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, 1998

                         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, 1998 and December 31, 1997        5

Statements of Operations  
  For the Three Months Ended March 31, 1998 and 1997        6

Statements of Changes in Net Assets 
  For the Three Months Ended March 31, 1998 and 1997        7

Statements of Cash Flows
  For the Three Months Ended March 31, 1998 and 1997        8

Statement of Changes in Partners' Capital 
  For the Three Months Ended March 31, 1998                 9

Schedule of Portfolio Investments 
  March 31, 1998                                           10

Supplemental Schedule of Realized Gains and Losses
  For the Three Months Ended March 31, 1998                13

Notes to Financial Statements                              14


Item 2.  Management's Discussion and Analysis of
  Financial Condition and Results of Operations            19


                PART II - OTHER INFORMATION

Item 6.  Exhibits                                          22




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


<S>                                                              <C>                  <C>                       <C>
ASSETS:                                                                Notes            March 31, 1998           December 31, 1997
-------------------------------------------------                    ----------        -----------------        ------------------

     Investments                                                      2,10,12
         Enhanced Yield Investments at Value-
              Managed Companies
              (amortized cost of $16,931,732 at
              March 31, 1998 and $16,931,732
              at December 31, 1997)                                                     $      1,550,960          $     7,589,732
              Non-Managed Companies
              (amortized cost of $12,623,976 at
              March 31, 1998 and $13,766,546
              at December 31, 1997)                                                            3,510,369                7,555,572
         Temporary Investments
              (at amortized cost )                                                             9,200,000                8,098,650

     Cash                                                                                         22,420                   47,134
     Interest Receivable                                               2,12                        5,209                   64,768
     Receivable on Investment Sold                                     2,10                      456,682                        -
     Note Receivable                                                    3,4                    1,474,776                1,484,748

TOTAL ASSETS                                                                            $     16,220,416          $    24,840,604
                                                                                        ================          ===============


LIABILITIES AND PARTNERS' CAPITAL

     Liabilities                                                                                            
         Professional Fees Payable                                       9              $         42,535          $        41,548
         Independent General Partners' Fees Payable                      8                        10,933                   12,396
         Fund Administrative Expenses Payable                            7                        41,221                   50,149
         Other Accrued Liabilities                                                                 3,674                    4,725
              Total Liabilities                                                                   98,363                  108,818

     Partners' Capital
         Managing General Partner                                       3,4                    1,062,473                1,134,402
         Limited Partners (284,611 Units)                                4                    15,059,580               23,597,384
              Total Partners' Capital                                                         16,122,053               24,731,786

TOTAL LIABILITIES AND PARTNERS' CAPITAL                                                 $     16,220,416          $    24,840,604
                                                                                        ================          ===============




               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, 1998              March 31, 1997
                                                                               --------------              --------------
INVESTMENT INCOME- Notes 2,12:
     Interest                                                                  $       67,271              $    1,239,358
     Dividend                                                                               -                     122,907
          TOTAL INVESTMENT INCOME                                                      67,271                   1,362,265

EXPENSES:
     Investment Advisory Fee- Note 6                                                  281,413                     369,616
     Fund Administration Fees and Expenses- Note 7                                     99,448                     117,263
     Independent General Partners'
      Fees and Expenses- Note 8                                                        37,800                      35,000
     Professional Fees - Note 9                                                         2,000                      15,000
     Valuation Expenses                                                                 1,500                       3,500
          TOTAL EXPENSES                                                              422,161                     540,379

NET INVESTMENT (LOSS) INCOME                                                         (354,890)                    821,886

NET CHANGE IN UNREALIZED DEPRECIATION
     ON INVESTMENTS- Note 12                                                       (8,941,364)                (24,011,536)

NET REALIZED GAINS ON INVESTMENTS- Note 10                                          3,107,256                  20,466,783

NET DECREASE IN NET ASSETS
     RESULTING FROM OPERATIONS                                                 $   (6,188,998)             $   (2,722,867)
                                                                               ==============              ==============

 

                      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, 1998             March 31, 1997
                                                                                  --------------             --------------
FROM OPERATIONS:

    Net Decrease in Net Assets
       Resulting from Operations                                                  $   (6,188,998)            $   (2,722,867)

    Cash Distributions to Partners                                                    (2,410,760)               (21,719,699)

    Reduction in Managing General Partners' Contribution                                  (9,975)                   (67,179)

    Total Decrease                                                                    (8,609,733)               (24,509,745)

NET ASSETS:

    Beginning of Period                                                               24,731,786                110,708,174

    End of Period                                                                 $   16,122,053             $   86,198,429
                                                                                  ==============             ==============

  


               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, 1998           March 31, 1997
CASH FLOWS FROM OPERATING ACTIVITIES:                                                  --------------           --------------
       Interest and Discount Income                                                    $       14,055           $    4,795,796
       Fund Administration Fees & Expenses                                                   (108,376)                (130,463)
       Investment Advisory Fee                                                               (281,413)                (168,902)
       Independent General Partners' Fees and Expenses                                        (39,262)                 (43,971)
       Valuation Expenses                                                                      (2,551)                  (4,214)
       Sale (Purchase)of Temporary Investments, Net                                          (988,579)             (25,120,406)
       Proceeds from Sales and Principal Payments of
           Enhanced Yield Investments                                                       3,793,185               42,352,467
       Professional Fees                                                                       (1,013)                 (25,144)
       Insurance Fees                                                                               -                   (3,366)
           Net Cash Provided by Operating Activities                                        2,386,046               21,651,797
CASH FLOWS FROM FINANCING ACTIVITIES:
       Cash Distributions to Partners                                                      (2,410,760)             (21,719,699)
           Net Cash Used in Financing Activities                                           (2,410,760)             (21,719,699)
Net Decrease in Cash                                                                          (24,714)                 (67,902)
Cash at the Beginning of the Period                                                            47,134                   91,206
Cash at the End of the Period                                                          $       22,420           $       23,304
                                                                                       ==============           ==============


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

Net Decrease In Net Assets Resulting From Operations                                    $   (6,188,998)          $   (2,722,867)

Adjustments to Reconcile Net Increase (Decrease) in Net Assets
       Resulting from Operations to Net Cash Provided by Operating
       Activities:
Decrease in Investments                                                                      (302,650)              (3,234,722)
(Increase) Decrease in Accrued Interest and other Investment Income                           (53,215)               3,433,532
(Increase)in Prepaid Expenses                                                                       -                   (3,367)
Net Change in Unrealized Depreciation on Investments                                        8,941,364               24,011,536
(Decrease) in Fund Administration Expenses Payable                                             (8,928)                 (13,200)
(Decrease) Increase in Other Accrued Liabilities                                               (1,051)                       -
(Decrease) in Independent General Partners' Fees Payable                                       (1,463)                  (8,971)
Increase (Decrease)in Professional Fees Payable                                                   987                  (10,144)
       Total Adjustments                                                                    8,575,044               24,174,664
Net Cash Provided by Operating Activities                                              $    2,386,046           $   21,451,797
                                                                                       ==============           ==============



               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, 1998

Partners' Capital at January 1, 1998                                      $ 1,134,402        $ 23,597,384         $ 24,731,786
Cash Distributions to Partners                                                   (105)         (2,410,655)          (2,410,760)
Reduction in Managing General Partners' Contribution          3                (9,975)                  -               (9,975)
Allocation of Net Investment Income                          11                (3,549)           (351,341)            (354,890)
Allocation of Net Unrealized Depreciation
   on Investments                                            12               (89,373)         (8,851,991)          (8,941,364)
Allocation of Net Realized Gains on Investments                                31,073           3,076,183            3,107,256
Partners' Capital at March 31, 1998                                       $ 1,062,473        $ 15,059,580         $ 16,122,053
                                                                          ===========        ============         ============






               See the Accompanying Notes to Financial Statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                        EQUITABLE CAPITAL PARTNERS, L.P.
                        SCHEDULE OF PORTFOLIO INVESTMENTS
                                MARCH 31, 1998
                                  (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   $   519,710
                                                                                ------------    ----------   -----------
                                                                                   3,464,732     3,464,732       519,710       3.64
                                                                                ------------    ----------   -----------------------

                    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             0
                                                                                ------------   -----------   -----------
                                                                                   9,342,000     9,342,000             0       0.00
                                                                                ------------   -----------   -----------------------

                    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*(a)              06/13/90     1,815,000     1,815,000       453,750
  $      2,310,000  R&S/Strauss, Inc., 
                       Sr. Sub. Nt. 15% due 05/31/00*(a)              06/13/90     2,310,000     2,310,000       577,500
                                                                                 -----------  ------------   -----------
                                                                                   4,125,000     4,125,000     1,031,250       7.23
                                                                                 -----------  ------------   -----------------------




                    TOTAL INVESTMENT IN  MANAGED  COMPANIES                     $ 16,931,732  $ 16,931,732   $ 1,550,960      10.87%
                    ---------------------------------------                     ------------  ------------   -----------------------

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


<PAGE>
<TABLE>
<CAPTION>
                                              EQUITABLE CAPITAL PARTNERS, L.P.
                                             SCHEDULE OF PORTFOLIO INVESTMENTS
                                                    MARCH 31, 1998
                                                (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


                    DISTRIBUTION SERVICES

                    WESTERN PIONEER, INC. - NOTE 12
  $      9,460,000  Western Pioneer, Inc.,
                      Sr. Sub. Nts. 10% due 11/30/07*(a)              11/30/94   $ 1,219,460  $  1,219,460   $  2,838,000
   162,161 Warrants Western Pioneer, Inc.,
                     Common Stock Purchase Warrants **                11/30/94             0             0              0
                                                                                 -----------  ------------   ------------
                                                                                   1,219,460     1,219,460      2,838,000     19.90
                                                                                 -----------  ------------   ----------------------


                    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* (a)      10/18/91     2,836,516     2,836,516        672,369
     380.80 Shares  Pergament Holding, Corp., Common Stock Class B ** 02/28/89     8,568,000     8,568,000              0
    135.912 Shares  Pergament Holding, Corp., Common Stock Class C ** 02/28/89             0             0              0
                                                                                 -----------   -----------    -----------
                                                                                  11,404,516    11,404,516        672,369      4.72
                                                                                 -----------   -----------    ---------------------


                    TOTAL INVESTMENT IN NON-MANAGED  COMPANIES                   $12,623,976   $12,623,976    $ 3,510,369     24.62%
                    ------------------------------------------                   -----------   -----------    ---------------------

                    TOTAL INVESTMENT IN ENHANCED YIELD INVESTMENTS               $29,555,708   $29,555,708    $ 5,061,329     35.49%
                    ----------------------------------------------               -----------   -----------    ---------------------


</TABLE>

                             See the Accompanying Notes to Financial Statements.


<PAGE>
<TABLE>
<CAPTION>
                                               EQUITABLE CAPITAL PARTNERS, L.P.
                                              SCHEDULE OF PORTFOLIO INVESTMENTS
                                                     MARCH 31, 1998
                                                 (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

$      9,200,000   Federal Home Loan Mortgage Disc Note,
                     5.90% due 4/01/98                                3/31/98   $   9,198,492  $  9,200,000   $  9,200,000
                                                                                -------------  ------------   ------------
                   TOTAL INVESTMENT IN COMMERCIAL PAPER                         $   9,198,492  $  9,200,000   $  9,200,000    64.51%
                                                                                -------------  ------------   ---------------------


                   TOTAL TEMPORARY INVESTMENTS                                  $   9,198,492  $  9,200,000   $  9,200,000    64.51%
                                                                                -------------  ------------   ---------------------

                   TOTAL INVESTMENT PORTFOLIO                                   $  38,754,200  $ 38,755,708   $ 14,261,329   100.00%
                                                                                =============  ============   =====================


                   SUMMARY OF INVESTMENTS
                   Subordinated Notes                                           $   8,180,976  $  8,180,976   $  4,541,619    31.85%
                   Common Stock and Warrants                                       21,374,732    21,374,732        519,710     3.64
                   Temporary Investments                                            9,198,492     9,200,000      9,200,000    64.51
                                                                                -------------  ------------   ---------------------
                                                                                $  38,754,200  $ 38,755,708   $ 14,261,329   100.00%
                                                                                =============  ============   =====================

                   *  Restricted Security
                  **  Restricted Non-income Producing Security
                  (a) Non-accrual investment status.

</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, 1998
                                                   (UNAUDITED)

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



Lexmark International Group, Inc. 
   Common Stock                                      various             92,636   $    617,576    $  3,724,832   $   3,107,256


MTI Holding Inc.
   12% Sr. Sec. Note                                 3/12/98           $220,102        220,102         220,102               -
   Common Stock                                                          15,772        236,580         236,580               -
   Common Stock Purchase Warrants                                         4,397              -               -               -   



Total Net Realized Gains for the
  Three Months Ended March 31, 1998                                               $  1,074,258    $  4,181,514    $  3,107,256
                                                                                  ============    ============    ============

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

<PAGE>

                        EQUITABLE CAPITAL PARTNERS, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1998
                                   (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.

    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.  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.

<PAGE>

     For privately issued securities in which the Fund typically  invested,  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.

    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.

    Income Taxes

     As discusssed 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  by the Managing General
Partners 1%  allocation  of return of  capital.  Such  allocation  for the three
months  ended March 31, 1998  resulted in a $9,975  reduction  of the  principal
amount of the Note. 
<PAGE>
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.

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 ("Deductible Fees"). 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.  

     The  Investment  Advisory Fee is calculated  and paid quarterly in advance.
The  Investment  Advisory Fees paid by the Fund for the three months ended March
31, 1998 and 1997 were $281,413 and $369,616, respectively.

7.  Fund Administration Fee and Expenses

     The Fund  Administration  Fees paid by the Fund for the three  months ended
March 31, 1998 and 1997 were $75,000 and $75,000, respectively.

     Beginning October 13, 1996, MLFAI is entitled to receive  reimbursement for
all direct-out-of-pocket expenses incurred in connection with the administration
of the Fund,  commencing  October 13, 1992. For the three months ended March 31,
1998 and 1997, the Fund incurred administrative expenses of $24,448 and $42,263,
respectively,  which  consisted  primarily  of  printing,  audit and tax  return
preparation and custodian fees paid for by MLFAI on behalf of the Fund.
<PAGE>

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,  1998 and 1997,  the Fund  incurred
$37,800 and $35,000,  respectively,  of Independent  General  Partners' Fees and
Expenses.

9. Related Party Transactions

     For the three months ended March 31, 1998 and 1997,  the Fund paid expenses
of $1,013 and $14,691 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 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 made only
those investments that were recommended by the Managing General Partner and that
met the Fund's  investment  guidelines  or that were  otherwise  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 limited 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, 1998, the Fund received  $68,353 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.

     During the first quarter of 1998, the Fund sold the remaining 92,636 shares
of  Lexmark  International  Group,  Inc.  Class B Common  Stock  for  $3,724,832
resulting in a gain of $3,107,256 to the Fund.

     On March 12, 1998, the Fund sold its MTI Holdings,  Inc. 12% Senior Secured
Note,  common stock and warrants for $456,682.  No gain, loss or income has been
recorded on this transaction.

     All of the  proceeds  received  during  the first  quarter  of 1998 will be
distributed to Limited Partners of record as of March 31, 1998 on May 15, 1998.
                    
     As of March  31,  1998,  the Fund had  remaining  investments  in 3 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 2 Non-Managed  Companies (a  Non-Managed
Company is one to which such  assistance is not provided)  totaling  $29,555,708
(including $854,000 capitalized cost of payment-in-kind securities),  consisting
of $8,180,976 in senior notes and  subordinated  notes and $21,374,732 in common
stock and purchase warrants.
<PAGE>
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, 1998,  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, 1998, the Fund recorded net unrealized
depreciation on Enhanced Yield Investments of $8,941,364 compared to $24,011,536
for the three months ended March 31, 1997. Such  depreciation  was the result of
adjustments in value made with respect to the following  investments  during the
three months ended March 31, 1998:

     The amount  includes the reversal of $2,902,592 of unrealized  appreciation
of Lexmark  International  Group,  Inc.  Class B common stock due to the sale of
92,636 shares.

     On March 31, 1998, Quantegy Acquisition Corp, common stock was written down
from 100% to 15% of the cost resulting in unrealized  depreciation of $2,945,022
to the Fund.

     On March 31,  1998,  R&S  Strauss  Inc.  15% Senior  Subordinated  Note was
written down from 100% to 25% of par,  resulting in unrealized  depreciation  of
$3,093,750 to the Fund.
 
    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
    R&S  Strauss  Inc. 
      15% Senior Subordinated Note           November 30, 1997

    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, 1997,  the tax basis of
the  Fund's  assets was  greater  than the  amounts  reported  in the  Financial
Statements  by  $37,057,962.   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 Distributions

     On May 7, 1998, the Independent General Partners approved an aggregate cash
distribution of $3,896,325 for the three months ended March 31, 1998, which will
be  paid on May 15,  1998 to the  Limited  Partners.  The  amount  that  will be
distributed  to  Limited  Partners  on  record  as of March  31,  1998  includes
$1,109,983 of return of capital. On a per Unit basis, the distribution of $13.69
includes  $9.79 of net  realized  gains  and $3.90 of  return  of  capital.  The
Managing General Partner's one percent  allocation of $39,357 is being held as a
Deferred  Distribution  Amount  resulting  in no  distribution  to the  Managing
General Partner.
<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, 1998, the Fund had a total of 5 Enhanced Yield  Investments
at a net cost of  $29,555,708  (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, 1998, the Fund received proceeds
from the following investments:

     On January 2, 1998, the Fund received  $68,353 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.

     During the three months ended March 31, 1998,  the Fund sold the  remaining
92,636  shares of Lexmark  International  Group,  Inc.  Class B Common Stock for
$3,724,832 resulting in a gain of $3,107,256.

     On March 12, 1998, the Fund sold its MTI Holdings,  Inc. 12% Senior Secured
Note,  common stock and warrants for $456,682.  No gain, loss or income has been
recorded on this transaction.

     All of the proceeds  received during the first quarter of 1998 are expected
to be distributed to Limited Partners on record as of March 31, 1998, on May 15,
1998.

     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 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.

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.
<PAGE>

Results of Operations

     For the three months ended March 31, 1998, net investment  income decreased
by $1,176,776 as compared to the same period in 1997. Net  investment  income is
comprised of investment income  (primarily  interest and dividend income) offset
by  expenses.  The  decrease  in the  1998  net  investment  income  versus  the
comparative  period in 1997,  reflects  the  decrease in interest  and  dividend
income partially offset by the decrease in Fund Administration Fees and Expenses
and Investment Advisory Fees.

     For the three months ended March 31, 1998, the Fund had  investment  income
of $67,271 as compared to $1,362,265  for the same period in 1997.  The decrease
in 1998  investment  income of 95% was  primarily due to an decrease in interest
and dividend income.

     The Fund incurred expenses of $422,161 for the three months ended March 31,
1998,  as compared to $540,379 for the same period in 1997.  The decrease in the
1998 expenses of $118,218 was primarily due to a decrease in Professional  Fees,
Fund Administration Fees and Expenses and Independent General Partner's 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, 1998 in the amount of $6,188,998 as compared to
an decrease of $2,722,867  for the  comparative  period in 1997. The decrease in
net  assets  for the three  months  ended  March 31,  1998 is  comprised  of net
investment  loss of $354,890,  net realized gains of $3,107,256  offset by a net
change in unrealized  depreciation of $8,941,364.  For the comparable  period in
1997,  the  decrease in net assets was  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  (see  Statements  of  Operations in the Financial
Statements).

     For the three  months  ended  March 31,  1998 and 1997,  the Fund  incurred
Investment Advisory Fees of $281,413 and $369,616, respectively (as described in
Note 6 to the Financial Statements).
 
     The Fund  Administration  Fees and Expenses (as  described in Note 7 to the
Financial  Statements)  for the three  months ended March 31, 1998 and 1997 were
$99,448 and $117,263 respectively.  The decrease from 1998 to 1997 of $17,815 is
primarily  due to the Fund  Administration  Fee  changing  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, 1998 and 1997 were $37,800 and $35,000, respectively.

     The Fund  incurred  Professional  Fees of $2,000 and  $15,000 for the three
months ended March 31, 1998 and 1997,  respectively.  For the three months ended
March 31,  1998,  the Fund  incurred  $1,013 of related  party  legal fees which
included reimbursed legal fees to Equitable Life for legal services. (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.
<PAGE>

     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, 1998, the Fund recorded net unrealized
depreciation  on  Enhanced  Yield  Investments  of  $8,941,364  as  compared  to
$24,011,536  for the three months ended March 31, 1997. The change in unrealized
depreciation  for the three months ended March 31, 1998 was primarily the result
of unrealized  depreciation in Quantegy  Acquisition Corp and R&S Strauss,  Inc.
and the reversal of unrealized appreciation in Lexmark International Group, Inc.
 
    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
    R&S  Strauss  Inc. 
      15% Senior Subordinated Note           November 30, 1997

    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,  1998,  the Fund  recorded a net
realized  gain of  $3,107,256  on  transactions  involving  one  Enhanced  Yield
Investment.  For the three months ended March 31,  1997,  the Fund  recorded net
realized gains on investments of  $20,466,783 on  transactions  involving  three
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, 1998, 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, 1998.

 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, 1998.

                              EQUITABLE CAPITAL PARTNERS, L.P.

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


Dated:  May 13, 1998     /s/  James R. Wilson
                              -----------------------------
                              James R. Wilson
                              Title:  President


Dated:  May 13, 1998     /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, 1998.

                              EQUITABLE CAPITAL PARTNERS, L.P.

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


Dated:  May 13, 1998
                              James R. Wilson
                              Title:  President


Dated:  May 13, 1998
                              Andy Pitsillos
                              Title:  Vice President and Chief
                                      Accounting Officer