10-Q

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

FORM 10-Q

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

For the Quarterly Period Ended September 30, 2002

or

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

For the transition period from __________ to __________


Commission File #0-17593


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

Delaware	#36-3587209
(State or other jurisdiction	(I.R.S. Employer Identification Number)
of incorporation or organization)
2901 Butterfield Road, Oak Brook, Illinois	60523
(Address of principal executive office)	(Zip Code)

Registrant's telephone number, including area code:  630-218-8000

                    N/A                    
(Former name, former address and former fiscal
year, if changed since last report)

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     

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

Balance Sheets

September 30, 2002 and December 31, 2001
(unaudited)


Assets

		2002	2001
Current assets:
Cash and cash equivalents	$	1,354,291	1,332,850
Accounts and rents receivable		627	658
Total current assets		1,354,918	1,333,508
Investment properties (including acquisition fees paid to Affiliates of     $1,250,037 at September 30, 2002 and December 31, 2001):
Land		3,187,438	3,187,438
Buildings and improvements		12,423,443	12,423,443
		15,610,881	15,610,881
Less accumulated depreciation		5,045,510	4,788,274
Net investment properties		10,565,371	10,822,607
Other assets:
Deferred leasing fees to Affiliates (net of accumulated amortization     of $220,555 and $184,864 at September 30, 2002 and December     31, 2001, respectively)		7,177	42,868
Deferred rent receivable (Note 2)		434,755	377,567
Total other assets		441,932	420,435
Total assets	$	12,362,221	12,576,550

See accompanying notes to financial statements.

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

Balance Sheets
(continued)

September 30, 2002 and December 31, 2001
(unaudited)

Liabilities and Partners' Capital

		2002	2001
Current liabilities:
Accounts payable	$	17,788	1,274
Accrued real estate taxes		34,598	-
Distributions payable (Note 4)		75,103	124,169
Due to Affiliates (Note 3)		6,767	7,775
Deposits held for others		458,520	362,610
Total current liabilities		592,776	495,828
Commission payable to Affiliate (Note 3)		132,000	132,000
Total liabilities		724,776	627,828
Partners' capital:
General Partner:
Capital contribution		500	500
Cumulative net income		49,999	52,571
		50,499	53,071
Limited Partners:
Units of $500. Authorized 80,000 Units, 50,095.50 Units outstanding       (net of offering costs of $3,148,734, of which $653,165 was paid to        Affiliates)		21,916,510	21,916,510
Cumulative net income		18,901,918	18,255,326
Cumulative distributions		(29,231,482)	(28,276,185)
		11,586,946	11,895,651
Total Partners' capital		11,637,445	11,948,722
Total liabilities and Partners' capital	$	12,362,221	12,576,550

See accompanying notes to financial statements.

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

Statements of Operations

For the three and nine months ended September 30, 2002 and 2001
(unaudited)

		Three months	Three months	Nine months	Nine months
		ended	ended	Ended	ended
		September 30, 2002	September 30, 2001	September 30, 2002	September 30, 2001
Income:
Rental income (Notes 1 and 2)	$	312,099	418,317	1,162,296	1,307,953
Additional rental income		-	2,261	4,519	6,780
Interest income		3,966	3,207	12,013	24,324
Other income		-	3,646	-	3,755
		316,065	427,431	1,178,828	1,342,812
Expenses:
Professional services to Affiliates		3,232	7,524	9,223	18,863
Professional services to non-    affiliates		3,000	2,000	27,660	26,710
General and administrative     expenses to Affiliates		7,056	8,222	19,621	22,008
General and administrative     expenses to non-affiliates		5,939	5,401	21,600	16,624
Property operating expenses to     Affiliates		4,086	6,016	13,830	13,275
Property operating expenses to     non-affiliates		20,702	3,075	149,947	5,439
Depreciation		85,745	82,434	257,236	273,792
Amortization		32,666	1,513	35,691	4,539
		162,426	116,185	534,808	381,250
Net income	$	153,639	311,246	644,020	961,562
		==========	===========	==========	==========
Net income (loss) allocated to:
General Partner		(857)	(824)	(2,572)	(2,738)
Limited Partners		154,496	312,070	646,592	964,300
Net income	$	153,639	311,246	644,020	961,562
		==========	===========	==========	==========
Net loss allocated to the one
General Partner Unit	$	(857)	(824)	(2,572)	(2,738)
		==========	===========	==========	==========
Net income per Unit, basic and   diluted, allocated to Limited   Partners per weighted average   Limited Partnership Units of   50,095.50	$	3.08	6.23	12.91	19.25
		==========	===========	==========	==========

See accompanying notes to financial statements.

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

Statements of Cash Flows

For nine months ended September 30, 2002 and 2001
(unaudited)

		2002	2001
Cash flows from operating activities:
Net income	$	644,020	961,562
Adjustments to reconcile net income to net cash provided by   operating activities:
Depreciation		257,236	273,792
Amortization		35,691	4,539
Provision for impairment
Changes in assets and liabilities:
Accounts and rents receivable		31	2,156
Other assets		-	167
Deferred rent receivable		(57,188)	(84,513)
Real estate taxes payable		34,598	-
Accounts payable		16,514	(37,045)
Due to Affiliates		(1,008)	(1,964)
Net cash provided by operating activities		929,894	1,118,694
Cash flows from financing activities:
Deposits held for others		95,910	67,363
Cash distributions		(1,004,363)	(1,096,965)
Net cash used in financing activities		(908,453)	(1,029,602)
Net increase in cash and cash equivalents		21,441	89,092
Cash and cash equivalents at beginning of period		1,332,850	1,413,462
Cash and cash equivalents at end of period	$	1,354,291	1,502,554

See accompanying notes to financial statements.

-5-

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

Notes to Financial Statements

September 30, 2002
(unaudited)

Readers of this Quarterly Report should refer to the Partnership's audited financial statements for the fiscal year ended December 31, 2001, which are included in the Partnership's 2001 Annual Report, as certain footnote disclosures which would substantially duplicate those contained in such audited financial statements have been omitted from this Report.

(1)  Organization and Basis of Accounting

The Registrant, Inland Monthly Income Fund II, L.P. (the "Partnership"), was formed on June 20, 1988 pursuant to the Delaware Revised Uniform Limited Partnership Act, to invest in improved residential, retail, industrial and other income producing properties. On August 4, 1988, the Partnership commenced an Offering of 50,000 (subject to increase to 80,000) Limited Partnership Units pursuant to a Registration under the Securities Act of 1933. The Offering terminated on August 4, 1990, with total sales of 50,647.14 Units at $500 per Unit, resulting in gross offering proceeds of $25,323,569, not including the General Partner's contribution for $500. All of the holders of these Units have been admitted to the Partnership. Inland Real Estate Investment Corporation is the General Partner. The Limited Partners of the Partnership share in the benefits of ownership of the Partnership's real property investments in proportion to the number of Units held. The Partnership repurchased 551.64 Units for $260,285 from va rious Limited Partners through the Unit Repurchase Program. There are no funds remaining for the repurchase of Units through this program.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

In the opinion of management, the financial statements contain all the adjustments necessary, which are of a normal recurring nature, to present fairly the financial position and results of operations for the periods presented herein. Results of interim periods are not necessarily indicative of the results to be expected for the year.

(2)  Deferred Rent Receivable

Certain tenant leases contain provisions providing for scheduled rent increases. Generally accepted accounting principles require that rental income be recorded for the period of occupancy using the straight-line basis. The accompanying financial statements include increases of $57,188 and $84,513 for the nine months ended September 30, 2002 and 2001, of rental income for the period of occupancy for which scheduled rent increases apply and $434,755 and $377,567 in related deferred rent receivable as of September 30, 2002 and December 31, 2001, respectively. These amounts will be collected over the terms of the related leases as scheduled rent payments are made.

- -6-

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

Notes to Financial Statements
(continued)

September 30, 2002
(unaudited)

(3)   Transactions with Affiliates

The General Partner and its Affiliates are entitled to reimbursement for salaries and expenses of employees of the General Partner and its Affiliates relating to the administration of the Partnership. Such costs are included in professional services and general and administrative expenses to Affiliates, of which $6,767 and $7,775 was unpaid as of September 30, 2002 and December 31, 2001, respectively.

An Affiliate of the General Partner earned Property Management Fees of $13,830 and $13,275 for the nine months ended September 30, 2002 and 2001, respectively, in connection with managing the Partnership's properties. Such fees are included in property operating expenses to Affiliates, all of which was paid as of September 30, 2002 and 2001.

In connection with the sale of The Wholesale Club on January 8, 1991, the Partnership recorded $132,000 of sales commission payable to an Affiliate of the General Partner. Such commission has been deferred until the Limited Partners receive their Original Capital plus a return as specified in the Partnership Agreement.

(4)  Subsequent Events

During October 2002, the Partnership paid a distribution of $75,103 to the Limited Partners.

- -7-

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

Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this quarterly report on Form 10-Q constitute "forward-looking statements" within the meaning of the Federal Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Partnership's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among other things, federal, state or local regulations; adverse changes in general economic or local conditions; inability of borrower to meet financial obligations; uninsured losses; and potential conflicts of interest between the Partnership and its Affiliates, including the General Partner.

Liquidity and Capital Resources

On August 4, 1988, the Partnership commenced an Offering of 50,000 (subject to increase to 80,000) Limited Partnership Units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The Offering terminated on August 4, 1990, with total sales of 50,647.14 Units at $500 per Unit, resulting in gross offering proceeds of $25,323,569, not including the General Partner's contribution of $500. All of the holders of these Units have been admitted to the Partnership. The Partnership has acquired five properties utilizing $21,224,542 of capital proceeds collected. On January 8, 1991, the Partnership sold one of its properties, The Wholesale Club. On November 30, 1999, the Partnership sold another of its properties, Eurofresh Plaza. As of September 30, 2002, cumulative distributions to Limited Partners totaled $29,231,482, of which $4,395,565 represents proceeds from the sale of The Wholesale Club, $2,392,818 represents proceeds from the sale of Eurofresh Plaza, and $22,443,099 represent s distributable cash flow from the properties. The Partnership repurchased 551.64 Units for $260,285 from various Limited Partners through the Unit Repurchase Program. There are no funds remaining for the repurchase of Units through this program.

As of September 30, 2002, the Partnership had cash and cash equivalents of approximately $1,354,000 which includes approximately $458,000 held in an unrestricted escrow account for the payment of real estate taxes for Colonial Manor Living Center. The Partnership intends to use such remaining funds for property upgrades, distributions and for other working capital requirements.

As of September 30, 2002, the Partnership has made cumulative distributions of $253,868 in addition to the 8% annualized return to the Limited Partners from excess cash flow. To the extent that the cash flow from the properties is insufficient to meet the Partnership's needs, the Partnership may rely on advances from Affiliates of the General Partner, other short-term financing, or may sell one or more of the properties or may reduce the distribution rate. See Note (4).

Results of Operations

At September 30, 2002, the Partnership owns three operating properties. Two of the Partnership's three operating properties, Scandinavian Health Spa and Colonial Manor Living Center, are leased on a "triple-net" basis which means that all expenses of the property are passed through to the tenant. The lease of the other property owned by the Partnership, Kmart, provided that the Partnership be responsible for maintenance of the structure and the parking lot and the tenant is required to reimburse the Partnership for portions of insurance, real estate taxes and common area maintenance. As of June 29, 2002, Kmart has rejected their lease and ceased rent payments.

Rental income decreased for the nine months ended September 30, 2002, as compared to the nine months ended September 30, 2001, due to the reduction in the annual rent on the Colonial Manor Living Center under the new lease, which began July 1, 2001 and the termination of the Kmart lease on June 29, 2002.

-8-

The Kmart Corporation filed for Chapter 11 bankruptcy reorganization on January 22, 2002. As a result thereof, Kmart had the option to accept or reject its lease with the Partnership. On March 8, 2002, Kmart Corporation announced its intent to close 283 stores, including the Chandler, Arizona store. The Bankruptcy Court approved these closings on March 20, 2002, as well as the liquidation procedures. As of June 29, 2002, Kmart has rejected their lease for the Chandler, Arizona property and has ceased making rent payments. The General Partner believes that the current rent at $5.37 per square foot is at or below market, and therefore, the space may be leasable to new tenants. It is the intent of the General Partner to use its best efforts to lease this space. Commissions or concessions may be required to obtain or attract replacement tenants. The General Partner will file a lease rejection claim with the bankruptcy court on behalf of the Partnership.

General and administrative expenses to non-affiliates increased for the nine months ended September 30, 2002, as compared to the nine months ended September 30, 2001, due to an increase in printing and state tax expense.

Property operating expenses to non-affiliates increased for the nine months ended September 30, 2002, as compared to the nine months ended September 30, 2001, due to an increase in the real estate tax expense and other property related expenses as a result of Kmart rejecting their lease. During 2002, the Partnership paid the second installment of 2001 real estate taxes and accrued real estate taxes payable for the nine months ended September 30, 2002.

The following is a list of approximate occupancy levels for the Partnership's investment properties as of the end of each quarter during 2001 and 2002:

	2001				2002
Properties	03/31	06/30	09/30	12/31	03/31	06/30	09/30	12/31
Scandinavian Health Spa	100%	100%	100%	100%	100%	100%	100%
Broadview Heights, Ohio
Colonial Manor	100%	100%	100%	100%	100%	100%	100%
LaGrange, Illinois
Kmart	100%	100%	100%	100%	100%	0%	0%
Chandler, Arizona

- -9-

Item 3: Quantitative and Qualitative Disclosures about Market Risks

Not Applicable.

Item 4: Controls and Procedures

Within 90 days prior to the filing date of this report, the General Partner conducted, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, the principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information that is required to be disclosed in the periodic reports that we must file with the Securities and Exchange Commission.

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

PART II - Other Information

Items 1 through 5 are omitted because of the absence of conditions under which they are required.

(a)  Exhibits:

      99.1 Section 906 Certification by the Principal Executive Officer

      99.2 Section 906 Certification by the Principal Financial Officer

(b)  Reports on Form 8-K:

      None

- -10-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	INLAND MONTHLY INCOME FUND II, L.P.
By:	Inland Real Estate Investment Corporation
	General Partner
	/S/ BRENDA G. GUJRAL
By:	Brenda G. Gujral
	President
Date:	November 12, 2002
	/S/ PATRICIA A. DELROSSO
By:	Patricia A. DelRosso
	Senior Vice President
Date:	November 12, 2002
	/S/ KELLY TUCEK
By:	Kelly Tucek
	Assistant Vice President and
	Principal Financial Officer
Date:	November 12, 2002

- -11-

SECTION 302 CERTIFICATION

I, Brenda G. Gujral, President, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Inland Monthly Income Fund II, L.P.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report.
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
1. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
2. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
3. presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
1. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
2. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

By: Inland Real Estate Investment Corporation

General Partner

/S/ Brenda G. Gujral                                   

Name: Brenda G. Gujral

Title: President of the General Partner and

Principal Executive Officer of Inland Monthly Income Fund II, L.P

Date: November 12, 2002

-12-

Section 302 CERTIFICATION

I, Kelly Tucek, Assistant Vice President, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Inland Monthly Income Fund II, L.P.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report.
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
1. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
2. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
3. presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
1. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
2. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

By: Inland Real Estate Investment Corporation

General Partner

/S/ Kelly Tucek____________________________________

Name: Kelly Tucek

Title: Assistant Vice President of the General Partner and

Principal Financial Officer of Inland Monthly Income Fund II, L.P.

Date: November 12, 2002

-13-

EX-99

Exhibit 99.1

Section 906 Certification

Pursuant to Section 1350 of Title 18 of the United States Code, the undersigned hereby certifies that:

(1) I have reviewed the Quarterly Report on Form 10-Q of Inland Monthly Income Fund II, L.P. (the "Report") to which this statement is an Exhibit;

(2) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(3) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Inland Monthly Income Fund II, L.P.

By: Inland Real Estate Investment Corporation

General Partner

/S/ Brenda G. Gujral_________________________________

Name: Brenda G. Gujral

Title: President of the General Partner and

Principal Executive Officer of Inland Monthly Income Fund II, L.P

Date: November 12, 2002

EX-99

Exhibit 99.2

Section 906 Certification

Pursuant to Section 1350 of Title 18 of the United States Code, the undersigned hereby certifies that:

(1) I have reviewed the Quarterly Report on Form 10-Q of Inland Monthly Income Fund II, L.P. (the "Report") to which this statement is an Exhibit;

(2) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(3) The information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of Inland Monthly Income Fund II, L.P.

By: Inland Real Estate Investment Corporation

General Partner

/S/ Kelly Tucek____________________________________

Name: Kelly Tucek

Title: Assistant Vice President of the General Partner and

Principal Financial Officer of Inland Monthly Income Fund II, L.P.

Date: November 12, 2002