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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

(Mark one)

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

For Quarter Ended                 September 30, 2003                

or

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

For the transition period from ___________________ to ___________________

Commission File Number:                 0-18444                

YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP

(803) 547-9100

(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 þ No o

PART I — FINANCIAL INFORMATION
Item 1. Financial Statements

YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS

YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS

See Notes to Condensed Financial Statements.

YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS

See Notes to Condensed Financial Statements.

YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)

1.		Nature of Business:
		The Partnership was formed in July 1986 to acquire, operate, hold for investment and sell real estate. The Partnership currently owns the EastPark Executive Center in Charlotte, North Carolina. On April 24, 1998, the Partnership sold its only other real property holding, the BB&T building facilities (formerly the UCB building) located in Greenville, South Carolina.
2.		Basis of Presentation:
		In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments (all of which were normal recurring adjustments) necessary for a fair presentation. The results of operations for the interim periods are not necessarily indicative of the results which may be expected for an entire year.
		Leased property held for sale has been recorded following the Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Statement No. 144 requires assets held for sale to be recorded at the lower of their carrying value or estimated fair value less cost to sell.
3.		Statement of Cash Flows:
		For purposes of reporting the statements of cash flows, the Partnership includes all cash accounts, which are not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less as cash and cash equivalents on the accompanying condensed balance sheets.
4.		Priority Return:
		At December 31, 2002, the cumulative unpaid priority return to the unit holders was $3,380,753 compared to $3,137,969 one year prior. This increase resulted from no distributions being made to partners during the year. Based on the current and projected commercial real estate market conditions, the General Partners believe that it is reasonably unlikely that a sale of the remaining Partnership property would produce net sale proceeds sufficient to pay any of such priority return. Furthermore, the General Partners believe that it is reasonably unlikely that the Partnership’s operating income or any refinancing of Partnership debt would generate sufficient funds to pay any portion of the priority return.

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

Changes in Financial Condition

There have not been any significant changes in financial condition from December 31, 2002 to September 30, 2003. Accrued expenses have increased from year-end due to the accrual of the 2003 real property taxes and the accrual of a repair expense (See “Results of Operations” below).

Liquidity and Capital Resources

During the quarter ended September 30, 2003, the Partnership operations continued to meet working capital requirements and working capital was increased by approximately $5,000 since year-end. The working capital as of September 30, 2003 was $135,848. Cash distributions in the amount of $4,388 were paid out during the first quarter. These distributions represented the 2002 Federal and North Carolina tax paid on behalf of foreign and non-resident partners.

Results of Operations

Operating results for the period ended September 30, 2003 are down approximately 20% from the prior year mainly due to the parking lot paving expense of $50,605 that occurred in September. Without this expense, operating results would have been up approximately 18%. Rental income has increased only approximately 1% form the prior year as two of the tenants began month-to-month leases this year that did not provide for rental escalations. Overall, operating expenses are down approximately 6.5% as compared to the same period of the prior year when the paving expense is excluded. Interest expense continues to be down from the prior year due to the decrease in interest rates on the floating rate loan.

Status of EastPark Executive Center

The General Partners remain committed to selling the EastPark facility and continue to have it listed with a commercial real estate broker. At this time, the facility is not under contract with any potential buyers. The General Partners are also working towards extending the leases with the current tenants. Although the facility is 91% leased, all current tenants have the option to terminate their leases currently. The GSA has the option to cancel its lease upon ninety (90) days written notice and accounts for 85% of the total rental income; accordingly, the General Partners will focus their lease extension efforts on a GSA extension. However, no assurances can be given that a replacement tenant could be found if GSA decides to terminate its lease. The General Partners will continue to search for the best offer for the property and manage it at acceptable standards until such time as it can sell the property to a qualified buyer.

Forward-Looking Statements

This report contains certain forward-looking statements with respect to the financial condition, results of operations, plans, objectives, future performance and business of the Partnership. These forward-looking statements involve certain risks and uncertainties. Actual results may differ materially from those contemplated by such forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities:

	•		Inability to sell the building due to current market conditions
	•		Inability to extend the lease to its major tenant

Item 4. Controls and Procedures

     (a)  Evaluation of disclosure controls and procedures

Yager/Kuester Public Fund Limited Partnership’s Chief Executive Officer and Chief Financial Officer have concluded that Yager/Kuester Public Fund Limited Partnership’s disclosure controls and procedures are effective. This conclusion is based on the above-referenced officers’ evaluation of such controls and procedures as of the end of the quarter for which this report is filed.

     (b)  Changes in Internal Controls

There have not been any changes in Yager/Kuester Public Fund Limited Partnership’s internal control over financial reporting that have materially effected or are reasonably likely to materially effect, the Partnership’s internal control over financial reporting.

PART II. OTHER INFORMATION

	*		Incorporated by reference to Exhibit A of the Partnership’s Prospectus dated December 1, 1987, Registration Number 33-07056-A.
	**		Incorporated by reference to Exhibit 3 of the Partnership’s Form 10-K for the year ended December 31, 1995.
	***		Incorporated by reference to Exhibit 4 of the Partnership’s Form 10-K for the year ended December 31, 1998.

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.