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

                                    FORM 10-Q

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                      For the Period Ended: March 31, 1997

                         Commission File Number 0-16531

                        EQUITABLE CAPITAL PARTNERS, L.P.
      (Exact name of registrant as specified in its governing instruments)

              Delaware                               13-3486115
      (State or other jurisdiction         (IRS Employer Identification No.)
     of incorporation or organization)

                           1345 Avenue of the Americas
                            New York, New York 10105
              (Address of principal executive offices and zip code)

  Registrant's telephone number, including area code:(212) 969-1000

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

     Title of each class             Name of each exchange on which registered
           None                                  Not Applicable

           Securities registered pursuant to Section 12(g) of the Act
                      Units of Limited Partnership Interest
                                (Title of class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No .

Selected  information  from the Prospectus,  dated July 15, 1988, and filed with
the Securities and Exchange Commission on July 19, 1988 (File No. 33-20093),  is
incorporated  by reference into Parts I, II and III of this Quarterly  Report on
Form 10-Q.



<PAGE>
                        EQUITABLE CAPITAL PARTNERS, L.P.

                                TABLE OF CONTENTS

                         PART I - FINANCIAL INFORMATION

                                                           Page
Item 1.  Financial Statements

Statements of Assets, Liabilities and Partners'
  Capital as of March 31, 1997 and December 31, 1996        5

Statements of Operations - For the Three
  Months Ended March 31, 1997 and 1996                      6

Statements of Changes in Net Assets - For the Three
  Months Ended March 31, 1997 and 1996                      7

Statements of Cash Flows - For the Three Months Ended
  March 31, 1997 and 1996                                   8

Statement of Changes in Partners' Capital -
  For the Three Months Ended March 31, 1997                 9

Schedule of Portfolio Investments - March 31, 1997         10

Supplemental Schedule of Realized Gains and Losses
  For the Three Months Ended March 31, 1997                13

Notes to Financial Statements                              14


Item 2.  Management's Discussion and Analysis of
  Financial Condition and Results of Operations            21


                PART II - OTHER INFORMATION

Item 6.  Exhibits                                          25




<PAGE>
<TABLE>
<CAPTION>
                         EQUITABLE CAPITAL PARTNERS,L.P.
                              STATEMENTS OF ASSETS
                        LIABILITIES AND PARTNERS' CAPITAL


<S>                                                              <C>            <C>                <C>
                                                                                   March 31, 1997
ASSETS:                                                            Notes            (Unaudited)          December 31, 1996
                                                                                   -------------         -----------------  

     Investments                                                  2,10,12
         Enhanced Yield Investments at Value-
             Managed Companies
             (amortized cost of $31,814,376 at
             March 31, 1997 and $55,159,154
             at December 31, 1996)                                                 $   9,478,266          $  52,325,273
             Non-Managed Companies
             (amortized cost of $17,486,791 at
             March 31, 1997 and $19,239,803
             at December 31, 1996)                                                    22,356,040             28,618,359
         Temporary Investments
             (at amortized cost )                                                     52,645,434             27,105,414
 
     Cash                                                                                 23,304                 91,206
     Interest Receivable                                             2,12                212,850                753,608
     Note Receivable                                                  3,4              1,779,414              1,846,593
     Prepaid Expenses & Other Assets                                                       6,017                102,932

TOTAL ASSETS                                                                       $  86,501,325          $ 110,843,385
                                                                                   =============          =============


LIABILITIES AND PARTNERS' CAPITAL

     Liabilities
         Professional Fees Payable                                      9          $      29,963          $      40,107
         Independent General Partners' Fees Payable                     8                 15,485                 24,456
         Fund Administrative Expenses Payable                           7                 45,785                 58,985
         Other Accrued Liabilities                                                       211,663                 11,663
             Total Liabilities                                                           302,896                135,211

     Partners' Capital
         Managing General Partner                                     3,4              1,446,913              1,550,892
         Limited Partners (284,611 Units)                               4             84,751,516            109,157,282
             Total Partners' Capital                                                  86,198,429            110,708,174

TOTAL LIABILITIES AND PARTNERS' CAPITAL                                            $  86,501,325          $ 110,843,385
                                                                                   =============          =============


               See the Accompanying Notes to Financial Statements.

</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                        EQUITABLE CAPITAL PARTNERS, L.P.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<S>                                                                   <C>                      <C>
                                                                                For the Three Months Ended
                                                                          ------------------------------------------- 
                                                                          March 31, 1997               March 31, 1996
                                                                          --------------               -------------- 
INVESTMENT INCOME- Notes 2,12:
     Interest                                                             $    1,239,358               $    1,105,410
     Discount                                                                         --                       11,737
     Dividend                                                                    122,907                           --
          TOTAL INVESTMENT INCOME                                              1,362,265                    1,117,147

EXPENSES:
     Investment Advisory Fee- Note 6                                             369,616                      326,213
     Fund Administration Fees and Expenses- Note 7                               117,263                      238,906
     Independent General Partners'
      Fees and Expenses- Note 8                                                   35,000                       48,684
     Professional Fees - Note 9                                                   15,000                        8,270
     Insurance Fees                                                                 --                          5,256
     Valuation Expenses                                                            3,500                       13,521
          TOTAL EXPENSES                                                         540,379                      640,850

NET INVESTMENT INCOME                                                            821,886                      476,297

NET CHANGE IN UNREALIZED DEPRECIATION ON INVESTMENTS- Note 12                (24,011,536)                  (5,988,997)

NET REALIZED GAINS ON INVESTMENTS- Note 10                                    20,466,783                    2,187,736

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS                     $    (2,722,867)              $   (3,324,964)
                                                                         ===============               ==============

               See the Accompanying Notes to Financial Statements.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                        EQUITABLE CAPITAL PARTNERS, L.P.
                       STATEMENTS OF CHANGES IN NET ASSETS
                                   (UNAUDITED)


<S>                                                                             <C>                    <C>
                                                                                    For the Three Months Ended
                                                                               ------------------------------------
                                                                               March 31, 1997        March 31, 1996
                                                                               --------------        -------------- 
FROM OPERATIONS:

   Net Decrease in Net Assets Resulting from Operations                        $   (2,722,867)       $   (3,324,964)

   Cash Distributions to Partners                                                 (21,719,699)          (14,524,791)

   Reduction in Managing General Partners' Contribution                               (67,179)              (54,358)

   Total Decrease                                                                 (24,509,745)          (17,904,113)

NET ASSETS:

   Beginning of Period                                                            110,708,174           112,353,878

   End of Period                                                               $   86,198,429        $   94,449,765
                                                                               ==============        ==============


               See the Accompanying Notes to Financial Statements.
</TABLE>


<PAGE>
<TABLE>
<CAPTION>
                        EQUITABLE CAPITAL PARTNERS, L.P.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<S>                                                                            <C>                       <C>
                                                                                    For the Three Months Ended
                                                                                -------------------------------------
INCREASE (DECREASE) IN CASH                                                     March 31, 1997         March 31, 1996     
CASH FLOWS FROM OPERATING ACTIVITIES:                                           --------------         --------------               
        Interest and Discount Income                                              $  4,795,796           $    767,909
        Fund Administration Fees & Expenses                                           (130,463)              (252,430)
        Investment Advisory Fee                                                       (168,902)              (326,213)
        Independent General Partners' Fees and Expenses                                (43,971)               (47,729)
        Valuation Expenses                                                              (4,214)                    --
        Sale (Purchase)of Temporary Investments, Net                               (25,120,406)            11,670,337
        Proceeds from Sales and Principal Payments of
            Enhanced Yield Investments                                              42,352,467              2,646,241
        Professional Fees                                                              (25,144)                (7,516)
        Insurance Fees                                                                  (3,366)                    --
Net Cash Provided by Operating Activities                                           21,651,797             14,450,599
CASH FLOWS FROM FINANCING ACTIVITIES:
        Cash Distributions to Partners                                             (21,719,699)           (14,524,791)
Net Cash Used in Financing Activities                                              (21,719,699)           (14,524,791)
Net Decrease in Cash                                                                   (67,902)               (74,192)
Cash at the Beginning of the Period                                                     91,206                 74,501
Cash at the End of the Period                                                     $     23,304           $        309
                                                                                  ============           ============


                            RECONCILIATION OF NET DECREASE IN NET ASSETS RESULTING FROM
                              OPERATIONS TO NET CASH PROVIDED BY OPERATING ACTIVITIES

Net Decrease In Net Assets Resulting From Operations                              $ (2,722,867)          $ (3,324,964)

Adjustments to Reconcile Net Decrease in Net Assets
        Resulting from Operations to Net Cash Provided by Operating
        Activities:
(Increase) Decrease in Investments                                                  (3,234,722)            12,128,842
Decrease (Increase) in Accrued Interest                                              3,433,532               (349,238)
Increase in Other Accrued Liabilities                                                  200,000                 11,756
Decrease in Fund Administration Expenses Payable                                       (13,200)               (13,524)
(Increase) Decrease in Prepaid Expenses                                                 (3,367)                 5,256
Net Change in Unrealized Depreciation on Investments                                24,011,536              5,988,997
Decrease in Independent General
   Partners' Fees Payable                                                               (8,971)                (3,526)
(Decrease) Increase in Professional Fees Payable                                       (10,144)                 7,000
        Total Adjustments                                                           24,374,664             17,775,563
Net Cash Provided by Operating Activities                                         $ 21,651,797           $ 14,450,599
                                                                                  ============           ============


               See the Accompanying Notes to Financial Statements.
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                        EQUITABLE CAPITAL PARTNERS, L.P.
                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                                   (UNAUDITED)

<S>                                                      <C>       <C>                <C>               <C>
                                                                         Managing        Limited
                                                           Notes     General Partner     Partners            Total
                                                           -----     -------------    -------------    -------------

FOR THE THREE MONTHS ENDED MARCH 31, 1997

Partners' Capital at January 1, 1997                                  $   1,550,892    $ 109,157,282    $ 110,708,174
Cash Distributions to Partners                                               (9,572)     (21,710,127)     (21,719,699)
Reduction in Managing General Partners' Contribution           3            (67,179)              --          (67,179)
Allocation of Net Investment Income                           11              8,219          813,667          821,886
Allocation of Net Unrealized Depreciation
   on Investments                                             12           (240,115)     (23,771,421)     (24,011,536)
Allocation of Net Realized Gains on Investments                             204,668       20,262,115       20,466,783
Partners' Capital at March 31, 1997                                   $   1,446,913    $  84,751,516    $  86,198,429
                                                                      =============    =============    =============

               See the Accompanying Notes to Financial Statements.
</TABLE>



<PAGE>
<TABLE>
<CAPTION>
                        EQUITABLE CAPITAL PARTNERS, L.P.
                        SCHEDULE OF PORTFOLIO INVESTMENTS
                                MARCH 31, 1997
                                  (UNAUDITED)
<S>                <C>                                        <C>           <C>            <C>           <C>           <C>


   PRINCIPAL                                                      INVESTMENT     INVESTMENT     AMORTIZED     VALUE      % OF TOTAL
 AMOUNT/SHARES                  INVESTMENT                            DATE          COST          COST       (NOTE 2)    INVESTMENTS
---------------  --------------------------------------------     -----------    ----------    ----------    ---------   -----------

                    ENHANCED YIELD INVESTMENTS
                    MANAGED COMPANIES

                    MISCELLANEOUS MANUFACTURING

                    QUANTEGY ACQUISITION CORP.
                    (FORMERLY AMPEX RECORDING MEDIA CORP.)
        162 Shares  Quantegy Acquisition Corp., Common Stock          11/13/95  $  3,464,732    $3,464,732   $ 3,464,732
                                                                                ------------    ----------   -----------
                                                                                   3,464,732     3,464,732     3,464,732       4.10%
                                                                                ------------    ----------   -----------------------

                    RI HOLDINGS, INC.
  $     26,338,272  RI Holdings, Inc.,
                     Sr. Sub. Nts. 16% due 08/31/01*(a)(b)            04/25/94    11,824,318    11,824,318       487,744
     304,934 Shares RI Holdings, Inc., Common Stock**                 09/01/89     3,049,340     3,049,340             0
  212,407.91 Shares RI Holdings, Inc., Common Stock**                  various         2,124         2,124             0
    46,062.5 Shares RI Holdings, Inc., Common Stock**                 04/25/94           461           461             0
  186,879.68 Shares RI Holdings, Inc., Common Stock**                 05/09/95         1,869         1,869             0
  453,189.90 Shares RI Holdings, Inc., Common Stock**                 05/01/96         4,532         4,532             0
                                                                                ------------   -----------   -----------
                                                                                  14,882,644    14,882,644       487,744       0.58
                                                                                ------------   -----------   -----------------------

                    LEATHER AND LEATHER PRODUCTS

                    LEATHER U.S., INC. - NOTE 12
                    (FORMERLY UNITED STATES LEATHER HOLDINGS, INC.)
      795.00 Shares Leather U.S., Inc., Common Stock                  04/09/96     9,342,000     9,342,000     1,400,790
                                                                                ------------   -----------   -----------
                                                                                   9,342,000     9,342,000     1,400,790       1.66
                                                                                ------------   -----------   -----------------------

                    MISCELLANEOUS RETAIL

                    R&S/STRAUSS, INC.
                    (FORMERLY WSR ACQUISITION CORPORATION)
  $      1,815,000  R&S/Strauss, Inc., Sr. Sub. Nt. 15% due 05/31/00* 06/13/90     1,815,000     1,815,000     1,815,000
  $      2,310,000  R&S/Strauss, Inc., Sr. Sub. Nt. 15% due 05/31/00* 06/13/90     2,310,000     2,310,000     2,310,000
                                                                                 -----------  ------------   -----------
                                                                                   4,125,000     4,125,000     4,125,000       4.88
                                                                                 -----------  ------------   -----------------------




                    TOTAL INVESTMENT IN  MANAGED  COMPANIES                     $ 31,814,376  $ 31,814,376   $ 9,478,266      11.22%
                    ---------------------------------------                     ------------  ------------   -----------------------

</TABLE>
                             See the Accompanying Notes to Financial Statements.


<PAGE>
<TABLE>
<CAPTION>
                                              EQUITABLE CAPITAL PARTNERS, L.P.
                                             SCHEDULE OF PORTFOLIO INVESTMENTS
                                                      MARCH 31, 1997
                                                 (CONTINUED)(UNAUDITED)
<S>               <C>                                                  <C>            <C>            <C>         <C>           <C>

  PRINCIPAL                                                           INVESTMENT    INVESTMENT    AMORTIZED    VALUE     % OF TOTAL
 AMOUNT/SHARES                       INVESTMENT                         DATE           COST         COST      (NOTE 2)   INVESTMENTS
---------------  ---------------------------------------------------- ------------ --------------- ----------- --------- -----------

                    NON-MANAGED COMPANIES

                    CONSUMER PRODUCTS MANUFACTURING

                    LEXMARK INTERNATIONAL GROUP, INC. - NOTES 10,12
     521,616 Shares Lexmark International Group, Inc.,
                     Class B Common Stock (c)                         03/27/91   $ 3,477,416   $  3,477,416  $  12,649,190
                                                                                 -----------   ------------  -------------
                                                                                   3,477,416      3,477,416     12,649,190    14.97%
                                                                                 -----------   ------------  -----------------------

                    DISTRIBUTION SERVICES

                    WESTERN PIONEER, INC.
  $      9,460,000  Western Pioneer, Inc.,
                      Sr. Sub. Nts. 10% due 11/30/07*(b)              11/30/94     1,219,460     1,219,460      4,730,000
   162,161 Warrants Western Pioneer, Inc.,
                     Common Stock Purchase Warrants **                11/30/94             0             0              0
                                                                                 -----------  ------------   ------------
                                                                                   1,219,460     1,219,460      4,730,000      5.60
                                                                                 -----------  ------------   ----------------------

                    HEALTH SERVICES

                    MTI HOLDINGS, INC. 
  $        220,102  MTI Holdings, Inc.,
                     Sr. Sec. Nt. 12% due 07/01/03*                   08/06/96       220,102       220,102        220,102
   15,772 Shares    MTI Holdings, Inc., Common Stock**                08/06/96       236,580       236,580        236,580
    4,397 Warrants  MTI Holdings, Inc., Common Stock
                     Purchase Warrants                                08/06/96             0             0              0 
                                                                                   ---------    ----------     ----------
                                                                                     456,682       456,682        456,682      0.54
                                                                                   ---------    ----------     --------------------

                    MISCELLANEOUS RETAIL

                    PERGAMENT HOME CENTERS, INC.- NOTES 10, 12
  $      3,236,800  Pergament Acq. Corp., Home Centers, Inc.
                     Floating Rate Demand Note due 07/31/00* (b)      10/18/91     3,105,242     3,105,242      1,618,400
     380.80 Shares  Pergament Holding, Corp., Common Stock Class B ** 02/28/89     8,568,000     8,568,000              0
    139.0545 Shares Pergament Holding, Corp., Common Stock Class C ** 02/28/89             0             0              0
                                                                                 -----------   -----------    -----------
                                                                                  11,673,242    11,673,242      1,618,400      1.92
                                                                                 -----------   -----------    ---------------------

                    BANKING AND FINANCE

                    BANK UNITED CORP. - NOTES 10,12
                    (FORMERLY USAT HOLDINGS INC.)
      98,365 Shares Bank United Corp., Class A Common Stock (c)      01/05/90        659,991       659,991      2,901,768
                                                                                 -----------   -----------    -----------
                                                                                     659,991       659,991      2,901,768      3.43
                                                                                 -----------   -----------    ---------------------


                    TOTAL INVESTMENT IN NON-MANAGED  COMPANIES                   $17,486,791   $17,486,791    $22,356,040     26.46%
                    ------------------------------------------                   -----------   -----------    ---------------------


                    TOTAL INVESTMENT IN ENHANCED YIELD INVESTMENTS               $49,301,167   $49,301,167    $31,834,306     37.68%
                    ----------------------------------------------               -----------   -----------    ---------------------


</TABLE>

                             See the Accompanying Notes to Financial Statements.


<PAGE>
<TABLE>
<CAPTION>
                                               EQUITABLE CAPITAL PARTNERS, L.P.
                                              SCHEDULE OF PORTFOLIO INVESTMENTS
                                                      MARCH 31, 1997
                                                   (CONCLUDED)(UNAUDITED)
<S>             <C>                                                 <C>           <C>          <C>         <C>            <C>
   PRINCIPAL                                                        INVESTMENT    INVESTMENT    AMORTIZED     VALUE     % OF TOTAL
 AMOUNT/SHARES                        INVESTMENT                       DATE          COST          COST      (NOTE 2)   INVESTMENTS
--------------  -------------------------------------------------- ------------ --------------- ---------- ---------- --------------

                   TEMPORARY INVESTMENTS

                   COMMERCIAL PAPER

$      7,500,000   Dakota Funding Inc., 5.33% due 4/07/97            02/11/97   $   7,438,927  $  7,493,338   $  7,493,338
$        900,000   ASCC Commercial Paper, 5.40% due 4/16/97          03/19/97         896,220       897,975        897,975
$      4,400,000   Three River Funding, 5.53% due 4/17/97            03/24/97       4,383,779     4,389,186      4,389,186
$      3,500,000   Clipper Receivables, 5.58% due 4/22/97            03/25/97       3,484,810     3,488,607      3,488,607
$      3,500,000   Sheffield Receivables Corp., 5.57% due 4/25/97    03/25/97       3,483,213     3,487,003      3,487,003
$      3,500,000   Eureka Corp., 5.56% due 5/13/97                   03/25/97       3,473,513     3,477,297      3,477,297
$      3,500,000   Old Line Funding, 5.62% due 4/21/97               03/25/97       3,485,248     3,489,072      3,489,072  
$      3,500,000   Barton Capital Corp., 5.57% due 5/07/97           03/25/97       3,476,714     3,480,505      3,480,505
$      3,500,000   Windmill Funding Corp., 5.58% due 5/01/97         03/25/97       3,479,927     3,483,725      3,483,725
$      3,500,000   Triple A Funding, 5.70% due 4/10/97               03/25/97       3,491,133     3,495,013      3,495,013
$      1,500,000   Delaware Funding Corp., 5.60% due 4/30/97         03/25/97       1,491,600     1,493,233      1,493,233
$      3,500,000   Ranger Funding Corp., 5.65% due 4/07/97           03/25/97       3,492,859     3,496,704      3,496,704
$      3,576,000   Thames Global Asset Funding, 5.80% due 4/15/97    03/26/97       3,564,477     3,567,934      3,567,934
$      2,400,000   Delaware Funding Corp., 5.75% due 4/22/97         03/31/97       2,391,567     2,391,950      2,391,950
$      2,341,000   Alamo Funding, 5.65% due 5/13/97                  03/31/97       2,325,202     2,325,569      2,325,569
$      2,200,000   PHH Group, 5.62% due 5/05/97                      03/31/97       2,187,979     2,188,323      2,188,323     
                                                                                -------------  ------------   ------------
                   TOTAL INVESTMENT IN COMMERCIAL PAPER                         $  52,547,168  $ 52,645,434   $ 52,645,434    62.32%
                                                                                -------------  ------------   ---------------------


                   TOTAL TEMPORARY INVESTMENTS                                  $  52,547,168  $ 52,645,434   $ 52,645,434    62.32%
                                                                                -------------  ------------   ---------------------

                   TOTAL INVESTMENT PORTFOLIO                                   $ 101,848,335  $101,946,601   $ 84,479,740   100.00%
                                                                                =============  ============   =====================
 

                   SUMMARY OF INVESTMENTS
                   Subordinated Notes                                           $  20,494,122  $ 20,494,122   $ 11,181,246    13.24%
                   Common Stock and Warrants                                       28,807,045    28,807,045     20,653,060    24.44
                   Temporary Investments                                           52,547,168    52,645,434     52,645,434    62.32
                                                                                -------------  ------------   ---------------------
                                                                                $ 101,848,335  $101,946,601   $ 84,479,740   100.00%
                                                                                =============  ============   =====================

                   *  Restricted Security
                  **  Restricted Non-income Producing Security
                  (a) Includes receipt of payment-in-kind securities.
                  (b) Non-accrual investment status.
                  (c) Publicly traded class of securities.

</TABLE>
                             See the Accompanying Notes to Financial Statements.

<PAGE>
<TABLE>
<CAPTION>
                                        EQUITABLE CAPITAL PARTNERS, L.P.
                              SUPPLEMENTAL SCHEDULE OF REALIZED GAINS AND LOSSES
                                    FOR THE THREE MONTHS ENDED MARCH 31, 1997
                                                   (UNAUDITED)

<S>                                               <C>              <C>              <C>            <C>                 <C>
                                                                    PAR VALUE OR                     
                                                      DATE OF         NUMBER OF      AMORTIZED          NET            REALIZED
SECURITY                                            TRANSACTION         SHARES          COST          PROCEEDS        GAIN (LOSS)

Polaris Pool Systems, Inc. 
   Common Stock
                                                      1/15/97                 --      $      --    $     1,100 (A)  $     1,100
Lexmark International Group,  Inc. 
   Class B Common Stock                               various             30,002        200,014        772,125          572,111

Bank United Corp. 
   Class A Common Stock                               various            779,543      5,230,428     21,811,613       16,581,185

Lexmark International, Inc. 
   14.25% Sr. Sub. Note                               3/24/97        $19,667,348     19,667,348     22,979,735        3,312,387

Total Net Realized Gains for the
   Three Months Ended March 31, 1997                                                $25,097,790    $45,564,573      $20,466,783
                                                                                    ===========    ===========      ===========



(A) Proceeds represent a distribution to the Fund from the escrow account.

</TABLE>

               See the Accompanying Notes to Financial Statements.

<PAGE>

                        EQUITABLE CAPITAL PARTNERS, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1997
                                   (UNAUDITED)

1.  Organization and Purpose

    Equitable  Capital  Partners,  L.P.  (the  "Fund")  was  formed  along  with
Equitable Capital Partners  (Retirement  Fund), L.P. (the "Retirement Fund," and
collectively  with the Fund referred to as the "Funds") and the  Certificates of
Limited  Partnership  were filed  under the  Delaware  Revised  Uniform  Limited
Partnership Act on February 2, 1988. The Funds' operations  commenced on October
13, 1988.

    On July 22,  1993,  Equitable  Capital  Management  Corporation  ("Equitable
Capital"),  formerly the Managing General Partner and investment  adviser of the
Funds,  transferred   substantially  all  of  the  assets  comprising  Equitable
Capital's business to Alliance Capital Management L.P. ("Alliance  Capital") and
its  wholly-owned  subsidiary,  Alliance  Corporate  Finance Group  Incorporated
("Alliance  Corporate").  In  connection  with  such  transaction,  the  limited
partners,  (the  "Limited  Partners")  of  the  Funds  voted  to  approve  a new
investment  advisory agreement between the Funds and Alliance Corporate and also
voted to admit Alliance  Corporate as Managing  General  Partner of the Funds to
succeed Equitable  Capital.  Accordingly,  on July 22, 1993, the closing date of
the  transaction  described  above,  (i) Alliance  Corporate was admitted as the
successor  Managing General Partner of the Funds (ii) Equitable Capital withdrew
from the Funds as Managing  General  Partner and assigned all of its interest as
General  Partner to Alliance  Corporate and (iii) Alliance  Corporate  succeeded
Equitable  Capital  as the  investment  adviser to the Funds  pursuant  to a new
investment advisory agreement.  Alliance Corporate (the "Investment Adviser") is
a registered investment adviser under the Investment Advisers Act of 1940.

    Prior to July 22, 1993,  Equitable  Capital was responsible,  subject to the
supervision of the independent  general partners of the Funds (the  "Independent
General Partners"), for the management of the Fund's investments. As of July 22,
1993,  Alliance  Corporate  assumed  such  responsibilities  in its  capacity as
Managing General Partner and Investment Adviser of the Funds.

    The Funds have elected to operate as business  development  companies  under
the  Investment  Company Act of 1940, as amended.  The Funds seek current income
and capital appreciation potential through investments in  privately-structured,
friendly leveraged acquisitions and other leveraged transactions. The Funds have
pursued this objective by investing  primarily in subordinated  debt and related
equity securities  ("Enhanced Yield Investments") issued in conjunction with the
"mezzanine   financing"  of  friendly   leveraged   acquisitions  and  leveraged
recapitalizations.

    As stated in the Partnership  Agreement,  the Fund will terminate on October
13, 1998, subject to the right of the Independent General Partners to extend the
term of the Fund for up to two additional one year periods, after which the Fund
will liquidate any remaining investments within five years.

2.  Significant Accounting Policies

    Basis of Accounting

    For financial  reporting  purposes,  the Fund's records are maintained using
the accrual method of accounting.


<PAGE>


    Valuation of Investments

     Securities  are valued at market or fair  value.  Market  value is used for
securities  for which market  quotations are readily  available.  For securities
without a readily  ascertainable  market value,  fair value is determined,  on a
quarterly  basis,  in good faith by the General  Partners of the Fund. The total
value of securities without a readily  ascertainable market value is $16,283,348
and  $44,569,548  as of March 31,  1997 and  December  31,  1996,  respectively,
representing 18.8% and 40.2% of total assets,  respectively.  In connection with
such  determination,  the Managing  General  Partner has established a valuation
committee comprised of senior executives to assess the Fund's portfolio and make
recommendations  regarding the value of the Fund's  portfolio  securities.  This
valuation committee uses available market information and appropriate  valuation
methodologies.  In addition, the Managing General Partner has retained Arthur D.
Little,  Inc., a nationally  recognized  independent  valuation  consultant,  to
review such valuations.

    For privately  issued  securities in which the Fund typically  invests,  the
fair value of an investment is its initial cost,  adjusted for  amortization  of
discount or premium and as  subsequently  adjusted to reflect the  occurrence of
significant developments.  "Significant developments" are business,  economic or
market events that may affect a company in which an investment  has been made or
the securities comprising such investment. For example, significant developments
that could result in a writedown in value include, among other things, events of
default with respect to payment  obligations  or other  developments  indicating
that a portfolio  company's  performance may fall short of acceptable  levels. A
writeup in value of an investment could take place when a significant  favorable
development  occurs,  such as a transaction  representing the partial sale of an
investment that would result in a capital gain, or company performance exceeding
expected levels on a sustained  basis.  Although the General  Partners use their
best  judgment in  determining  the fair value of these  investments,  there are
inherent limitations in any valuation technique involving securities of the type
in which the Fund invests.  Therefore,  the fair values  resented herein are not
necessarily  indicative  of the amount which the Fund could realize in a current
transaction.

    Temporary  Investments  with  maturities  of 60 days or less are  valued  at
amortized cost, which  approximates  market value.  Temporary  Investments which
mature in more than 60 days, for which market quotations are readily  available,
are valued at the most recent bid price or the equivalent  quoted yield obtained
from one or more of the market makers.

    Interest Receivable on Investments

    Investments will generally be placed on non-accrual status in the event of a
default  (after  applicable  grace period  expires) or if the  Managing  General
Partner  determines  that  there  is no  reasonable  expectation  of  collecting
interest.

    Payment-In-Kind Securities

    All  payment-in-kind  securities  received in lieu of cash interest payments
from the Fund's  portfolio  companies  are  recorded at face  value,  unless the
Managing General Partner  determines that there is no reasonable  expectation of
collecting the full principal amounts of such securities.



<PAGE>


    Income Taxes

     As discussed in Note 13, no provision  for income taxes has been made since
all income and losses are  allocated  to the Fund's  partners  ("Partners")  for
inclusion in their respective tax returns.

    Investment Transactions

    Enhanced Yield  Investments - The Fund records  transactions  on the date on
which it  obtains  an  enforceable  right to demand  the  securities  or payment
thereof.

    Temporary Investments - The Fund records transactions on the trade date.

    Realized  gains and losses on  investments  are  determined  on the basis of
specific identification for accounting and tax purposes.

    Sales, Marketing and Offering Expenses and Sales Commissions

    Sales  commissions and selling discounts have been allocated to the specific
Partners' accounts to which they are applicable.  Sales,  marketing and offering
expenses are  allocated  between the Funds in  proportion to the number of units
issued  by  each  Fund  and to the  Partners  in  proportion  to  their  capital
contributions.

3.  Note Receivable

    On July 22, 1993,  pursuant to the terms of the Fund's  Amended and Restated
Agreement of Limited Partnership,  Alliance Corporate, as the successor Managing
General Partner of the Fund, has contributed a non-interest  bearing  promissory
note  (the  "Note")  to the Fund in an  aggregate  amount  equal to 1.01% of the
aggregate Net Capital  Contributions of all Limited Partners (less distributions
representing  returns of capital).  Net Capital  Contributions  are comprised of
gross  offering  proceeds,  after giving effect to volume  discounts  (and after
netting of sales  commissions,  organization,  offering and sales and  marketing
expenses),  less  returns  of  capital  distributed  to  Limited  Partners.  The
principal amount of the Note is reduced  proportionally as such Limited Partners
receive   distributions   representing   additional  returns  of  capital.  Such
distributions  received for the three months ended March 31, 1997  resulted in a
$67,179  reduction of the principal  amount of the Note. The promissory  note of
Equitable  Capital was cancelled upon the  contribution of Alliance  Corporate's
note.

4.  Capital Contributions

    On October 13,  1988,  the Fund closed the  initial  public  offering of its
units of Limited Partner  interests  ("Units").  Equitable  Capital,  the Fund's
Managing General Partner at that time, accepted  subscriptions for 284,611 Units
and admitted 18,288 Limited Partners.

    The Limited Partners' total capital  contributions were $283,873,400,  after
giving  effect to volume  discounts  allowed of  $737,600.  Equitable  Capital's
aggregate  capital  contribution  was in the  form of a  promissory  note in the
principal amount of $2,641,469.  On July 22, 1993,  Equitable Capital's note was
cancelled and Alliance Corporate,  as successor Managing General Partner, made a
capital contribution in the form of a promissory note on such date, as described
in Note 3. Sales,  marketing and offering expenses and selling  commissions have
been charged against  proceeds  resulting in net capital  contributed by Limited
Partners of $261,531,542.

    Allocation of income,  loss and distributions of cash are made in accordance
with the Partnership Agreement as further discussed in Note 11.
<PAGE>

5.  Sales, Marketing and Offering Expenses and Sales Commissions

    The Fund  expended a total of $535,631  for the  reimbursement  of sales and
marketing expenses.  Aggregate sales and marketing expenses of the Funds may not
exceed  $2,528,415  or 0.5% of the  aggregate  capital  contributions  and  were
allocated  proportionately to the number of Units issued by each Fund. Aggregate
sales and marketing expenses for the Funds totalled $951,683.

    The Fund also paid $2,098,311 for the  reimbursement  of offering  expenses.
These expenses,  along with the offering expenses of the Retirement Fund and the
organizational  expenses  of the  Funds,  may not exceed  $6,000,000.  Aggregate
offering and  organizational  expenses for the Funds  totalled  $4,711,806.

    For their  services as selling  agent,  the Fund paid sales  commissions  to
Merrill Lynch, Pierce, Fenner & Smith Incorporated in the amount of $19,185,170,
of which Equico Securities  Corporation,  an affiliate of Equitable  Capital,  a
related party, received $317,150 as a selected dealer.

6.  Investment Advisory Fee

     As of July 22,  1993,  Alliance  Corporate  has been  receiving a quarterly
Investment  Advisory  Fee,  at the annual  rate of 1.0% of the Fund's  Available
Capital, with a minimum annual payment of $2,000,000 collectively for the Funds,
less 80% of commitment,  transaction, investment banking and "break-up" or other
fees related to the Fund's investments (the "Minimum Amount"). Available Capital
is defined as the sum of the aggregate Net Capital Contributions of the Partners
less the  cumulative  amount of returns of capital  distributed  to Partners and
realized losses from investments.  

     As stated in the Partnership  Agreement,  the Fund's allocable share of the
Minimum Amount is $1,125,650, or $281,413 per quarter.  Investment Advisory Fees
at March 31, 1997,  reflect an adjustment for the difference between the Minimum
Amount  due to the  Investment  Advisor  and what was paid for  quarters  ending
December 31, 1996 and March 31, 1997.

     The Investment  Advisory Fee is paid  quarterly in advance.  The Investment
Advisory Fees incurred by the Fund for the three months ended March 31, 1997 and
1996 were $369,616 and $326,213, respectively.

7.  Fund Administration Fee and Expenses

     As compensation  for its services during the fourth through seventh year of
operation of the Funds,  ML Fund  Administrators,  Inc.  ("MLFAI"),  as the Fund
administrator,  is entitled to receive from the Funds an annual  amount equal to
the  greater  of the (i)  Minimum  Fee and (ii) the Funds'  prorated  proportion
(based on the number of Units issued by the Funds) of 0.45% of the excess of the
aggregate net offering proceeds of the Units issued by the Funds over 50% of the
aggregate  amount  of  capital  reductions  of the Funds  (subject  to an annual
maximum of $3.2 million). The Minimum Fee is 1.0% of the gross offering price of
Units in the Funds, but not greater than $500,000.  The Fund  Administration Fee
is calculated and paid quarterly in advance.  The Fund  Administration Fees paid
by the Fund for the three  months ended March 31, 1997 and 1996 were $75,000 and
$218,358, respectively.


<PAGE>


    In addition  to the Fund  Administration  Fee,  MLFAI is entitled to receive
reimbursement  for a  portion  of  direct  out-of-pocket  expenses  incurred  in
connection with the administration of the Retirement Fund, commencing on October
13, 1992.  For the three months ended March 31, 1997 and 1996, the Fund incurred
Administrative  Expenses of $42,263 and $20,548,  respectively,  which consisted
primarily of printing,  audit and tax return preparation and custodian fees paid
for by MLFAI on behalf of the Fund.

8.  Independent General Partners' Fees and Expenses

    As compensation  for their  services,  each  Independent  General Partner is
entitled to a $30,000 annual fee (payable  quarterly)  from the Fund in addition
to $500  for each  meeting  attended  and  reimbursement  for any  out-of-pocket
expenses. In accordance with the Fund's Partnership Agreement, the amount of the
annual fee is reviewed annually by the Independent General Partners.

     For the three  months  ended  March 31,  1997 and 1996,  the Fund  incurred
$35,000 and $48,684,  respectively,  of Independent  General  Partners' Fees and
Expenses.

9.  Related Party Transactions

     For the three months ended March 31, 1997 and 1996,  the Fund paid expenses
of $14,691 and $8,270, respectively, as reimbursement for amounts paid for legal
services provided by Equitable Life in connection with the Fund's Enhanced Yield
Investments.  The Fund is paying Alliance  Corporate an Investment  Advisory Fee
for its  services  as  described  in Note 6.  Additionally,  the Fund paid sales
commissions to Equico Securities, a related party, as described in Note 5.

10. Investment Transactions

    The Fund is invested primarily in Enhanced Yield Investments,  also known in
the securities industry as "high yield securities".  The securities in which the
Fund has invested were issued in  conjunction  with the  mezzanine  financing of
privately  structured,  friendly leveraged  acquisitions,  recapitalizations and
other   leveraged   financings,   and  are  generally   linked  with  an  equity
participation.   Enhanced  Yield  Investments  are  debt  and  preferred  equity
securities that are unrated or are rated by Standard & Poor's  Corporation as BB
or lower and by Moody's  Investor  Services,  Inc. as Ba or lower.  Risk of loss
upon  default  by the  issuer  is  significantly  greater  with  Enhanced  Yield
Investments  than  with  investment  grade  securities  because  Enhanced  Yield
Investments  are  generally  unsecured  and  are  often  subordinated  to  other
creditors  of the  issuer.  Also,  these  issuers  usually  have high  levels of
indebtedness  and are more sensitive to adverse economic  conditions,  such as a
recession or increasing  interest rates, than investment grade issuers.  Most of
these  securities are subject to resale  restrictions  and generally there is no
quoted market for such securities.

    Although the Fund cannot eliminate its risks  associated with  participation
in Enhanced Yield Investments,  it has established risk management policies. The
Fund subjected each prospective  investment to rigorous analysis,  and will make
only  those  investments  that have been  recommended  by the  Managing  General
Partner and that meet the Fund's  investment  guidelines or that have  otherwise
been approved by the Independent General Partners. Fund investments are measured
against  specified Fund  investment  and  performance  guidelines.  To limit the
exposure of the Fund's capital in any single issuer,  the Fund limits the amount
of its investment in a particular  issuer.  The Fund also  continually  monitors
portfolio companies in order to minimize the risks associated with participation
in Enhanced Yield Investments.

     On January 2, 1997, the Fund received  $65,194 from Pergament Home Centers,
Inc. as a principal  paydown of the Floating  Rate Demand Note held by the Fund.
No gain,  loss or income has been  recorded on this  transaction.

     On January 15, 1997, the Fund received  additional  proceeds of $1,100 from
Polaris Pool Systems,  Inc. The money  represents  proceeds from the sale of the
investments  from  prior  years  that  have  been  held  in  escrow  for  future
adjustments and expenses not paid on the sale dates. 

<PAGE>
     During the first  quarter of 1997,  the Fund sold 30,002  shares of Lexmark
International  Group, Inc. Class B Common Stock for $772,125 resulting in a gain
of $572,111 to the Fund.

     In February 1997, the Fund sold 779,543 shares of Bank United Corp. Class A
Common Stock for $21,811,613 resulting in a gain of $16,581,185 to the Fund.

     On March 24, 1997, the Fund received a prepayment of Lexmark International,
Inc.'s 14.25% Senior Subordinated Notes  outstanding, in the principle amount of
$19,667,348  together with a prepayment  penalty of  $3,312,387  and $646,154 of
accrued interest. The transaction resulted in a gain of $3,312,387 to the Fund.

     All of the  proceeds  received  during  the first  quarter  of 1997 will be
distributed to Limited Partners of record as of March 31, 1997 on May 14, 1997.

     As of March 31, 1997, the Fund had  investments  in 4 Managed  Companies (a
Managed Company is one to which the Fund, the Managing  General Partner or other
persons in the Fund's  investor  group make  significant  managerial  assistance
available) and 5 Non-Managed  Companies (a  Non-Managed  Company is one to which
such  assistance  is not  provided)  totaling  $49,301,167  (including  $854,000
capitalized cost of  payment-in-kind  securities),  consisting of $20,494,122 in
senior notes and subordinated notes and $28,807,045 in common stock and purchase
warrants.

11. Allocation of Profits and Losses

    Pursuant to the terms of the Partnership  Agreement,  net investment  income
and gains and losses on investments are generally allocated between the Managing
General  Partner  and the  Limited  Partners  based upon cash  distributions  as
follows:

    first,  99% to the Limited  Partners and 1% to the Managing  General Partner
    until the Limited Partners have received a cumulative priority return of 10%
    non-compounded  on an annual basis on their  investments  in Enhanced  Yield
    Investments;

    second,  70% to the Limited Partners and 30% to the Managing General Partner
    until the Managing General Partner has received 20% of all current and prior
    distributions on such investments;

    and thereafter, 80% to the Limited Partners and 20% to the Managing
    General Partner.

    For the three months ended March 31, 1997,  earnings  were  allocated 99% to
the Limited Partners, as a class, and 1% to the Managing General Partner.

12. Unrealized Appreciation/Depreciation and Non-Accrual of Investments

     For the three months ended March 31, 1997, the Fund recorded net unrealized
depreciation on Enhanced Yield Investments of $24,011,536 compared to $5,988,997
for the three months ended March 31, 1996. Such  depreciation  was the result of
adjustments in value made with respect to the following  investments  during the
three months ended March 31, 1997:

     The amount includes the reversal of $13,293,616 of unrealized  appreciation
of Bank United Corp.  Class A Common Stock, due to the sale of 779,543 shares in
February  1997.  Due to an  increase in the quoted  market  price of Bank United
Corp.  Class A Common  Stock and the equity  being valued at 100% of the closing
market  price as  compared  to 90% at  December  31,  1996,  the  Fund  recorded
unrealized appreciation of $290,177 at March 31, 1997.

     Due to the sale of 30,002 shares of Lexmark International Group, Inc. Class
B Common Stock in January  1997,  the Fund  reversed  $2,389,245  of  unrealized
appreciation.

     On March 31, 1997,  Leather U.S.,  Inc.  common stock was written down from
100%  to  15%  of  remaining  cost,  resulting  in  unrealized  depreciation  of
$7,941,210 to the Fund.

     On March 31, 1997,  Pergament Home Centers,  Inc. Floating Rate Demand Note
was written down from 75% to 50% of par, resulting in unrealized depreciation of
$677,642 to the Fund.
<PAGE>
    The  following  investments  have  been  on  non-accrual  status  as of  the
respective dates:

    Pergament Home Centers, Inc.
      Floating Rate Demand Note              July 1, 1996
    Western Pioneer, Inc. 10%
      Senior Subordinated Note               November 30, 1994
    RI Holdings, Inc. 16%
      Senior Subordinated Notes              April 25, 1994

    Alliance Corporate  continues to monitor the Fund's portfolio closely.  As a
matter  of  standard  procedure,   Alliance  Corporate  reviews  each  portfolio
company's financial statements at least quarterly, and often monthly. Investment
managers  routinely review and discuss  financial and operating results with the
companies'  management  and  equity  sponsors,  and  attend  periodic  board  of
directors meetings, as appropriate.  In some cases, Alliance Corporate officers,
acting on behalf of the Fund,  serve as  directors  on the  boards of  portfolio
companies. When problems arise, communication with management and sponsors often
occurs on a daily basis.

13. Income Taxes

    No provision  for income taxes has been made since all income and losses are
allocated to the Fund's partners for inclusion in their respective tax returns.

    Pursuant to Statement of Financial Accounting Standards No. 109 - Accounting
for Income Taxes,  the Fund is required to disclose any  difference  between the
tax bases of the Fund's assets and  liabilities  versus the amounts  reported in
the  Financial  Statements.  Generally,  the  tax  bases  of the  Fund's  assets
approximate  the amortized  cost amounts  reported in the Financial  Statements.
This amount is computed  annually and as of December 31, 1996,  the tax basis of
the  Fund's  assets was  greater  than the  amounts  reported  in the  Financial
Statements  by  $30,331,565.   This  difference  is  primarily  attributable  to
unrealized  depreciation  on investments  which has not been  recognized for tax
purposes. Additionally,  certain realized gains and losses due to restructurings
were treated differently for tax purposes than for financial reporting purposes.

14. Subsequent Events

     On May 8, 1997, the Independent General Partners approved an aggregate cash
distribution of $45,627,679 for the three months ended March 31, 1997, which was
paid on May 14, 1997. The amount distributed to Limited Partners was $45,623,143
or $160.30 per Unit (of which  $24,912,001 is capital  returned from investments
during the first  quarter of 1997),  to Limited  Partners of record at March 31,
1997. On a per Unit basis, this distribution to Limited Partners includes $71.19
of  realized  gains,  $1.58 of income  from  operations  and $87.53 of return of
capital.  The Managing General Partner's one percent  allocation of $460,840 was
reduced by its one percent  allocation  of realized  gains and capital  returned
from  investments  during the first quarter of 1997, of $456,304 (which is being
held as a Deferred  Distribution Amount pursuant to the Partnership  Agreement),
resulting in a net distribution of $4,536.


<PAGE>
Item 2. Management's Discussion and Analysis
        of Financial Condition and Results of Operations

Liquidity and Capital Resources

Net Proceeds of Offering

    On October 13,  1988,  the Fund  completed  the initial  public  offering of
Units,  admitting 18,288 Limited  Partners who purchased  284,611 Units. The net
proceeds  available  for  investment  by  the  Fund  after  such  offering  were
$261,499,657  after volume  discounts,  sales  commissions  and  organizational,
offering, sales and marketing expenses.

Investments

     As of March 31, 1997, the Fund had a total of 9 Enhanced Yield  Investments
at a net cost of  $49,301,167  (inclusive of the receipt of securities  having a
capitalized  cost of $854,000  received as  payment-in-kind  interest on certain
Enhanced Yield Investments).

Proceeds from Investments

    During the three  months ended March 31, 1997,  the Fund  received  proceeds
from the following investments:

     On January 2, 1997, the Fund received  $65,194 from Pergament Home Centers,
Inc. as a principal  paydown of the Floating  Rate Demand Note held by the Fund.
No gain,  loss or income has been  recorded on this  transaction.

     On January 15, 1997, the Fund received  additional  proceeds of $1,100 from
Polaris Pool Systems,  Inc. The money  represents  proceeds from the sale of the
investments  from  prior  years  that  have  been  held  in  escrow  for  future
adjustments and expenses not paid on the sale dates.

     During the first  quarter of 1997,  the Fund sold 30,002  shares of Lexmark
International  Group, Inc. Class B Common Stock for $772,125 resulting in a gain
of $572,111 to the Fund.

     In February 1997, the Fund sold 779,543 shares of Bank United Corp. Class A
Common Stock for $21,811,613 resulting in a gain of $16,581,185 to the Fund.

     On March 24, 1997, the Fund received a prepayment of Lexmark International,
Inc.'s 14.25% Senior Subordinated Notes  outstanding, in the principle amount of
$19,667,348  together with a prepayment  penalty of  $3,312,387  and $646,154 of
accrued interest. The transaction resulted in a gain of $3,312,387 to the Fund.
 
     All of the  proceeds  received  during  the first  quarter  of 1997 will be
distributed to Limited Partners of record as of March 31, 1997 on May 14, 1997.

    For additional  information,  refer to the Supplemental Schedule of Realized
Gains and Losses and Note 10 to the Financial Statements.

    The  Fund's  Enhanced  Yield  Investments  are  typically  issued in private
placement  transactions and are subject to certain restrictions on transfer, and
are thus relatively illiquid. The balance of the Fund's assets at the end of the
period covered by this report was invested in Temporary  Investments,  comprised
of commercial paper and time deposits with maturities of less than sixty days.

    All cash dividends, interest and other income received by the Fund in excess
of expenses of operation and reserves for expenses and certain  investments  and
liabilities are distributed to the Limited  Partners of the Fund and to Alliance
Corporate, as the Managing General Partner, within 45 days after the end of each
calendar quarter. Before each quarterly cash distribution, the Fund will analyze
the then current cash  projections  and determine  the amount of any  additional
reserves it deems necessary.
<PAGE>

Participation in Enhanced Yield Investments

    The Fund is invested primarily in Enhanced Yield Investments,  also known in
the securities industry as "high yield securities".  The securities in which the
Fund has invested were issued in  conjunction  with the  mezzanine  financing of
privately  structured,  friendly leveraged  acquisitions,  recapitalizations and
other   leveraged   financings,   and  are  generally   linked  with  an  equity
participation.   Enhanced  Yield  Investments  are  debt  and  preferred  equity
securities that are unrated or are rated by Standard & Poor's  Corporation as BB
or lower and by Moody's  Investor  Services,  Inc. as Ba or lower.  Risk of loss
upon  default  by the  issuer  is  significantly  greater  with  Enhanced  Yield
Investments  than  with  investment  grade  securities  because  Enhanced  Yield
Investments  are  generally  unsecured  and  are  often  subordinated  to  other
creditors  of the  issuer.  Also,  these  issuers  usually  have high  levels of
indebtedness  and are more sensitive to adverse economic  conditions,  such as a
recession or increasing  interest rates, than investment grade issuers.  Most of
these  securities are subject to resale  restrictions  and generally there is no
quoted market for such securities.

    Although the Fund cannot eliminate its risks  associated with  participation
in Enhanced Yield Investments,  it has established risk management policies. The
Fund subjects each prospective  investment to rigorous analysis,  and makes only
those investments that have been recommended by the Managing General Partner and
that meet the Fund's investment  guidelines or that have otherwise been approved
by the Independent General Partners.

    Fund  investments  are  measured  against   specified  Fund  investment  and
performance  guidelines.  To limit the  exposure  of the  Fund's  capital in any
single  issuer,  the Fund limits the amount of its  investment  in a  particular
issuer.  The Fund also  continually  monitors  portfolio  companies  in order to
minimize the risks associated with participation in Enhanced Yield Investments.

Results of Operations

     For the three months ended March 31, 1997, net investment  income increased
by $345,589 as compared  to the same period in 1996.  Net  investment  income is
comprised of investment income  (primarily  interest and dividend income) offset
by  expenses.  The  increase  in the  1997  net  investment  income  versus  the
comparative  period in 1996,  reflects  the  increase in interest  and  dividend
income  partially  offset  by the  decrease  in  Fund  Administration  Fees  and
Expenses.

     For the three months ended March 31, 1997, the Fund had  investment  income
of  $1,362,265  as  compared  to  $1,117,147  for the same  period in 1996.  The
increase in 1997 investment income of 21.9% was primarily due to an increase in
dividend  income.

     The Fund incurred expenses of $540,379 for the three months ended March 31,
1997,  as compared to $640,850 for the same period in 1996.  The decrease in the
1997  expenses  of  $100,471  was  primarily  due  to a  decrease  in  the  Fund
Administration  Fees and Expenses  paid by the Fund.  The Fund's major  expenses
consist  of the  Investment  Advisory  Fee,  the  Fund  Administration  Fees and
Expenses and Independent General Partners' Fees and Expenses.

     The Fund experienced a decrease in net assets resulting from operations for
the three months ended March 31, 1997 in the amount of $2,722,867 as compared to
a decrease of $3,324,964 for the comparative period in 1996. The decrease in net
assets for the three months ended March 31, 1997 is comprised of net  investment
income of $821,886,  net realized gains of $20,466,783 offset by a net change in
unrealized  depreciation of $24,011,536.  For the comparable period in 1996, the
decrease in net assets was comprised of net investment  income of $476,297,  net
realized gains of $2,187,736  offset by a net change in unrealized  depreciation
of $5,988,997 (see Statements of Operations in the Financial Statements).

     For the three  months  ended  March 31,  1997 and 1996,  the Fund  incurred
Investment Advisory Fees of $369,616 and $326,213, respectively (as described in
Note 6 to the Financial  Statements).  The increase in the  Investment  Advisory
Fees is due to an adjustment for the  difference  between the Minimum Amount Due
and the  Investment  Advisory Fee paid for the quarters  ended December 31, 1996
and March 31, 1997.
<PAGE>
     The Fund  Administration  Fees and Expenses (as  described in Note 7 to the
Financial  Statements)  for the three  months ended March 31, 1997 and 1996 were
$117,263 and $238,906,  respectively. The decrease from 1996 to 1997 of $121,643
is due primarily to a decrease in the Fund's Available Capital on which the Fund
Administration  Fee is  based,  resulting  primarily  from  redemptions  of debt
obligations held be the Fund (which is a component of Available Capital).

     In accordance with the Partnership  Agreement,  beginning October 13, 1996,
the Fund Administation Fee was changed to an annual fee of $300,000 plus 100% of
all direct  out-of-pocket  expenses incurred by the Fund Administrator on behalf
of the Fund.

    Independent  General  Partners'  Fees and  Expenses  incurred  for the three
months ended March 31, 1997 and 1996 were $35,000 and $48,684, respectively.

     The Fund  incurred  Professional  Fees of $15,000  and $8,270 for the three
months ended March 31, 1997 and 1996,  respectively.  For the three months ended
March 31, 1997, the Fund incurred $14,691 of related party legal fees. (See Note
9 to the Financial Statements).

Unrealized Appreciation/Depreciation and Non-Accrual of Investments

    The General  Partners of the Fund determine,  on a quarterly basis, the fair
value  of  the  Fund's   portfolio   securities  that  do  not  have  a  readily
ascertainable   market  value.   They  are  assisted  in  connection  with  such
determination by the Managing General Partner, which has established a valuation
committee comprised of senior executives to assess the Fund's portfolio and make
recommendations regarding the value of its portfolio securities.  This valuation
committee  uses  available   market   information  and   appropriate   valuation
methodologies.  In addition, the Managing General Partner has retained Arthur D.
Little,  Inc., a nationally  recognized  independent  valuation  consultant,  to
review such valuations.

    For privately  issued  securities in which the Fund typically  invests,  the
fair value of an investment is its initial cost,  adjusted for  amortization  of
discount or premium and as  subsequently  adjusted to reflect the  occurrence of
significant developments.  "Significant developments" are business,  economic or
market events that may affect a company in which an investment  has been made or
the securities comprising such investment. For example, significant developments
that could result in a writedown in value include, among other things, events of
default with respect to payment  obligations  or other  developments  indicating
that a portfolio  company's  performance may fall short of acceptable  levels. A
writeup in value of an investment could take place when a significant  favorable
development  occurs,  such as a transaction  representing the partial sale of an
investment that would result in a capital gain or company performance  exceeding
expected levels on a sustained basis.

    Although the General  Partners use their best  judgment in  determining  the
fair value of these investments, there are inherent limitations in any valuation
technique involving securities of the type in which the Fund invests. Therefore,
the fair values  presented  herein are not necessarily  indicative of the amount
which the Fund could realize in a current transaction.

     For the three months ended March 31, 1997, the Fund recorded net unrealized
depreciation  on  Enhanced  Yield  Investments  of  $24,011,536  as  compared to
$5,988,997  for the three months ended March 31, 1996.  The change in unrealized
depreciation  was  primarily the result of  unrealized  depreciation  in Leather
U.S.,  Inc. and  Pergament  Home  Centers,  Inc. and the reversal of  unrealized
appreciation in Bank United Corp. and Lexmark  International Group, Inc., offset
by unrealized appreciation in Bank United Corp.
<PAGE>
The following  investments have been on non-accrual  status as of the respective
dates:

    Pergament Home Centers, Inc.
      Floating Rate Demand Note              July 1, 1996
    Western Pioneer, Inc. 10%
      Senior Subordinated Note               November 30, 1994
    RI Holdings, Inc. 16%
      Senior Subordinated Notes              April 25, 1994

    Alliance Corporate  continues to monitor the Fund's portfolio closely.  As a
matter  of  standard  procedure,   Alliance  Corporate  reviews  each  portfolio
company's financial statements at least quarterly, and often monthly. Investment
managers  routinely review and discuss  financial and operating results with the
companies'  management  and  equity  sponsors,  and  attend  periodic  board  of
directors meetings, as appropriate.  In some cases, Alliance Corporate officers,
acting on behalf of the Funds,  serve as  directors  on the boards of  portfolio
companies. When problems arise, communication with management and sponsors often
occurs on a daily basis.

Realized Gains and Losses on Investments

     During  the three  months  ended  March 31,  1997,  the Fund  recorded  net
realized  gains of $20,466,783 on  transactions  involving  three Enhanced Yield
Investments.  For the three months ended March 31, 1996,  the Fund  recorded net
realized  gains on  investments  of  $2,187,736  on  transactions  involving two
Enhanced  Yield  Investments  (see Note 10 to the Financial  Statements  and the
Supplemental Schedule of Realized Gains and Losses).
<PAGE>


                           PART II - OTHER INFORMATION

    Items 1 through 4 are  herewith  omitted as the  response to items is either
none or not applicable for the March 31, 1997, Form 10-Q.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits:
         Exhibit 27 - Financial Data Schedule for the quarter ending 
         March 31, 1997.

 3.1     Amended and Restated Certificate of Limited Partnership, dated as
         of April 12, 1989*

 4.1     Amended and Restated Agreement of Limited Partnership, dated as
         of October 13, 1988**

10.1     Investment Advisory Agreement, dated July 22, 1993, between
         Registrant and Alliance Corporate Finance Group Incorporated****

10.2     Administrative Services Agreement, dated October 13, 1988, among
         the Registrant, Equitable Capital Management Corporation and ML
         Fund Administrators, Inc.**

10.3     Credit Agreement dated as of June 27, 1989, between Equitable
         Capital Partners, L.P. and Wells Fargo Bank, N.A.***

*        Incorporated  by reference to the Fund's Annual Report on Form 10-K for
         the fiscal year ended December 31, 1989,  filed with the Securities and
         Exchange Commission on March 29, 1990.

**       Incorporated  by reference to the Fund's Annual Report on Form 10-K for
         the fiscal year ended December 31, 1988,  filed with the Securities and
         Exchange Commission on March 29, 1989.

***      Incorporated by reference to the Fund's  Quarterly  Report on Form 10-Q
         for the quarter  ended June 30,  1989,  filed with the  Securities  and
         Exchange Commission on August 14, 1989.

****     Incorporated  by reference to the Fund's Annual Report on Form 10-K for
         the fiscal year ended December 31, 1993,  filed with the Securities and
         Exchange Commission on March 28, 1994.

(b)  Reports on Form 8-K - None.


<PAGE>


                                   SIGNATURES


    Pursuant  to the  requirements  of  Section  13 or 15(d)  of the  Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on its
behalf by the  undersigned,  thereunto  duly  authorized on the 13th day of May,
1997.

                              EQUITABLE CAPITAL PARTNERS, L.P.

                         By:  Alliance Corporate Finance Group Incorporated,
                              as Managing General Partner,


Dated:  May 13, 1997     /s/  James R. Wilson
                              -----------------------------
                              James R. Wilson
                              Title:  President


Dated:  May 13, 1997     /s/  Andy Pitsillos
                              --------------------------- 
                              Andy Pitsillos
                              Title:  Vice President and Chief
                                      Accounting Officer


<PAGE>


                                   SIGNATURES


    Pursuant  to the  requirements  of  Section  13 or 15(d)  of the  Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on its
behalf by the  undersigned,  thereunto  duly  authorized on the 13th day of May,
1997.

                              EQUITABLE CAPITAL PARTNERS, L.P.

                         By:  Alliance Corporate Finance Group Incorporated,
                              as Managing General Partner,


Dated:  May 13, 1997        James R. Wilson
                            Title:  President


Dated:  May 13, 1997
                             Andy Pitsillos
                             Title:  Vice President and Chief
                                     Accounting Officer