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 June 30, 2003

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 #0-16790


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

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     

Indicate by a checkmark whether the registrant is an accelerated filer (as defined in Securities Exchange Act Rule 12b-2)    Yes     No  X 

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

Balance Sheets

June 30, 2003 and December 31, 2002
(unaudited)

See accompanying notes to financial statements.

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

Balance Sheets
(continued)

June 30, 2003 and December 31, 2002
(unaudited)

Liabilities and Partners' Capital

See accompanying notes to financial statements.

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See accompanying notes to financial statements.

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

Statements of Cash Flows

For the six months ended June 30, 2003 and 2002
(unaudited)

See accompanying notes to financial statements.

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

Notes to Financial Statements

June 30, 2003
(unaudited)

Readers of this Quarterly Report should refer to the Partnership's audited financial statements for the fiscal year ended December 31, 2002, which are included in the Partnership's 2002 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

Inland's Monthly Income Fund, L.P. (the "Partnership"), was formed on March 26, 1987 pursuant to the Delaware Revised Uniform Limited Partnership Act, to invest in improved residential, retail, industrial and other income producing properties. On August 3, 1987, the Partnership commenced an offering of 50,000 (subject to an increase up to 60,000) limited partnership units or units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The offering terminated on August 3, 1988, after the Partnership had sold 59,999 units at $500 per unit, resulting in gross offering proceeds of $29,999,500, not including the general partner's contribution of $500. All of the holders of these units were admitted as limited partners to the Partnership. Inland Real Estate Investment Corporation is the general partner. The limited partners share in the benefits of ownership of the Partnership's real property investments in proportion to the number of units held. The Partnership has repurchased a total of 713 units for $356,676 from various 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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

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

On January 1, 2003, the Partnership adopted FASB Interpretation No. 45 ("FIN 45") "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, an interpretation of FASB Statements No. 5, 57 and 107 and a rescission of FASB Interpretation No. 34. FIN 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees issued. FIN 45 also clarifies that a guarantor is required to recognize, at inception of a guarantee, a liability for the fair value of the obligation undertaken. The adoption of FIN 45 did not have a material effect on the Partnership's financial statements.

(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 on a straight-line basis. The accompanying financial statements include a decrease of $8,341 and an increase of $59,905 for the six months ended June 30, 2003 and 2002, respectively, of rental income for the period of occupancy for which scheduled rent increases apply and $230,570 and $238,911 in related deferred rent receivable as of June 30, 2003 and December 31, 2002, respectively. These amounts will be collected over the terms of the related leases as scheduled rent payments are made.

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

Notes to Financial Statements
(continued)

June 30, 2003
(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 $10,784 and $3,795 was unpaid at June 30, 2003 and December 31, 2002, respectively.

An Affiliate of the general partner is entitled to receive property management fees for management and leasing services. The Partnership has incurred and paid property management fees of $7,798 and $7,594 for the six months ended June 30, 2003 and 2002, respectively.

In connection with the sale of McHenry Plaza Shopping Center on July 19, 2000, the Partnership recorded $68,700 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.

In connection with the sale of Rantoul Walmart on August 5, 2000, the Partnership recorded $82,500 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.

In connection with the sale of Douglas Towers on August 24, 2001, the Partnership recorded $5,635 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. Mortgage Loans Receivable

In 2001, we sold the Douglas Towers apartment center on an installment basis and recorded a note receivable from the purchaser. As of August 1, 2002, the purchaser of the Douglas Towers apartment complex had ceased making the interest payments on the amount due to us. On June 11, 2003, as mortgagee in possession, we received and accepted an offer on the property at the foreclosure sale for approximately $95,000. As a result of this offer, we have recorded $372,953 of bad debt expense relating to the mortgage receivable on the property.

(5)  Subsequent Events

During July 2003, the Partnership paid a distribution of $107,204 to the limited partners.

During July 2003, the Partnership received approximately $212,000 as prepayment of all principal and interest outstanding on one of the mortgage loans receivable relating to the sale of the Schaumburg Terrace condominiums.

On July 15, 2003, the Douglas Towers apartments were sold to an unaffiliated third party for approximately $95,000.

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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, competition for tenants; 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.

Critical Accounting Policies

On December 12, 2001, the Securities and Exchange Commission issued Financial Reporting Release ("FRR") No. 60 "Cautionary Advice Regarding Disclosure About Critical Accounting Policies." A critical accounting policy is one that would materially effect our operations or financial condition, and requires management to make estimates or judgements in certain circumstances. We believe that our most critical accounting policies relate to how we value our investment properties and mortgage loans receivable, recognize revenue, and our cost capitalization and depreciation policies. These judgements often result from the need to make estimates about the effect of matters that are inherently uncertain. The purpose of the FRR is to provide stockholders with an understanding of how management forms these policies. Critical accounting policies discussed in this section are not to be confused with accounting principles and methods disclosed in accordance with accounting principles generally accepted in the United Stat es of America ("GAAP"). GAAP requires information in financial statements about accounting principles, methods used and disclosures pertaining to significant estimates. The following disclosure discusses judgements known to management pertaining to trends, events or uncertainties known which were taken into consideration upon the application of those policies and the likelihood that materially different amounts would be reported upon taking into consideration different conditions and assumptions.

Valuation of Investment Properties - On a quarterly basis, in accordance with Statement of Financial Accounting Standards No. 144, we conduct an impairment analysis to ensure that the carrying value of each property does not exceed its estimated fair value. If this were to occur, we would be required to record an impairment loss equal to the excess of carrying value over fair value.

In determining the value of an investment property and whether the property is impaired, management considers several factors such as projected rental and vacancy rates, property operating expenses, capital expenditures and interest rates. The capitalization rate used to determine property valuation is based on the market in which the property is located, length of leases, tenant financial strength, the economy in general, demographics, environment, property location, visibility, age, physical condition and investor return requirements among others. All of the aforementioned factors are considered by management in determining the value of any particular property. The value of any particular property is sensitive to the actual results of any of these uncertain factors, either individually or taken as a whole. Should the actual results differ from management's judgement, the valuation could be negatively or positively affected.

The valuation and possible subsequent impairment of investment properties is a significant estimate that can and does change based on management's continuous process of analyzing each property.

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Valuation Mortgage Loans Receivable - On a quarterly basis, in accordance with Statement of Financial Accounting Standards No. 144, we conduct an impairment analysis to ensure that the carrying value of each mortgage loan receivable does not exceed its estimated fair value. If this were to occur, we would be required to record an impairment loss equal to the excess of carrying value over fair value.

In determining the value of mortgage loans receivable, management considers several factors such as projected sales proceeds and expenses related to the property associated with the mortgage. Should the actual results differ from management's judgement, the valuation could be negatively or positively affected.

The valuation and possible subsequent allowance for doubtful accounts is a significant estimate that can and does change based on management's continuous process of analyzing each mortgage loan receivable.

Revenue Recognition - Under GAAP, we are required to recognize rental income based on the effective monthly rent for each lease. The effective monthly rent is equal to the average monthly rent during the term of the lease, not the stated rent for any particular month. The process, known as "straight-lining" rent generally has the effect of increasing rental revenues during the early phases of a lease and decreasing rental revenues in the latter phases of a lease. If rental income calculated on a straight-line basis exceeds the cash rent due under the lease, the difference is recorded as an increase in deferred rent receivable and included as a component of rental income in the accompanying Statements of Operations. If the cash rent due under the lease exceeds rental income calculated on a straight-line basis, the difference is recorded as a decrease in deferred rent receivable and is also included as a component of rental income in the accompanying Statements of Operations.

Cost Capitalization and Depreciation Policies - We review all expenditures and capitalize any item exceeding $5,000 deemed to be an upgrade or a tenant improvement. If we capitalize more expenditures, current depreciation expense would be higher, however, total current expenses would be lower. Depreciation expense is computed using the straight-line method. Buildings and improvements are depreciated based upon estimated useful lives of 30 years for buildings and improvements, 15 years for site improvements and the remaining life of the related lease for tenant improvements.

Liquidity and Capital Resources

On August 3, 1987, we commenced an offering of 50,000 (increased to 60,000) limited partnership units or units pursuant to a Registration Statement on Form S-11 under the Securities Act of 1933. The offering terminated on August 3, 1988, after we had sold 59,999 units at $500 per unit, resulting in gross offering proceeds of $29,999,500, not including the general partner's contribution of $500. All of the holders of these units have been admitted as limited partners to the partnership. We acquired seven properties using $25,831,542 of capital proceeds received. During 1994 and 1995, we sold the thirty-eight six-unit condominium buildings comprising the Schaumburg Terrace condominium complex. We sold one of the three lots adjacent to the Hillside Living Center during September 1997. In August 2001, we sold the 35 unit retirement apartment center, Douglas Tower apartments. As of June 30, 2003, cumulative distributions to limited partners totaled $46,474,953, including $2,095,863 of supplemental capital contr ibutions from the general partner, which represents distributable cash flow from the properties. We repurchased 713 units for $356,676 from various limited partners through the unit repurchase program. There are no funds remaining for the repurchase of units through this program.

As of June 30, 2003, we had cash and cash equivalents of approximately $968,000 which includes approximately $124,000 for the payment of real estate taxes for Douglas and Hillside Living Centers.

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Due to the payoff of the mortgage receivables relating to the sale of Schaumburg Terrace and additional property expenses incurred relating to Douglas Towers, the properties we own, along with the interest received on the Schaumburg Terrace mortgage receivables, did not generate sufficient cash flow to meet the 8% annualized distributions to the limited partners (paid monthly), in addition to covering all our operating expenses for the six months ended June 30, 2003. As a result, we have relied on working capital retained from the principal payoffs of the Schaumburg Terrace receivable to meet our cash requirements. To the extent that future cash flow is insufficient to meet our requirements, we may rely on working capital reserve, supplemental capital contributions from our general partner, advances from affiliates of our general partner, other short-term financing, or may sell one or more of the properties.

We executed an amendment of the Scandinavian Health Spa lease through September 30, 2013. Annual base rent increased from $359,094 to $383,231 per year commencing April 1, 2003. As part of the extension, we paid $400,000 for tenant improvements and equipment at the property.

Transactions with Related Parties

Our general partner and its affiliates are entitled to reimbursement for salaries and expenses of employees of the general partner and its affiliates relating to our administration. Such costs are included in professional services and general and administrative expenses to affiliates, of which $10,784, and $3,795 was unpaid at June 30, 2003 and December 31, 2002, respectively.

An affiliate of our general partner is entitled to receive property management fees for management and leasing services. We incurred and paid property management fees of $7,798 and $7,594 for the six months ended June 30, 2003 and 2002, respectively.

Results of Operations

As of June 30, 2003, we own four operating properties, two living centers, a health club and a Walmart, which are leased on a "triple-net" basis which means that all expenses of the property are passed through to the tenant.

The gain on the sale of investment property of $950 and $260,680 for the six months ended June 30, 2003 and 2002, respectively, is the result of deferred gains from the Schaumburg Terrace condominium sales being recognized as cash is received on the related financing extended to the individual purchasers. As of June 30, 2003, there are two mortgage loans receivable remaining relating to the sale of the Schaumburg Terrace condominiums.

Rental income was $729,949 and $779,742 for the six months ended June 30, 2003 and 2002, respectively. This decrease was due to lower effective annual rents on the nursing home properties as a result of lease amendments effective March 1, 2003. This decrease was partially offset by an increase in the Scandinavian Health Spa lease which was amended effective April 1, 2003.

Interest income was $24,364 and $128,675 for the six months ended June 30, 2003 and 2002, respectively. This decrease is due to the payoff of nine mortgage loans receivable in 2002.

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In 2001, we sold the Douglas Towers apartment center on an installment basis and recorded a note receivable from the purchaser. As of August 1, 2002, the purchaser of the Douglas Towers apartment complex had ceased making the interest payments on the amount due to us. We have not recorded any additional interest income receivable subsequent to the cessation of interest payments. Our general partner continued to monitor the operations of the property. In December 2002, we took over management responsibilities of the property. Over the next several months, management realized that the expenses to hold and market the property were greater than anticipated, and due to poor economic conditions in the property area, it was determined that it would be in the best interest of the investors to sell the property. At that time, management believed that the anticipated sales proceeds would exceed the carrying amount of the mortgage receivable. A foreclosure sale was held on June 11, 2003, and only one bi dder expressed interest in the property. Rather than incur significant costs to improve the property, management accepted the offer on the property at the foreclosure sale for approximately $95,000. As a result of this offer, we have recorded $372,953 of bad debt expense relating to the mortgage receivable on the property. The sale was completed on July 15, 2003 and we received $89,654, net of prorations.

Property operating expenses to non-affiliates were $18,758 and $924 for the six months ended June 30, 2003 and 2002, respectively. This increase was due to property level expenses relating to Douglas Towers that we paid while in the process of obtaining title to the property.

Professional services to affiliates were $11,959 and $6,428 for the six months ended June 30, 2003 and 2002, respectively. This increase was due to increases in legal and accounting services required by us.

General and administrative expenses to affiliates were $20,341 and $12,505 for the six months ended June 30, 2003 and 2002, respectively. This increase was due to mortgage servicing fees paid and an increase in postage expense. General and administrative expenses to non-affiliates were $39,795 and $20,097 for the six months ended June 30, 2003 and 2002, respectively. This increase was due to an increase in the Illinois replacement tax incurred.

The following is a list of approximate occupancy levels for the partnership's investment properties as of the end of each quarter during 2002 and 2003:

* This store has been vacated by the lessee, however the lessee continues to pay rent.

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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, our 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.

Item 6: Exhibits and Reports on Form 8-K

(a)  Exhibits:

     31.1 Rule 13a-14(a)/15d-14(a) Certification by Chief Executive Officer

     31.2 Rule 13a-14(a)/15d-14(a) Certification by Chief Financial Officer

     32.1 Section 1350 Certification by Chief Executive Officer

     32.2 Section 1350 Certification by Chief Financial Officer

(b)  Reports on Form 8-K:

      None

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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.