")         2,687,267          5,962,316           11,657,140          12,583,422       11,961,276
   Average per LP interest               .18                .41                  .80                 .86             .82

   General Partners                   83,111            184,402              360,530             389,178          369,936
Total assets at:
              December 31         42,256,448         60,161,993          117,626,762         180,126,977      207,552,419

Distributions to:
   Quarterly to LPs                5,862,204         11,138,189           16,414,173          16,414,173       16,414,171
              Average per LP interest    .40                .76                 1.12                1.12             1.12

   Specials to LPs                14,802,066         51,587,401           56,716,830          24,767,815          -
   Average per LP interest              1.01               3.52                 3.87                1.69          -

   General Partners                   97,176            217,645              385,355             436,626          432,214

</TABLE>

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

Liquidity and Capital Resources

The most significant  demands on the  Partnership's  liquidity are the quarterly
distributions  paid to  investors  of  approximately  $1.5  million.  Funds  for
investor  distributions  come from the monthly  principal and interest  payments
received on the PIMs and MBS, the principal prepayments of the PIMs and MBS, and
interest earned on the Partnership's cash and cash equivalents.  In general, the
General  Partners  try  to set a  distribution  rate  that  provides  for  level
quarterly distributions. To the extent that quarterly distributions do not fully
utilize the cash  available for  distribution  and cash balances  increase,  the
General  Partners  may adjust the  distribution  rate or  distribute  such funds
through a special distribution. The portion of distributions attributable to the
principal  collections reduces the capital resources of the Partnership.  As the
capital  resources  decrease,  the total cash flows to the Partnership also will
decrease and over time will result in periodic  adjustments to the distributions
paid to investors.  The General  Partners  periodically  review the distribution
rate to determine  whether an adjustment is necessary based on projected  future
cash  flows.  At this  time  the  General  Partners  have  determined  that  the
Partnership  can  maintain  its  current  distribution  rate of $.10 per Limited
Partner interest per quarter.

In addition to  providing  insured or  guaranteed  monthly  principal  and basic
interest   payments,   the   Partnership's  PIM  investments  also  may  provide
participation  interest if the underlying properties operate  successfully.  The
Partnership  may receive a share in any  operating  cash flow that  exceeds debt
service  obligations  and capital needs or a share in any  appreciation in value
when the properties  are sold or  refinanced.  However,  this  participation  is
neither  guaranteed  nor  insured,  and it is dependent  upon  whether  property
operations or its terminal value meet certain criteria.

<PAGE>


On March 30,  2000,  the  Partnership  paid a special  distribution  of $.58 per
Limited Partner interest from the prepayment  proceeds  received during February
2000  on the  Greenhouse  Apartments  PIM  in  the  amount  of  $8,428,984.  The
underlying  property  was  foreclosed  on by the first  mortgage  lender  during
January 1999. The Partnership  continued to receive its full principal and basic
interest  payments due on the PIM while the  underlying  mortgage was in default
because those payments were  guaranteed by GNMA. The Partnership did not receive
any participation interest from this transaction.

On January 11, 2000, the  Partnership  paid a special  distribution  of $.43 per
Limited Partner  interest from the Saratoga  Apartments PIM prepayment  proceeds
received in December 1999 in the amount of $6,204,960.  The underlying  property
value had not increased sufficiently to meet the criteria for the Partnership to
earn any participation interest.

On November 22, 1999, the  Partnership  paid a special  distribution of $.72 per
Limited  Partner  interest from the Le Coeur du Monde  Apartments PIM prepayment
proceeds  received in October 1999 in the amount of $9,422,001.  The Partnership
also received $472,587 of accrued and unpaid participation interest attributable
to property  operations from its Le Coeur du Monde PIM investment and $1,102,701
of  participation  interest  attributable  to  the  Partnership's  share  in the
increase in the property's value.

On June 18,  1999,  the  Partnership  paid a  special  distribution  of $.83 per
Limited  Partner  interest from the Country  Meadows  Apartments  PIM prepayment
proceeds  received  in May 1999 in the  amount of  $12,015,224.  The  underlying
property  value had not  increased  sufficiently  to meet the  criteria  for the
Partnership to earn any  participation  interest.  The Partnership did receive a
$60,076 prepayment premium for the early payoff of the Country Meadows PIM.

On February 26, 1999, the Partnership  paid a special  distribution of $1.97 per
Limited Partner  interest from the  prepayments of the Stanford Court,  Hillside
Court,  Carlyle Court and Waterford Court  Apartments PIMs. On January 25, 1999,
the  Partnership  received  prepayments of the Stanford  Court,  Hillside Court,
Carlyle Court and Waterford Court  Apartments PIMs in the amounts of $6,609,242,
$4,266,759,  $7,696,897  and  $9,394,386,   respectively.  In  addition  to  the
prepayments,  the Partnership received $860,052 of Shared Appreciation  Interest
and prepayment  penalties and $432,877 of Minimum Additional Interest and Shared
Income Interest during December 1998.

During 1998, the Partnership made three special  distributions.  The Partnership
made special distributions of $.94, $1.63 and $1.30 per Unit in March 1998, July
1998 and  December  1998,  respectively.  The March  1998  special  distribution
consisted  of  the  prepayment  proceeds  from  the  Fallwood,   Greenbrier  and
Westbrooks PIMs. The July 1998 special distributions consisted of the prepayment
proceeds  from the  Longwood  Villas  and Harbor  House PIMs and the  prepayment
proceeds  from  the  Brookside  insured  mortgage.  The  December  1998  special
distribution  consisted of the  prepayment  proceeds from the Walden Village PIM
and the Lily Flagg insured mortgage.

The Partnership's  only remaining PIM investments are the GNMA securities backed
by the first  mortgage loans on the Denrich and Richmond Park  Apartments.  Both
properties  are thirty years old, and as they have aged,  rental rate  increases
have not kept  pace  with the  increasing  costs  of  maintenance,  repairs  and
replacements.   Denrich   Apartments  does  not  compete   successfully  in  the
Philadelphia  neighborhood  where  it is  located.  Occupancy,  which  generally
fluctuates in the mid 80% range, is adversely  affected by cash constraints that
have lead to extensive deferred maintenance. Denrich Apartments operated under a
long term  workout  agreement  with the  Partnership  that expired at the end of
2000.  The General  Partners  anticipate  the workout will be  renegotiated  and
extended under similar terms during 2001.

Richmond Park maintains its position in the stable, older Cleveland suburb where
it is located.  Occupancy generally hovers in the low 90% range, but because the
neighborhood does not support  significant  rental rate increases,  the property
only generates  sufficient cash flow for adequate  maintenance and not enough to
provide for major capital improvements.  Based on these conditions,  the General
Partners do not expect the Partnership will receive participation  interest from
either of the remaining PIM investments.

<PAGE>

During the first five years,  owners are  prohibited  from  prepaying  the first
mortgage loans underlying the PIMs. During the second five years,  borrowers may
prepay the loans by  incurring a prepayment  penalty.  The  Partnership  has the
option to call  certain  PIMs by  accelerating  their  maturity  if they are not
prepaid by the tenth year after  permanent  funding.  The General  Partners will
determine  the merits of  exercising  the call  option for each PIM as  economic
conditions  warrant.  Such factors as the  condition of the asset,  local market
conditions,  the  interest-rate  environment and  availability of financing will
affect those decisions.

Assessment of Credit Risk

The  Partnership's  investments  in mortgages are guaranteed or insured by GNMA,
Fannie Mae, FHLMC or HUD and therefore the certainty of their cash flows and the
risk of material loss of the amounts invested depends on the creditworthiness of
these entities.

Fannie  Mae  is  a  federally  chartered  private  corporation  that  guarantees
obligations  originated  under  its  programs.  FHLMC is a  federally  chartered
corporation  that guarantees  obligations  originated  under its programs and is
wholly-owned  by the twelve Federal Home Loan Banks.  These  obligations are not
guaranteed  by the U.S.  Government  or the Federal  Home Loan Bank Board.  GNMA
guarantees  the timely payment of principal and basic interest on the securities
it  issues,  which  represent  interests  in pooled  mortgages  insured  by HUD.
Obligations insured by HUD, an agency of the U.S. Government,  are backed by the
full faith and credit of the U.S. Government.

At December  31,  2000 the  Partnership  includes  in cash and cash  equivalents
approximately $2.8 million of commercial paper, which is issued by entities with
a credit  rating equal to one of the top two rating  categories  of a nationally
recognized statistical rating organization.

Interest Rate Risk

The  Partnership's  primary market risk exposure is to interest rate risk, which
can be defined as the exposure of the  Partnership's  net income,  comprehensive
income or  financial  condition  to adverse  movements  in  interest  rates.  At
December 31, 2000, the  Partnership's  PIMs and MBS comprise the majority of the
Partnership's  assets.  As such,  decreases in interest rates may accelerate the
prepayment of the  Partnership's  investments.  The Partnership does not utilize
any  derivatives  or other  instruments  to manage this risk as the  Partnership
plans to hold all of its investments to expected maturity.

The Partnership monitors prepayments and considers prepayment trends, as well as
distribution requirements of the Partnership,  when setting regular distribution
policy.  For MBS,  the  Partnership  forecasts  prepayments  based on  trends in
similar  securities  as  reported  by  statistical  reporting  entities  such as
Bloomberg.  For PIMs, the Partnership  incorporates  prepayment assumptions into
planning as individual properties notify the Partnership of the intent to prepay
or as they mature.

The  table  below  provides   information  about  the  Partnership's   financial
instruments  that are  sensitive  to changes in  interest  rates.  For  mortgage
investments,  the table  presents  principal  cash  flows and  related  weighted
average  interest  rates  ("WAIR")  by expected  maturity  dates.  The  expected
maturity date is contractual maturity adjusted for expectations of prepayments.

<PAGE>

<TABLE>

                                    Expected maturity dates ($ in thousands)

<CAPTION>

                                                                                               Total
                    2001       2002        2003        2004          2005      Thereafter      Face      Fair
                                                                                               Value     Value



Interest-sensitive assets:

<S>                <C>        <C>         <C>         <C>         <C>         <C>           <C>         <C>
MBS                $  1,381   $  1,224    $  1,092    $    982    $     890   $    15,566   $  21,135   $   21,451
WAIR                   7.66%      7.66%       7.66%       7.66%        7.66%         7.66%       7.66%

PIMs                    271        292         315         340          367        15,957      17,542       17,588
WAIR                   7.59%      7.59%       7.59%       7.59%        7.59%         7.59%       7.59%
                   --------   --------    --------    --------    ---------   -----------   ---------   ----------

Total Interest-
sensitive assets   $  1,652   $  1,516    $  1,407    $  1,322    $   1,257   $    31,523   $  38,677   $   39,039
                   ========   ========    ========    ========    =========   ===========   =========   ==========
</TABLE>

<TABLE>

    Results of Operations

    The following  discussion relates to the operation of the Partnership during
    the years ended December 31, 2000, 1999 and 1998.

<CAPTION>

                                                                               (Amounts in thousands)
                                                                2000            1999               1998
                                                                ----            ----               ----
         Interest income on PIMs:
<S>                                                         <C>              <C>                <C>
           Basic interest                                   $   1,360        $   3,682          $   7,417
           Participation interest                                -               1,635              3,753
         Interest income on MBS                                 1,685            1,826              3,083
         Other interest income                                    475              680              1,083
         Partnership expenses                                    (628)            (778)            (1,287)
         Amortization of prepaid fees and
           expenses                                              (122)            (898)            (2,031)
                                                            ---------        ---------          ---------

              Net Income                                    $   2,770        $   6,147          $  12,018
                                                            =========        =========          =========
</TABLE>

     Net income decreased during 2000 as compared to 1999 primarily due to lower
     basic and  participation  interest on PIMs. This was partially  offset by a
     decrease in amortization. The reduction in basic interest on PIMs is due to
     the payoff of the  Greenhouse  PIM in 2000 and the payoffs of the Saratoga,
     Le Coeur du Monde, Country Meadows, Stanford Court, Hillside Court, Carlyle
     Court and Waterford Court PIMs in 1999.  Participation  interest was higher
     in 1999  than  2000 as the loans  that  paid off in 1999  generated  higher
     Shared  Appreciation  Interest and prepayment  premiums than the Greenhouse
     PIM which paid off in 2000. The decrease in  amortization  was also related
     to the payoff  activity  in 1999 which  resulted  in the  write-off  of the
     remaining deferred expenses attributed to those loans.

<PAGE>

     Net income  decreased  during  1999 as compared  to 1998  primarily  due to
     significantly lower interest income on PIMs, MBS and other interest income.
     This  was  partially  offset  by  decreases  in  partnership  expenses  and
     amortization.  The reduction in basic interest on PIMs is due to the payoff
     of the Carlyle Court,  Hillside  Court,  Stanford Court,  Waterford  Court,
     Country  Meadows  and Le  Coeur du Monde  PIMs in 1999,  and the  Westbrook
     Manor,  Fallwood,  Greenbrier,  Harbor House,  Walden  Village and Longwood
     Villas  PIMs  during  1998.  Participation  interest  was higher in 1998 as
     compared  to  1999  due  primarily  to  the  Partnership  realizing  Shared
     Appreciation  Interest and/or  prepayment  premiums from the prepayments of
     the Westbrook Manor, Fallwood, Greenbrier, Walden Village, Harbor House and
     Longwood  Villas PIMs and the Brookside  and Lily Flagg  insured  mortgages
     which were in excess of those  amounts  received  when the  Carlyle  Court,
     Hillside  Court,  Stanford  Court,  Waterford  Court,  Country  Meadows and
     LeCouer du Monde PIMs prepaid during 1999. The reduction in interest income
     on MBS is due  primarily  to the  payoff of the Lily  Flagg  and  Brookside
     multi-family  MBS  during  1998 along with  continuing  prepayments  on the
     Partnership's  single-family MBS. The decrease in Partnership  expenses was
     due to a decrease in asset  management  fees which were a result of the PIM
     prepayments mentioned above that reduced the asset base.  Amortization also
     decreased due to the PIM  prepayments.  Other interest income  decreased in
     1999 as compared to 1998 due to  significantly  lower average cash balances
     available for short-term investing in 1999 versus 1998.

     As the  Partnership  distributes  principal  collections  on MBS  and  PIMs
     through  quarterly or special  distributions,  the  invested  assets of the
     Partnership will decline which should result in a continuing decline in net
     income.


ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
------

See Appendix A to this report.


ITEM 9.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
              FINANCIAL DISCLOSURE
------

None.

                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-------

The  Partnership has no directors or executive  officers.  Information as to the
directors and executive  officers of Krupp Plus  Corporation  which is a General
Partner of the  Partnership  and is the  general  partner of  Mortgage  Services
Partners  Limited  Partnership,  which  is  the  other  General  Partner  of the
Partnership, is as follows:

                              Position with
    Name and Age              Krupp Plus Corporation

Douglas Krupp (54)            President, Co-Chairman of the Board and Director
George Krupp (56)             Co-Chairman of the Board and Director
Peter F. Donovan (47)         Senior Vice President
Ronald Halpern (59)           Senior Vice President
Carol Mills (51)              Vice President
Robert A. Barrows (43)        Vice President and Treasurer

Douglas Krupp  co-founded and serves as Co-Chairman and Chief Executive  Officer
of The  Berkshire  Group,  an  integrated  real estate  financial  services firm
engaged  in  real   estate   acquisitions,   property   management,   investment
sponsorship,   venture  capital   investing,   mortgage  banking  and  financial
management,  and ownership of three operating  companies  through private equity
investments.  Mr. Krupp has held the position of Co-Chairman since The Berkshire
Group was  established  as The Krupp  Companies in 1969 and he has served as the
Chief Executive  Officer since 1992. He is a graduate of Bryant College where he
received an honorary Doctor of Science in Business Administration in 1989.

George Krupp is the  Co-Founder  and  Co-Chairman  of The  Berkshire  Group,  an
integrated  real  estate   financial   services  firm  engaged  in  real  estate
acquisitions,  property  management,  investment  sponsorship,  venture  capital
investing,  mortgage  banking and financial  management,  and ownership of three
operating companies through private equity  investments.  Mr. Krupp has held the
position of Co-Chairman  since The Berkshire  Group was established as The Krupp
Companies in 1969. Mr. Krupp has been an instructor of history at the New Jewish
High  School in  Waltham,  Massachusetts  since  September  of 1997.  Mr.  Krupp
attended the  University  of  Pennsylvania  and Harvard  University  and holds a
Master's Degree in History from Brown  University.  Douglas and George Krupp are
brothers.

<PAGE>

Peter F. Donovan is Chief Executive Officer of Berkshire  Mortgage Finance which
position he has held since January of 1998 and in this capacity, he oversees the
strategic growth plans of this mortgage banking firm. Berkshire Mortgage Finance
is the 11th largest  commercial  mortgage  servicer in the United  States with a
servicing and asset management portfolio of $11.5 billion.  Previously he served
as President of  Berkshire  Mortgage  Finance from January of 1993 to January of
1998 and in that capacity he directed the  production,  underwriting,  servicing
and asset  management  activities of the firm. Prior to that, he was Senior Vice
President  of  Berkshire   Mortgage   Finance  and  was   responsible   for  all
participating  mortgage  originations.  Before  joining the firm in 1984, he was
Second Vice  President,  Real Estate Finance for Continental  Illinois  National
Bank & Trust,  where he managed a $300 million  construction  loan  portfolio of
commercial  properties.  Mr. Donovan received a B.A. from Trinity College and an
M.B.A. degree from Northwestern University. Mr. Donovan is currently a member of
the Advisory Council for Fannie Mae.

Ronald Halpern is President and COO of Berkshire Mortgage Finance. He has served
in these positions since January of 1998 and in this capacity, he is responsible
for the overall  operations  of the  Company.  Prior to January of 1998,  he was
Executive  Vice  President,   managing  the  underwriting,   closing,  portfolio
management and servicing  departments  for Berkshire  Mortgage  Finance.  Before
joining  the  firm in  1987,  he  held  senior  management  positions  with  the
Department of Housing and Urban  Development in Washington  D.C. and several HUD
regional  offices.  Mr.  Halpern has over 30 years of  experience in real estate
finance which includes his  experience as prior Chairman of the MBA  Multifamily
Housing Committee. He holds a B.A. degree from the University of the City of New
York and J.D. degree from Brooklyn Law School.

Robert A.  Barrows  is Senior  Vice  President  and Chief  Financial  Officer of
Berkshire  Mortgage  Finance.  Mr. Barrows has held several positions within The
Berkshire  Group since joining the company in 1983 and is currently  responsible
for accounting, financial reporting, treasury and management information systems
for Berkshire Mortgage Finance.  Prior to joining The Berkshire Group, he was an
audit  supervisor  for Coopers & Lybrand  L.L.P.  in Boston.  He received a B.S.
degree from Boston College and is a Certified Public Accountant.

Carol J.C.  Mills is Senior Vice  President  for Loan  Management  of  Berkshire
Mortgage Finance and in this capacity, she is responsible for the Loan Servicing
and Asset Management  functions of Berkshire  Mortgage Finance.  She manages the
estimated  $11.5  billion  portfolio of loans.  Ms.  Mills  joined  Berkshire in
December  1997 as Vice  President  and was promoted to Senior Vice  President in
January  1999.  From  January  1989 through  November  1997,  Ms. Mills was Vice
President of First Winthrop  Corporation and Winthrop Financial  Associates,  in
Cambridge,  MA. Ms. Mills earned a B.A.  degree from Mount Holyoke College and a
Master of Architecture degree from Harvard University.  Ms. Mills is a member of
the Real Estate  Finance  Association,  New England Women in Real Estate and the
Mortgage Bankers Association.


ITEM 11.      EXECUTIVE COMPENSATION
-------

The Partnership has no directors or executive officers.


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

As of December 31,  2000,  no person owned of record or was known by the General
Partners  to own  beneficially  more  than  5% of the  Partnership's  14,655,512
outstanding Limited Partner interests.  The only interests held by management or
its  affiliates  consist of its General  Partner and Corporate  Limited  Partner
Interests.

ITEM 13.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------

Information required under this Item is contained in Note F to the Partnership's
Notes To Financial Statements presented in Appendix A to this report.


<PAGE>



                                     PART IV

ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
-------

(a)         1.  Financial  Statements  - see Index to Financial  Statements  and
            Schedule included under Item 8, Appendix A, page F-2 to this report.

     2.     Financial Statement Schedule - see Index to Financial Statements and
            Schedule included under Item 8, Appendix A, page F-2 to this report.
            All other  schedules  are  omitted as they are not  applicable,  not
            required or the information is provided in the Financial  Statements
            or the Notes thereto.


(b)  Exhibits:

     Number and Description
     Under Regulation S-K

     The following  reflects all applicable  Exhibits required under Item 601 of
Regulation S-K:

(4)    Instruments defining the rights of security holders including indentures:

(4.1)Amended and Restated  Agreement of Limited  Partnership dated as of May 29,
     1987 [Exhibit A to Prospectus included in Post Effective Amendment No. 1 of
     Registrant's  Registration Statement on Form S-11 dated June 18, 1987 (File
     No. 33-9889)].*

(4.2)Second Amendment to Agreement of Limited  Partnership  dated as of June 17,
     1987  [Exhibit  4.6 in  Post  Effective  Amendment  No.  l of  Registrant's
     Registration  Statement  on  Form  S-11  dated  June  18,  1987  (File  No.
     33-9889)].*

(4.3)Subscription  Agreement  whereby a subscriber  agrees to purchase Units and
     adopts the  provisions  of the Amended and  Restated  Agreement  of Limited
     Partnership  [Exhibit D to Prospectus  included in Post Effective Amendment
     No. 1 of  Registrant's  Registration  Statement on Form S-11 dated June 18,
     1987 (File No. 33-9889)].*

(4.4)Copy  of  Amended   Certificate  of  Limited  Partnership  filed  with  the
     Massachusetts  Secretary  of State  on  April  28,  1987.  [Exhibit  4.4 in
     Amendment No. 1 of Registrant's  Registration  Statement on Form S-11 dated
     May 14, 1987 (File No. 33-9889)].*

     (10)   Material Contracts:

(10.1) Form of agreement between the Partnership and Krupp Mortgage Corporation.
     [Exhibit 10.3 in Amendment No. 1 of Registrant's  Registration Statement on
     Form S-11 dated May 14, 1987 (File No. 33-9889)].*

            Denrich Apartments

(10.2) Prospectus for GNMA Pool No. 267075 (PL).  [Exhibit 10.29 to Registrant's
     Report  on Form  10-K  for the year  ended  December  31,  1988  (File  No.
     0-16817)].*

(10.3) Subordinated  Multifamily  Mortgage  (including  Subordinated  Promissory
     Note) dated  November 3, 1988 between  Arthur J. Stagnaro and Krupp Insured
     Plus-II Limited Partnership.  [Exhibit 10.30 to Registrant's Report on Form
     10-K for the year ended December 31, 1988 (File No. 0-16817)].*

<PAGE>


(10.4) Modification Agreement dated June 28, 1995 between Arthur J. Stagnaro and
     Krupp Insured  Plus-II  Limited  Partnership  [Exhibit 10.1 to Registrant's
     Report  on Form  10-Q  for the  quarter  ended  June  30,  1995  (File  No.
     0-16817)].*


            Richmond Park Apartments

(10.5)  Prospectus  for GNMA Pool No.  260865  (PL)  [Exhibit 1 to  Registrant's
     Report on Form 8-K dated August 30, 1989 (File No. 0-16817)].*

(10.6) Subordinated  Multifamily  Open-Ended  Mortgage  (including  Subordinated
     Promissory Note) dated July 14, 1989 between Carl Milstein,  Trustee, Irwin
     Obstgarten,  Al  Simon  and  Krupp  Insured  Plus-II  Limited  Partnership.
     [Exhibit 2 to  Registrant's  Report on Form 8-K dated August 30, 1989 (File
     No. 0-16817)]*

(10.7)  Participation  Agreement  dated  July 31,  1989  between  Krupp  Insured
     Mortgage Limited Partnership and Krupp Insured Plus-II Limited Partnership.
     [Exhibit 3 to  Registrant's  Report on Form 8-K dated August 30, 1989 (File
     No. 0-16817)].*

      * Incorporated by reference.

(c)  Reports on Form 8-K

            During the last quarter of the year ended  December  31,  2000,  the
            Partnership did not file any reports on Form 8-K.


<PAGE>


                                   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,  on the 9th day of March,
2001.

                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

By: Krupp Plus Corporation,
a General Partner



By: /s/ Douglas Krupp
--------------------------------------
Douglas Krupp, President, Co-Chairman
(Principal Executive Officer) and
Director of Krupp Plus Corporation


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 indicated, on the 9th day of March, 2001.

            Signatures                            Title(s)


 /s/ Douglas Krupp          President, Co-Chairman (Principal Executive Officer)
-------------------------   and Director of Krupp Plus Corporation,
Douglas Krupp               a General Partner

 /s/ George Krupp           Co-Chairman (Principal Executive Officer)
-------------------------   and Director of of Krupp Plus Corporation,
George Krupp                a General Partner

 /s/ Peter F. Donovan       Senior Vice President of Krupp Plus Corporation,
-------------------------   a  General Partner

Peter F. Donovan

 /s/ Robert A. Barrows      Treasurer and Chief Accounting Officer of Krupp Plus
-------------------------   Corporation, a General Partner

Robert A. Barrows


<PAGE>





                                   APPENDIX A

                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP







                        FINANCIAL STATEMENTS AND SCHEDULE
                               ITEM 8 of FORM 10-K

             ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
                      For the Year Ended December 31, 2000


<PAGE>



                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
<TABLE>
<CAPTION>

<S>                                                                                                                     <C>
              Report of Independent Accountants                                                                       F-3

              Balance Sheets at December 31, 2000 and 1999                                                            F-4

              Statements of Income and Comprehensive Income for
              the Years Ended December 31, 2000, 1999 and 1998                                                        F-5

              Statements of Changes in Partners' Equity for the Years
              Ended December 31, 2000, 1999 and 1998                                                                  F-6

              Statements of Cash Flows for the Years Ended December 31, 2000,
              1999 and 1998                                                                                           F-7

              Notes to Financial Statements                                                                    F-8 - F-16

</TABLE>


              All  schedules  are  omitted  as they  are not  applicable  or not
              required,   or  the  information  is  provided  in  the  financial
              statements or the notes thereto.





<PAGE>




                        REPORT OF INDEPENDENT ACCOUNTANTS






To the Partners of  Krupp Insured Plus-II Limited Partnership:

In our  opinion,  the  financial  statements  listed in the  accompanying  index
present  fairly,  in all  material  respects,  the  financial  position of Krupp
Insured Plus- II Limited  Partnership (the  "Partnership")  at December 31, 2000
and 1999 and the  results of its  operations  and its cash flows for each of the
three years in the period ended December 31, 2000 in conformity  with accounting
principles  generally accepted in the United States of America.  These financial
statements  are  the  responsibility  of  the  Partnership's   management;   our
responsibility  is to express an opinion on these financial  statements based on
our audits.  We conducted  our audits of these  statements  in  accordance  with
auditing  standards  generally  accepted in the United  States of America  which
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,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.






PricewaterhouseCoopers LLP
Boston, Massachusetts
March 23, 2001














<PAGE>

<TABLE>


                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                                 BALANCE SHEETS

                           December 31, 2000 and 1999


                                     ASSETS

<CAPTION>

                                                                                                     2000               1999
                                                                                                     ----               ----

Participating Insured Mortgages ("PIMs")
<S>                                                                                            <C>                  <C>
  (Notes B, C and H)                                                                           $  17,541,596        $  26,224,388
Mortgage-Backed Securities and insured
 mortgage ("MBS") (Notes B, D and H)                                                              21,247,646           22,277,956
                                                                                               -------------        -------------

      Total mortgage investments                                                                  38,789,242           48,502,344

Cash and cash equivalents (Notes B, C and H)                                                       3,125,710           11,093,183
Interest receivable and other assets                                                                 275,591              378,286
Prepaid acquisition fees and expenses, net of
 accumulated amortization of $733,572 and $1,203,575
 respectively (Note B)                                                                                65,905              179,095
Prepaid participation servicing fees, net of
 accumulated amortization of $0 and $200,032,
 respectively (Note B)                                                                            -                         9,085
                                                                                               -------------        -------------

      Total assets                                                                             $  42,256,448        $  60,161,993
                                                                                               =============        ==============


                                                  LIABILITIES AND PARTNERS' EQUITY


Liabilities                                                                                    $      17,889        $      19,948
                                                                                               -------------        -------------

Partners' equity (deficit) (Notes A, C and E):

  Limited Partners                                                                                42,383,344           60,360,347
   (14,655,512 Limited Partner interest outstanding)

  General Partners                                                                                  (337,448)            (323,383)

  Accumulated comprehensive income (Note B)                                                          192,663              105,081
                                                                                               -------------        -------------

      Total Partners' equity                                                                      42,238,559           60,142,045
                                                                                               -------------        -------------

      Total liabilities and Partners' equity                                                   $  42,256,448        $  60,161,993
                                                                                               =============        =============


</TABLE>


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


<PAGE>
<TABLE>

                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

              For the Years Ended December 31, 2000, 1999 and 1998

<CAPTION>

                                                                           2000                1999               1998
                                                                           ----                ----               ----

      Revenues:
         Interest income - PIMs:
<S>                                                                  <C>                <C>                   <C>
           Basic interest                                            $     1,360,247    $      3,681,868      $   7,416,814
           Participation interest                                            -                 1,634,686          3,752,675
         Interest income - MBS                                             1,685,246           1,826,026          3,083,259
         Other interest income                                               474,953             680,085           1,082,870
                                                                     ---------------    ----------------      --------------

                Total revenues                                             3,520,446           7,822,665         15,335,618
                                                                     ---------------    ----------------      -------------

      Expenses:
         Asset management fee to an affiliate (Note F)                       299,983             496,464            981,223
         Expense reimbursement to affiliates (Note F)                        125,209              94,160             57,448
      Amortization of prepaid fees and expenses (Note B)                     122,275             898,457          2,031,454
         General and administrative                                          202,601             186,866            247,823
                                                                     ---------------    ----------------      --------------

                Total expenses                                               750,068           1,675,947          3,317,948
                                                                     ---------------    ----------------      --------------

      Net income (Notes E and G)                                           2,770,378           6,146,718         12,017,670

      Other Comprehensive Income:

         Net change in unrealized gain  on MBS                                87,582            (435,431)        (1,228,708)
                                                                     ---------------    ----------------      -------------

      Total Comprehensive Income                                     $     2,857,960    $      5,711,287      $  10,788,962
                                                                     ===============    ================      =============

      Allocation of net income (Notes E and G.):

         Limited Partners                                            $     2,687,267    $      5,962,316      $  11,657,140
                                                                     ===============    ================      =============

         Average net income per Limited Partner
          Interest (14,655,512 Limited Partner                       $           .18    $            .41      $         .80
                                                                     ===============    ================      =============
          interests outstanding)

         General Partners                                            $        83,111    $        184,402      $     360,530
                                                                     ===============    ================      =============

</TABLE>



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


<PAGE>



<TABLE>

                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                    STATEMENTS OF CHANGES IN PARTNERS' EQUITY

              For the Years Ended December 31, 2000, 1999 and 1998


<CAPTION>

                                                                                        Accumulated           Total
                                                  Limited              General         Comprehensive         Partners'
                                                 Partners              Partners            Income             Equity
                                                 --------              --------            ------             -------

<S>                                           <C>                    <C>                <C>                <C>
Balance at December 31, 1997                  $  178,597,484         $  (265,315)       $ 1,769,220        $ 180,101,389

Net income                                        11,657,140             360,530             -                12,017,670

Quarterly distributions                          (16,414,173)           (385,355)            -               (16,799,528)

Special distributions                            (56,716,830)               -                -               (56,716,830)

Change in unrealized gain on MBS                      -                     -            (1,228,708)          (1,228,708)
                                               -------------         -----------        -----------        -------------

Balance at December 31, 1998                     117,123,621            (290,140)           540,512          117,373,993

Net income                                         5,962,316             184,402              -                6,146,718

Quarterly distributions                          (11,138,189)           (217,645)             -              (11,355,834)

Special distributions                            (51,587,401)               -                 -              (51,587,401)

Change in unrealized loss on MBS                      -                     -              (435,431)            (435,431)
                                               -------------         -----------        -----------        -------------

Balance at December 31, 1999                      60,360,347            (323,383)           105,081           60,142,045

Net income                                         2,687,267              83,111              -                2,770,378

Quarterly distributions                           (5,862,204)            (97,176)             -               (5,959,380)

Special distributions                            (14,802,066)               -                 -              (14,802,066)

Change in unrealized gain on MBS                      -                     -                87,582               87,582
                                               -------------         -----------        -----------        -------------

Balance at December 31, 2000                   $  42,383,344         $  (337,448)       $   192,663        $  42,238,559
                                               =============         ===========        ===========        =============

</TABLE>

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


<PAGE>
<TABLE>


                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                            STATEMENTS OF CASH FLOWS

              For the Years Ended December 31, 2000, 1999 and 1998

<CAPTION>

                                                                       2000                 1999                   1998
                                                                      -------              -------               --------
Operating activities:
<S>                                                             <C>                      <C>                  <C>
 Net income                                                     $   2,770,378            $    6,146,718       $  12,017,670
 Adjustments to reconcile net income to net
  cash provided by operating activities:
   Amortization of prepaid fees and expenses                          122,275                   898,457           2,031,454
   Shared Appreciation Interest and prepayment
    premiums                                                            -                    (1,162,777)         (2,390,707)
   Changes in assets and liabilities:
       Decrease in interest receivable
          and other assets                                            102,695                   352,543             449,831
       (Decrease) increase in liabilities                              (2,059)                 (232,821)            227,181
                                                                -------------             -------------       -------------

            Net cash provided by operating activities               2,993,289                 6,002,120          12,335,429
                                                                -------------             -------------       -------------

Investing activities:
   Principal collections on PIMs including Shared Appreciation
       Interest and prepayment premiums of  $1,162,777 in 1999
        and $2,255,077 in 1998, respectively                        8,682,792                57,196,596          42,044,923
   Principal collections on MBS including
    prepayment premiums of $135,630 in 1998                         1,117,892                 2,078,965          18,842,263
                                                                -------------            --------------       --------------

            Net cash provided by investing activities               9,800,684                59,275,561          60,887,186
                                                                -------------            --------------       --------------

Financing activities:
Quarterly distributions                                            (5,959,380)              (11,355,834)        (16,799,528)
   Special distributions                                          (14,802,066)              (51,587,401)        (56,716,830)
                                                                -------------            --------------       -------------

    Net cash used for financing activities                        (20,761,446)              (62,943,235)        (73,516,358)
                                                                -------------            --------------        ------------

Net increase (decrease) in cash and equivalents                    (7,967,473)                2,334,446            (293,743)

Cash and cash equivalents, beginning of year                       11,093,183                 8,758,737           9,052,480
                                                                -------------            --------------        ------------

Cash and cash equivalents, end of year                          $   3,125,710            $   11,093,183       $   8,758,737
                                                                =============            ==============       =============

 Non cash activities:
    Increase (decrease) in Fair Value of MBS                    $      87,582            $     (435,431)      $  (1,228,708)
                                                                =============            ==============       =============
</TABLE>



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

<PAGE>


                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

A. Organization

    Krupp Insured Plus-II Limited  Partnership (the "Partnership") was formed on
    October  29,  1986 by filing a  Certificate  of Limited  Partnership  in The
    Commonwealth of Massachusetts. The Partnership was organized for the purpose
    of  investing in  multi-family  loans and mortgage  backed  securities.  The
    Partnership  issued  all of the  General  Partner  Interests  to Krupp  Plus
    Corporation and Mortgage Services  Partners Limited  Partnership in exchange
    for capital contributions  aggregating $3,000. The Partnership terminates on
    December 31, 2026, unless terminated  earlier upon the occurrence of certain
    events as set forth in the Partnership Agreement.

    The Partnership  commenced the public offering of Limited Partner  interests
    on May 29, 1987 and completed  its public  offering  having sold  14,655,412
    Limited Partner  interests for $292,176,381 net of purchase volume discounts
    of $931,859 as of May 27, 1988. In addition,  Krupp  Depository  Corporation
    owns one hundred Limited Partner interests.

B. Significant Accounting Policies

    The  Partnership  uses  the  following  accounting  policies  for  financial
    reporting purposes, which may differ in certain respects from those used for
    federal income tax purposes (Note G).

    Basis of Presentation

    The  accompanying  financial  statements  have been  prepared on the accrual
    basis  of  accounting  in  accordance  with  generally  accepted  accounting
    principles.

   MBS

    The Partnership,  in accordance with Financial  Accounting Standards Board's
    Statement  115,  "Accounting  for  Certain  Investments  in Debt and  Equity
    Securities" ("FAS 115"), classifies its MBS portfolio as available-for-sale.
    As such the  Partnership  carries its MBS at fair market  value and reflects
    any unrealized gains (losses) as a separate  component of Partners'  Equity.
    The Partnership  amortizes  purchase  premiums or discounts over the life of
    the underlying mortgages using the effective interest method.

    The Federal Housing  Administration  ("FHA") insured  mortgage is carried at
    amortized cost. The  Partnership  holds this loan at amortized cost since it
    is fully insured by the FHA.

   PIMs

    The Partnership  accounts for the MBS portion of its PIMs in accordance with
    FAS 115  under  the  classification  of held to  maturity.  The  Partnership
    carries  the  Government  National  Mortgage  Association  ("GNMA")  MBS  at
    amortized cost.

    Basic interest on PIMs is recognized  based on the stated coupon rate of the
    GNMA MBS.  Participation  income is  recognized  as earned  and when  deemed
    collectible by the Partnership.

   Cash and Cash Equivalents

    The Partnership includes all short-term investments with maturities of three
    months or less at the date of acquisition in cash and cash equivalents.  The
    Partnership  invests its cash primarily in commercial paper and money market
    funds with a commercial bank and has not experienced any loss to date on its
    invested cash.



                                    Continued

<PAGE>


                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


B.  Significant Accounting Policies, continued

    Prepaid Fees and Expenses
    Prepaid  fees and  expenses  consist of  acquisition  fees and  expenses and
    participation servicing fees paid for the acquisition and servicing of PIMs.
    The  Partnership  amortizes  prepaid  acquisition  fees and expenses using a
    method that approximates the effective  interest method over a period of ten
    to twelve years,  which represents the actual maturity or anticipated payoff
    of the underlying mortgage.

    The  Partnership  amortized  prepaid  participation  servicing  fees using a
    method  that  approximated  the  effective  interest  method over a ten-year
    period beginning at final endorsement of the loan.

    Upon the repayment of a PIM, any unamortized  acquisition  fees and expenses
    and  unamortized  participation  servicing  fees  related  to such  loan are
    expensed.

    Income Taxes

    The  Partnership  is not liable for federal or state  income  taxes  because
    Partnership income is allocated to the partners for income tax purposes.  If
    the  Partnership's  tax returns are examined by the Internal Revenue Service
    or state taxing  authority  and such an  examination  results in a change in
    Partnership taxable income, such change will be reported to the partners.

    Estimates and Assumptions

    The  preparation  of  financial  statements  in  accordance  with  generally
    accepted  accounting  principles  requires  management to make estimates and
    assumptions  that  affect the  reported  amount of assets  and  liabilities,
    contingent  assets and  liabilities  and revenues  and  expenses  during the
    period. Actual results could differ from those estimates.

C. PIMs

    At December 31, 2000 and 1999, the  Partnership  had investments in two PIMs
    and three PIMs,  respectively.  The Partnership's PIMs consist of a GNMA MBS
    representing the securitized first mortgage loan on the underlying  property
    and  participation  interests in the revenue stream and  appreciation of the
    underlying  property above specified base levels. The borrower conveys these
    participation  features to the Partnership  generally through a subordinated
    promissory note and mortgage (the "Agreement").

    The Partnership  receives guaranteed monthly payments of principal and basic
    interest on the GNMA MBS and HUD insures the first mortgage loan  underlying
    the GNMA MBS.

    The borrower  usually cannot prepay the first mortgage loan during the first
    five years and usually may prepay the first mortgage loan thereafter subject
    to a 9%  prepayment  premium  in years six  through  nine,  a 1%  prepayment
    premium in year ten and no prepayment  premium  thereafter.  The Partnership
    may receive income related to its participation  interests in the underlying
    property, however, these amounts are neither insured nor guaranteed.

    Generally, the participation features consist of the following: (i) "Minimum
    Additional  Interest" rates ranging from .5% to .75% per annum calculated on
    the  unpaid  principal  balance  of the  first  mortgage  on the  underlying
    property , (ii) "Shared Income  Interest" is 25% of the monthly gross rental
    income  generated by the underlying  property in excess of a specified base,
    but only to the  extent  that it exceeds  the  amount of Minimum  Additional
    Interest received during such month and (iii) "Shared Appreciation Interest"
    is 25% of any increase in the value of the underlying  property in excess of
    a specified base. Payment of Minimum Additional Interest and Shared

                                    Continued

<PAGE>

                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS
                                 ---------------

C. PIMs, continued

    Income Interest from the operations of the property is limited to 50% of net
    revenue or Surplus Cash as defined by HUD.

    The total amount of Minimum Additional Interest,  Shared Income Interest and
    Shared Appreciation  Interest payable on the maturity date by the underlying
    borrower usually cannot exceed 50% of any increase in value of the property.

    Shared  Appreciation  Interest is payable when one of the following  occurs:
    (1) the sale of the  underlying  property to an  unrelated  third party on a
    date which is later than five years from the date of the Agreement,  (2) the
    maturity  date  or  accelerated  maturity  date  of  the  Agreement,  or (3)
    prepayment of amounts due under the Agreement and the insured mortgage.

    Under the  Agreement,  the  Partnership,  upon giving twelve months  written
    notice,  can  accelerate  the  maturity  date of the  Agreement  and insured
    mortgage to a date not earlier than ten years from the date of the Agreement
    for (a) the payment of all participation interest due under the Agreement as
    of the  accelerated  maturity date, or (b) the payment of all  participation
    interest due under the Agreement  plus all amounts due on the first mortgage
    note on the property.

    On March 30, 2000, the Partnership  paid a special  distribution of $.58 per
    Limited  Partner  interest  from the  prepayment  proceeds  received  during
    February 2000 on the Greenhouse  Apartments PIM in the amount of $8,428,984.
    The  underlying  property was  foreclosed  on by the first  mortgage  lender
    during January 1999. The Partnership continued to receive its full principal
    and basic interest payments due on the PIM while the underlying mortgage was
    in default  because those payments were  guaranteed by GNMA. The Partnership
    did not receive any participation interest from this transaction.

    On January 11, 2000, the Partnership paid a special distribution of $.43 per
    Limited  Partner  interest  from  the  Saratoga  Apartments  PIM  prepayment
    proceeds  received  in  December  1999  in the  amount  of  $6,204,960.  The
    underlying property value had not increased  sufficiently enough to meet the
    criteria for the Partnership to earn any participation interest.

    In September 1999, the Partnership received Shared Appreciation Interest and
    accrued  Minimum  Additional  and Shared Income  Interest of $1,102,701  and
    $472,587,  respectively  in  connection  with the Le Coeur du Monde PIM. The
    Partnership  also received  $279,447  relating to repayment of interest rate
    rebates.  The Partnership  received the principal  proceeds of $9,422,001 in
    October.  The  principal  proceeds  and Shared  Appreciation  Interest  were
    distributed to the Limited Partners  through a special  distribution of $.72
    per Limited Partner interest on November 22, 1999.

    On June 18, 1999, the  Partnership  made a special  distribution of $.83 per
    Limited  Partner  interest with the proceeds of the Country Meadows PIM. The
    Partnership  received  principal of $12,015,224 and a prepayment  premium of
    $60,076 from this prepayment.

    On February 26, 1999, the  Partnership  made a special  distribution  to the
    Limited  Partners  of $1.97  per  Limited  Partner  Interest.  This  special
    distribution  was  the  result  of the  prepayment  of the  Stanford  Court,
    Hillside  Court,  Carlyle Court and Waterford  Court  Apartments  PIMs.  The
    Partnership  received  principal of $27,967,284  during January 1999, Shared
    Appreciation  Interest  and  prepayment  premiums  of  $860,052  and accrued
    Minimum  Additional and Shared Income  Interest of $432,877  during December
    1998 from these prepayments.



                                    Continued

<PAGE>


                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS
                                 ---------------
C. PIMs, continued

    On October 19, 1998,  the  Partnership  received a prepayment  on the Walden
    Village  Apartments PIM of  $6,990,486.  Also,  the  Partnership  received a
    prepayment premium of $165,599.  On December 4, 1998, the Partnership made a
    special distribution to the investors of $.49 per Limited Partner interest.

    During the second quarter of 1998, the Partnership  received  prepayments of
    the Harbor  House and  Longwood  Villas  Apartments  PIMs.  The  Partnership
    received the outstanding  principal  balance of $12,146,408 and a prepayment
    premium of $750,000 from the Harbor House PIM and the outstanding  principal
    balance of $6,261,587 from the Longwood Villas PIM. During the first quarter
    of 1998, the Partnership  received a prepayment  premium of $62,616 from the
    Longwood Villas PIM. The Partnership made a special distribution of $.43 per
    Limited Partner interest  relating to the Longwood Villas  Apartments PIM on
    July 17,  1998  and a  special  distribution  of $.88  per  Limited  Partner
    interest for the Harbor House  Apartment PIM prepayment was made on July 24,
    1998.

    During the first quarter of 1998, the  Partnership  received  prepayments of
    the Westbrook Manor,  Fallwood and Greenbrier  Apartment PIMs in the amounts
    of $4,841,446,  $6,505,922 and $2,196,031,  respectively. In addition to the
    prepayments,  the  Partnership  received  $416,810  of  Shared  Appreciation
    Interest  and  $632,002 of Minimum  Additional  Interest  and Shared  Income
    Interest.  On March 27, 1998, the Partnership made a special distribution to
    the investors of $.94 per Limited Partner interest.

    At December 31, 2000 and 1999 there were no loans  within the  Partnership's
    portfolio that were delinquent as to principal or interest.

    The  Partnership's  PIMs consisted of the following at December 31, 2000 and
    1999:

<TABLE>
<CAPTION>

                                                                                               Investment Basis at
                                                                                                  December 31,
                                                                                                --------------
                  Original         Interest         Maturity           Monthly
GNMA             Face Amount       Rates (a)         Dates (f)         Payment (g)           2000              1999
----           --------------    -------------   ----------------     --------------     ------------     --------------
Denrich
Apartments
Philadelphia,
<S>            <C>                   <C>              <C>              <C>               <C>              <C>
 PA            $    3,500,000        8%               12/15/23         $      24,800     $  3,148,969     $    3,193,146
                                   (b)(d)
                                   (e)(h)

Richmond Park
Richmond
Heights, OH        16,000,000       7.50%              8/15/24               107,600       14,392,627         14,597,481
                                 (b)(d)(e)(i)


The Greenhouse
Omaha, NE           8,810,900       8.50%              2/15/30                64,500            -              8,433,761
               --------------    (c)(d)(e)                                              --------------    --------------
               $   28,310,900                                                           $   17,541,596    $   26,224,388
               ==============                                                           ==============    ==============
                                                                                                (j)            (j)
</TABLE>


(a)  Represents  the permanent  interest rate of the GNMA MBS. In addition,  the
     Partnership  receives  participation  interest  consisting  of (i)  Minimum
     Additional   Interest,   (ii)  Shared  Income  Interest  and  (iii)  Shared
     Appreciation Interest.

(b)  Minimum Additional Interest is at a rate of .5% per annum calculated on the
     unpaid principal balance of the first mortgage note.

                                    Continued

<PAGE>


                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


C. PIMs, continued

(c)  Minimum  Additional  Interest was at a rate of .75% per annum calculated on
     the unpaid principal balance of the first mortgage note.

(d)  Shared Income Interest is based on 25% of monthly gross rental income over
     a specified base amount.

(e)  Shared Appreciation Interest is based on 25% of any increase  in the
     value of the project over the specified base value.

(f)  The  Partnership's   GNMA  MBS  have  call  provisions,   which  allow  the
     Partnership to accelerate their respective maturity date.

(g)  The normal  monthly  payment  consisting of principal and basic interest is
     payable  monthly at level  amounts  over the term of the GNMA MBS. The GNMA
     MBS  generally  may not be  prepaid  during the first five years and may be
     prepaid subject to a 9% prepayment  premium in years six through nine, a 1%
     prepayment premium in year ten and no prepayment premium after year ten.

(h)  On June 28, 1995, the  Partnership  entered into a temporary basic interest
     rate reduction  agreement on the Denrich  Apartments PIM. Beginning July 1,
     1995,  the basic  interest  rate  decreased  from 8% per annum to 6.25% per
     annum  for  thirty  months,  then  increased  to 6.75%  per  annum  for the
     following  thirty-six  month period and then will  increase to the original
     rate of 8% per annum. The difference between basic interest at the original
     interest  rate and the reduced  rates will  accumulate  and be payable from
     surplus  cash or from  the net  proceeds  of a sale or  refinancing.  These
     accumulated  amounts will be due and payable prior to any  distributions to
     the borrower or payment of participation interest to the Partnership.  Also
     under the agreement,  the Base Value for  calculating  Shared  Appreciation
     Interest decreased from $4,025,000 to $3,500,000.

(i)  The  Partnership  holds a 62%  interest  in this PIM  while  the  remaining
     portion  is  held  by  Krupp  Insured  Mortgage  Limited  Partnership,   an
     affiliate.

(j)  The aggregate cost of PIMs for federal income tax purposes is $17,541,596.

     A reconciliation  of the carrying value of PIMs for each of the three years
     in the period ended December 31, 2000 is as follows:

<TABLE>
<CAPTION>

                                                         2000                   1999                    1998
                                                         ----                   ----                    ----

<S>                                                <C>                    <C>                    <C>
Balance at beginning of period                     $ 26,224,388           $   82,258,207         $ 122,048,053

Deductions during period:
   Prepayments and
    principal collections                            (8,682,792)             (56,033,819)           (39,789,846)
                                                   ------------           --------------         --------------

Balance at end of period                           $ 17,541,596           $   26,224,388         $   82,258,207
                                                   ============           ==============         ==============

</TABLE>

The  underlying  mortgages  of  the  PIMs  are  collateralized  by  multi-family
apartment  complexes located in 2 states. The apartment  complexes range in size
from 91 to 736 units.


                                    Continued

<PAGE>



                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS



D. MBS

      On October 15,  1998,  the  Partnership  received a repayment  on the Lily
      Flagg MBS of $11,721,863. A prepayment premium of $117,330 was received on
      September 17, 1998. On December 2, 1998,  the  Partnership  made a special
      distribution to investors of $.81 per Limited Partner interest.

      On June 19, 1998, the  Partnership  received a prepayment of the Brookside
      insured mortgage in the amount of $4,605,549, representing the outstanding
      principal  balance and a prepayment  premium of $18,300.  The  Partnership
      made a special  distribution of $.32 per Limited Partner  interest on July
      24, 1998.

      At December 31, 2000,  the  Partnership's  MBS  portfolio has an amortized
      cost of  $9,407,384  and  unrealized  gains  and  losses of  $233,123  and
      $40,460,  respectively.  At December 31, 2000, the  Partnership's  insured
      mortgage had an amortized  cost of $11,647,599  and an unrealized  gain of
      $203,833.  At December 31, 1999,  the  Partnership's  MBS portfolio had an
      amortized cost of $10,409,242 and unrealized  gains and losses of $247,471
      and  $142,390,  respectively.  At December  31,  1999,  the  Partnership's
      insured  mortgage had an amortized cost of  $11,763,633  and an unrealized
      loss of $126,930. The portfolio has maturities ranging from 2007 to 2030.

<TABLE>
<CAPTION>

                                                                                            Unrealized
                  Maturity Date                               Fair Value                    Gain/(Loss)
                  -------------                             -------------                   ----------
<S>               <C>    <C>                                <C>                          <C>
                  2001 - 2005                               $  -                         $    -
                  2006 - 2010                                  1,360,442                         83,183

                  2011 - 2030                                 20,091,037                        313,313
                                                            ------------                  -------------

                      Total                                 $ 21,451,479                  $     396,496
                                                            ============                  =============
</TABLE>


E.    Partners' Equity

      Profits and losses from Partnership operations and Distributable Cash Flow
      are allocated 97% to the  Unitholders  and Corporate  Limited Partner (the
      "Limited Partners") and 3% to the General Partners.

      Upon  the  occurrence  of  a  capital  transaction,   as  defined  in  the
      Partnership Agreement, net cash proceeds will be distributed first, to the
      Limited Partners until they have received a return of their total invested
      capital, second, to the General Partners until they have received a return
      of their total invested capital, third, 99% to the Limited Partners and 1%
      to the General Partners until the Limited Partners receive an amount equal
      to any deficiency in the 11% cumulative  return on their invested  capital
      that  exists  through  fiscal  years  prior  to the  date  of the  capital
      transaction,  fourth,  to the class of  General  Partners  until they have
      received an amount  equal to 4% of all amounts of cash  distributed  under
      all capital  transactions and fifth, 96% to the Limited Partners and 4% to
      the General Partners.

      Profits arising from a capital transaction,  will be allocated in the same
      manner as related cash  distributions.  Losses from a capital  transaction
      will  be  allocated  97% to the  Limited  Partners  and 3% to the  General
      Partners.

      During 2000,  1999 and 1998 the Partnership  made quarterly  distributions
      totaling $.40, $.76 and $1.12 per Limited Partner interest,  respectively.
      The Partnership made special  distributions of $1.01,  $3.52 and $3.87 per
      Limited Partner interest in 2000, 1999 and 1998, respectively.


                                    Continued

<PAGE>



                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


E. Partners' Equity, continued

<TABLE>

   As of December 31, 2000, the following  cumulative partner  contributions and
   allocations have been made since the inception of the Partnership:

<CAPTION>

                                                   Corporate                          Accumulated
                                                    Limited         General          Comprehensive
                          Unitholders                Partner        Partners             Income             Total
                        ----------------         ---------------  -------------       -------------    --------------

Capital
<S>                     <C>                      <C>              <C>                 <C>              <C>
contributions           $  292,176,381           $      2,000     $     3,000         $     -          $  292,181,381

Syndication
costs                      (15,580,734)                   -           -                     -             (15,580,734)

Quarterly
distributions             (243,888,375)                (1,700)     (5,829,562)              -            (249,719,637)

Special
distributions             (167,804,464)                (1,145)        -                     -            (167,805,609)

Net income                 177,480,142                  1,239       5,489,114               -             182,970,495

Unrealized
gains on MBS                       -                      -           -                   192,663             192,663
                        --------------           ------------    ------------        ------------      --------------

Total at
December 31
2000                    $   42,382,950           $        394    $   (337,448)        $   192,663      $   42,238,559
                        ==============           ============    ============        ============      ==============
</TABLE>


F. Related Party Transactions

   Under the terms of the Partnership  Agreement,  the General Partners or their
   affiliates are entitled to an asset  management fee for the management of the
   Partnership's  business,  equal  to  .75%  per  annum  of  the  value  of the
   Partnership's  actual and committed mortgage assets,  payable quarterly.  The
   General  Partners may also receive an incentive  management  fee in an amount
   equal to .3% per annum on the  Partnership's  total invested  assets provided
   the Unitholders have received their specified non-cumulative annual return on
   their  Invested  Capital.  Total fees  payable to the  General  Partners  for
   management  services shall not exceed 10% of Distributable Cash Flow over the
   life of the Partnership.  Additionally, the Partnership reimburses affiliates
   of the  General  Partners  for certain  costs  incurred  in  connection  with
   maintaining  the books and records of the  Partnership  the  preparation  and
   mailing of financial  reports,  tax information and other  communications  to
   investors and legal fees and expenses.




                                    Continued

<PAGE>



                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS



G.     Federal Income Taxes

       The  reconciliation of the income reported in the accompanying  financial
       statements  with the income  reported in the  Partnership's  2000 federal
       income tax return is as follows:

<TABLE>
<CAPTION>


<S>                                                                                       <C>
       Net income per statement of income                                                 $    2,770,378

       Less:  Book to tax difference for amortization of
                prepaid fees and expenses                                                       (505,771)
                                                                                          ---------------
       Net income for federal income tax purposes                                         $    2,264,607
                                                                                          ===============

       The  allocation of the 2000 net income for federal income tax purposes is
as follows:

                                                                                             Portfolio
                                                                                              Income

              Unitholders                                                                 $    2,196,654
              Corporate Limited Partner                                                               15
              General Partners                                                                    67,938
                                                                                          ---------------

                                                                                          $    2,264,607
</TABLE>

       For the years ended December 31, 2000, 1999 and 1998 the average per unit
       net income to the  Unitholders  for federal income tax purposes was $.15,
       $.33 and $.68 respectively.

       The basis of the Partnership's assets for financial reporting purposes is
       less than its tax  basis by  approximately  $929,000  and  $1,523,000  at
       December 31, 2000 and 1999, respectively.  The basis of the Partnership's
       liabilities  for  financial  reporting  purposes  are the same as its tax
       basis at December 31, 2000 and 1999, respectively.

H.     Fair Value Disclosures of Financial Instruments

       The  Partnership  uses the following  methods and assumptions to estimate
       the fair value of each class of financial instruments:

       Cash and Cash Equivalents

       The carrying amount approximates fair value because of the short maturity
       of those instruments.

       MBS

       The  Partnership  estimates  the fair value of MBS based on quoted market
       prices while it estimates  the fair value of insured  mortgages  based on
       quoted prices of MBS with similar interest rates.  Based on the estimated
       fair  value  determined   using  these  methods  and   assumptions,   the
       Partnership's investments in MBS had gross unrealized gains and losses of
       approximately  $437,000 and $40,000 at December 31, 2000 and $247,000 and
       $269,000 at December 31, 1999.


                                    Continued

<PAGE>


                    KRUPP INSURED PLUS-II LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS


H.     Fair Value Disclosures of Financial Instruments, continued
       -----------------------------------------------

       PIMs

       As there is no active  trading market for these  investments,  Management
       estimates  the fair value of the PIMs using quoted  market  prices of MBS
       having  a  similar  interest  rate.   Management  does  not  include  any
       participation interest in the Partnership's  estimated fair value arising
       from the  properties  as  Management  does not believe it can predict the
       time of  realization  of the  feature  with any  certainty.  Based on the
       estimated fair value determined using these methods and assumptions,  the
       Partnership's   investments  in  PIMs  had  gross   unrealized  gains  of
       approximately  $46,000 at December 31, 2000 and gross unrealized gains of
       approximately $478,000 at December 31, 1999.


       At  December  31,  2000  and  1999,  the  estimated  fair  values  of the
       Partnership's  financial  instruments are as follows  (amounts rounded to
       nearest thousand):

<TABLE>
<CAPTION>

                                                                  2000                             1999
                                                                  ----                             ----
                                                           Fair           Carrying           Fair         Carrying
                                                           Value            Value           Value            Value
                                                        ---------         ---------       ---------        ----------

<S>                                                     <C>               <C>             <C>              <C>
        Cash and cash equivalents                       $   3,126         $   3,126       $  11,093        $   11,093

        MBS and insured mortgages                          21,451            21,248          22,151            22,278

        PIMs                                               17,588            17,542          26,702            26,224
                                                        ---------         ---------       ---------        ----------
                                                        $  42,165         $  41,916       $  59,946        $   59,595
                                                        =========         =========       =========        ==========


</TABLE>





<PAGE>



          Unaudited Distributable Cash Flow and Net Cash Proceeds from
                              Capital Transactions


Shown below is the calculation of Distributable  Cash Flow and Net Cash Proceeds
from  Capital  Transactions,  as  defined  by  Section  17  of  the  Partnership
Agreement,  and the source of cash distributions for the year ended December 31,
2000 and the period  from  inception  through  December  31,  2000.  The General
Partners  provide certain of the information  below to meet  requirements of the
Partnership  Agreement  and  because  they  believe  that  it is an  appropriate
supplemental measure of operating performance.  However, Distributable Cash Flow
and Net Cash Proceeds from Capital  Transactions should not be considered by the
reader as a  substitute  to net  income  as an  indicator  of the  Partnership's
operating performance or to cash flows as a measure of liquidity.

<TABLE>
<CAPTION>

                                                                                  Year Ended      Through Inception
                                                                                   12/31/00           12/31/00
                                                                                   --------          ---------
                                                                        (Amounts in thousands, except per Unit amounts)
Distributable Cash Flow:
-----------------------
<S>                                                                                <C>               <C>
Income for tax purposes                                                            $   2,265         $  184,093
Items not requiring (not providing) the use of
 operating funds:
   Amortization of prepaid fees and expenses                                             628             16,634

   Acquisition expenses paid from offering
    proceeds charged to operations                                                     -                    690
   Shared Appreciation Income/prepayment premiums                                          1             (6,157)
   Gain on sale of MBS                                                                 -                   (377)
                                                                                   ---------         ----------
Total Distributable Cash Flow ("DCF")                                              $   2,894         $  194,883
                                                                                   =========         ==========

Limited Partners Share of DCF                                                      $   2,808         $  189,037
                                                                                   =========         ==========

Limited Partners Share of DCF per Unit                                             $     .19         $    12.90
                                                                                   =========         ==========

General Partners Share of DCF                                                      $      86         $    5,846
                                                                                   =========         ==========

Net Proceeds from Capital Transactions:
--------------------------------------
Principal collections on PIMs and PIM sale proceeds
 including Shared Appreciation Income/prepayment premiums                          $   8,683         $  174,260
Principal collections on MBS and MBS sale proceeds                                     1,118             93,527
Reinvestment of MBS and PIM principal collections
 and sale proceeds                                                                       -              (41,966)

Gain on sale of MBS                                                                      -                  377
                                                                                   ------------      ----------
Total Net Proceeds from Capital Transactions                                       $   9,801         $  226,198
                                                                                   =========         ==========

Cash available for distribution
(DCF plus proceeds from Capital Transactions)                                      $  12,695         $  421,081
                                                                                   =========         ===========

Distributions:
   Limited Partners                                                                $  14,362(a)      $  413,161(b)
                                                                                   =========         ==========

   Limited Partners Average per Unit                                               $     .98(a)      $    28.19(b)(c)
                                                                                   =========         ==========


   General Partners                                                                $      86(a)      $    5,846(b)
                                                                                   =========         ==========

           Total Distributions                                                     $  14,448         $  419,007
                                                                                   =========         ==========
</TABLE>

(a)      Represents  all  distributions  paid in 2000  except the  January  2000
         special  distribution and the February 2000 quarterly  distribution and
         includes  an  estimate  of the  quarterly  distribution  to be  paid in
         February 2001.
(b)      Includes an estimate of the quarterly distribution to be paid in
         February 2001.
(c)      Limited Partners average per Unit return of capital as of February 2001
         is $15.29 [$28.19 - $12.90] Return of capital  represents  that portion
         of distributions which is not funded from DCF such as proceeds from the
         sale of  assets  and  substantially  all of the  principal  collections
         received from MBS and PIMs.