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

Commission File #0-17593

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

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

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

Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP UNITS
(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 ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

State the aggregate market value of the voting stock held by nonaffiliates of the registrant. Not applicable.

The Prospectus of the Registrant dated August 4, 1988, as supplemented and filed pursuant to Rule 424(b) and 424(c) under the Securities Act of 1933 is incorporated by reference in Parts I, II and III of this Annual Report on Form 10-K.

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

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

TABLE OF CONTENTS

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PART I

Item 1. Business

Inland Monthly Income Fund II, L.P. was formed on June 20, 1988, to invest in improved residential, retail, industrial and other income producing properties. On August 4, 1988, we commenced an offering of 50,000 limited partnership units or units (subject to an increase of up to 30,000 additional units) pursuant to a Registration under the Securities Act of 1933. The offering terminated on August 4, 1990, after we had sold 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 our units were admitted to our partnership. Inland Real Estate Investment Corporation is our general partner. We acquired five properties utilizing $21,224,542 of capital proceeds collected. On January 8, 1991, we sold one of our properties, The Wholesale Club. On November 30, 1999, we sold another of our properties, Eurofresh Plaza. Our limited partners share in their portion of benefits of ownership of our real property i nvestments according to the number of units held. We 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.

We are engaged in the business of real estate investment which management considers being a single operating segment. A presentation of information about operating segments would not be material to an understanding of our business taken as a whole.

We acquired fee ownership of the following real property investments:

*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 our lease. 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 rejected their lease for the Chandler, Arizona property and ceased making rent payments. The general partner filed a lease rejection claim with the bankruptcy court on our behalf. The general partner is continuing to review various options to lease or sell the space vacated by Kmart. As of December 31, 2003, we have recorded an impairment loss on this property of $175,000.

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We have utilized our offering proceeds to acquire properties. The leases at certain of our properties entitled us to participate in gross receipts of lessees above fixed minimum amounts. Our receipt of such amounts depended in part on the ability of those lessees to compete with similar businesses in their respective vicinities. As of December 31, 2003, there are no such leases.

We also compete with many other entities engaged in real estate investment activities in the disposition of property. The ability to locate purchasers for the properties will depend primarily on the operations of the properties and the desirability of the locations of the operating properties.

Our real property investments are subject to competition from similar types of properties in the vicinity in which each is located. Approximate occupancy levels for the properties are set forth on a year-end basis in the table in Item 2 below to which reference is hereby made. Our real property investments are located in Arizona, Illinois and Ohio. We have no real property investments located outside the United States. We do not segregate revenues or assets by geographic region, and such a presentation would not be material to an understanding of our business taken as a whole.

The following is a list of our significant operating leases and the revenues from those leases as a percent of our gross income.

We executed an amendment of the Scandinavian Health Club 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.

Our 2004 business plan is to continue to market the vacant Kmart property and the Scandinavian Health Club for sale. Both properties are listed for sale with brokers. As of March 22, 2004, we have found a buyer and have entered into an agreement to sell the Scandinavian Health Club. Provided contingencies are met, the buyer performs and the sale closes, a portion of the sales proceeds may be used to make a distribution to investors. We will monitor the status of the nursing home tenant throughout the course of 2004, and evaluate the possibility of marketing the nursing home for sale in 2005.

We had no employees during 2003.

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Access to Our Information

We electronically file our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports with the Securities and Exchange Commission (SEC). The public may read and copy any of the reports that are filed with the SEC at the SEC's Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at (800)-SEC-0330. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically.

We make available, free of charge through our general partner's website, and by responding to requests addressed to our director of investor relations, the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports. These reports are available as soon as reasonably practical after such material is electronically filed or furnished to the SEC. Our general partner's website address is www.inland-investments.com. The information contained on this website, or other websites linked to our website, is not part of this document.

Limited partners wishing to communicate with our general partner can do so by writing to the attention of the general partner care of our partnership at 2901 Butterfield Road, Oak Brook, IL 60523.

Item 2. Properties

We own directly the properties referred to in Item 1 to which reference is hereby made for a description of said properties.

The following is a list of approximate occupancy levels for our investment properties as of the end of each of the last five years.

The following is a list of average effective annual rents per square foot for our investment properties for each of the last five years.

* Effective annual rent as of the termination of the lease.

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The following tables set forth certain information with respect to the amount and expiration of leases for our investment properties as of December 31, 2003:

1. No assumptions have been made regarding the releasing of expired leases. It is the opinion of the general partner that the space will be released at market prices.

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Item 3. Legal Proceedings

We are not subject to any material pending legal proceedings.

Item 4. Submission of Matters to a Vote of Security Holders

Consistent with our limited partnership agreement, there were no matters submitted to a vote of our security holders during 2003.

PART II

Item 5. Market for the our limited partnership Units and Related Security Holder Matters

As of March 22, 2004, there were 1,894 holders of our units. There is no public market for units nor is it anticipated that any public market for units will develop. Reference is made to Item 6 below for a discussion of cash distributions made to the limited partners.

Although we established a unit repurchase program, there are no funds remaining for the repurchase of units through this program.

For the years ended December 31, 2003 and 2002, we paid the following distributions:

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Item 6. Selected Financial Data

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

For the years ended December 31, 2003, 2002, 2001, 2000, and 1999

(not covered by Independent Auditors' Report)

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Item 7. 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 annual report on Form 10-K 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 our 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; uninsured losses; and potential conflicts of interest between us and our Affiliates, including the general partner.

Critical Accounting Policies

On December 12, 2001, the Securities and Exchange Commission issued Financial Reporting Release or 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, 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 investors 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 States of America or GAAP. GAAP requi res 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 and discount rates used to determine property valuation are 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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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 to 40 years for buildings and improvements and the remaining life of the related lease for tenant improvements.

Liquidity and Capital Resources

On August 4, 1988, we 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, after we had sold 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 our partnership. We acquired five properties utilizing $21,224,542 of capital proceeds collected. On January 8, 1991, we sold one of our properties, The Wholesale Club. On November 30, 1999, we sold another of our properties, Eurofresh Plaza. As of December 31, 2003, cumulative distributions to limited partners totaled $29,309,086; 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 $22,520,703 represents distributable cash flow from the properties. We 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 December 31, 2003, we had cash and cash equivalents of $1,764,717 which includes approximately $455,000 expected to be used for the payment of real estate taxes for Colonial Manor Living Center. We intend to use such remaining funds for distributions and for working capital requirements.

As of December 31, 2003, we have made cumulative distributions of $253,868 in addition to the 8% annualized return to the limited partners from excess cash flow. Through June 30, 2002, the properties owned by us were generating cash flow in excess of the 8% annualized distributions to the limited partners (paid monthly), in addition to covering all our operating expenses. As a result of the termination of the Kmart lease on June 29, 2002, we reduced the annualized return to the limited partners to 5%, beginning in July 2002. In December 2002, the general partner temporarily suspended distributions to the limited partners due to uncertainty of the Elite and SHS leases and re-tenanting costs anticipated with the Kmart property. We will continue to monitor our cash needs and the cash available for distribution. To the extent that the cash flow from the properties is insufficient to meet our needs, we may rely on advances from affiliates of the general partner, other short-term financing, or may sell one or mo re of the properties.

We executed an amendment of the SHS 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.

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Effective March 1, 2003, due to economic conditions in the nursing home industry, the general partner executed an amendment to the Elite lease to reduce the annual rent to $666,855 per year with no increases in rent over the term of the lease.

Transactions with Related Parties

Our general partner and its affiliates are entitled to reimbursement for salaries and expenses of their employees relating to our administration. Such costs of $47,568, $36,160 and $50,991 are included in professional services to affiliates and general and administrative expenses to affiliates for the years ended December 31, 2003, 2002 and 2001, respectively, of which $7,467 and $3,062 was unpaid as of December 31, 2003 and 2002, respectively.

An affiliate of our general partner earned property management fees of $14,518, $17,828 and $16,762, for the years ended December 31, 2003, 2002, and 2001, respectively, in connection with managing our properties. Such fees are included in property operating expenses to affiliates, of which $900 was unpaid as of December 31, 2003.

In connection with the sale of The Wholesale Club on January 8, 1991, we recorded $132,000 of sales commission payable to an affiliate of the general partner. Such commission has been deferred until our limited partners receive their original capital plus a return as specified in the partnership agreement.

Results of Operations

At December 31, 2002, we own three operating properties. Two of our 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. We are responsible for maintenance of the structure and the parking lot and insurance, real estate taxes and common area maintenance of the Kmart property since the termination of the Kmart lease.

Rental income was $994,317, $1,474,395 and $1,733,051 for the years ended December 31, 2003, 2002 and 2001, respectively. We entered into a revised ten-year lease with Elite, which began as of July 1, 2001. Under the new lease, Elite received a five-month rent abatement with the first payment due on December 1, 2001 and a 17% reduction in the annual rent. Although the tenant received a reduction in the annual rent payment based on the prior lease rates, the effective annual rental rate over the term of the new lease increased from $8.00 to $8.24. Effective March 1, 2003, we executed an amendment to the Elite lease to reduce the annual rent to $666,855 per year with no increases in rent over the term of the lease. Also in 2003, we executed an amendment of the SHS lease through September 30, 2013. Annual base rent increased from $359,094 to $383,231 per year commencing April 1, 2003.

Rental income decreased in 2002 due to the termination of the Kmart lease in June 2002. 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 rejected their lease for the Chandler, Arizona property and ceased making rent payments. The general partner filed a lease rejection claim with the bankruptcy court on our behalf. We are continuing to review various options to lease or sell the space vacated by Kmart. As of December 31, 2003, we have recorded an impairment loss on this property of $175,000.

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Professional services to affiliates were $22,683, $13,357 and $23,130 for the years ended December 31, 2003, 2002 and 2001, respectively. The increase in 2003 is due to an increase in accounting and legal services.

General and administrative expenses to non-affiliates were $13,285, $28,997 and $20,957 for the years ended December 31, 2003, 2002 and 2001, respectively. The increase in 2002 was due to increases in state tax expense, postage and printing expenses.

Property operating expenses to non-affiliates were $285,158, $197,019 and $6,043 for the years ended December 31, 2003, 2002 and 2001, respectively. The increase in 2002 and 2003 from 2001 is due to the termination of the Kmart lease. Beginning July 2002, we are responsible for maintenance of the structure and the parking lot and insurance, real estate taxes and common area maintenance of the Kmart property.

Our Partnership Agreement

Our partnership agreement defines the allocation of distributable available cash and profits and losses. Limited partners will receive 100% of cash available for distribution until the limited partners have received a cumulative preferred return of 8% per annum through August 4, 1993 and a preferential return of 10% per annum for the period after August 4, 1993. Thereafter, the general partner shall be allocated an amount equal to any supplemental capital contributions outstanding at the time of the distribution and then 95% of cash available for distribution will be allocated to the limited partners and 5% will be allocated to the general partner. Net sale proceeds will be distributed to the limited partners until they have received an amount equal to their invested capital and any deficiency in the 10% preferential return. Thereafter, any remaining net sale proceeds will be distributed 85% to the limited partners and 15% to the general partner. Distributions of net sale proceeds to the limited partners rep resent a return of invested capital.

Pursuant to the terms of the partnership agreement, the profits and losses from operations are allocated as follows:

1. Depreciation shall be allocated 99% to the taxable limited partners and 1% to the general partner.
2. To the extent the minimum distribution of 8% per annum through August 4, 1993 to the limited partners is funded by supplemental capital contributions, the distribution shall be treated as a guaranteed payment, and the resulting deduction shall be allocated to the general partner.
3. The remaining net profits shall be allocated 100% to the limited partners until the limited partners have been allocated an amount equal to the distribution required to provide them a cumulative preferred return of 8% per annum through August 4, 1993 and a preferential return of 10% per annum for the period after August 4, 1993.
4. The remainder, if any, shall be allocated 95% to the limited partners and 5% to the general partner.

Pursuant to the terms of the partnership agreement, the net gain from a capital transaction is allocated as follows:

1. Depreciation deductions previously taken by us with respect to the property sold shall be allocated to the partners in the amounts in which the previous deductions were allocated.
2. Remaining gain shall be allocated to all partners in the aggregate of and in proportion to, the negative balances in their capital accounts.
3. Such gain shall then be allocated to the limited partners until every limited partner's capital account equals their invested capital.
4. The balance, if any, shall be allocated as follows:

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1. To the general partner in the amount of any supplemental capital contributions, plus 15% of net sales proceeds remaining after previous allocations.
2. To the limited partners, provided, however, that the general partner has been allocated at least 1% of such gain.

The general partner was required to make supplemental capital contributions, if necessary, in sufficient amounts to allow us to make distributions to the limited partners to provide a non-compounded return on their invested capital equal to 8% per annum through August 4, 1993. The amount of such supplemental capital contributions was $30,155. The entire amount was paid to us in April of 1990. The general partner was repaid on August 4, 1993, after the limited partners received a cumulative preferred return of 8% per annum through August 4, 1993.

Selected Quarterly Financial Data (unaudited)

The following represents the results of operations for each quarter during the years ended December 31, 2003, 2002 and 2001.

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Inflation

In general, rental income and operating expenses for our properties operated under triple-net leases, Scandinavian Health Spa and Colonial Manor Living Center, are not likely to be directly affected by future inflation, since rents are fixed under the leases and property expenses are the responsibility of tenants. The capital appreciation of triple-net-leased properties is likely to be influenced by interest rate fluctuations. To the extent that inflation affects interest rates, future inflation may have an effect on the capital appreciation of triple-net-leased properties.

Item 7(a). Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

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Item 8. Financial Statements and Supplementary Data

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




Index

Schedules not filed:

All schedules other than those indicated in the index have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.

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INDEPENDENT AUDITORS' REPORT

To the Partners of
Inland Monthly Income Fund II, L.P.

We have audited the accompanying balance sheets of Inland Monthly Income Fund II, L.P. (a limited partnership) (the "Partnership") as of December 31, 2003 and 2002, and the related statements of operations, partners' capital, and cash flows for each of the three years in the period ended December 31, 2003. Our audits also included the financial statement schedule listed in the Index at Item 15(c). These financial statements and financial statement schedule are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of Inland Monthly Income Fund II, L.P. as of December 31, 2003 and 2002, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

Deloitte & Touche LLP

March 26, 2004
Chicago, Illinois

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

Balance Sheets

December 31, 2003 and 2002

Assets

See accompanying notes to financial statements.

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

Balance Sheets
(continued)

December 31, 2003 and 2002



Liabilities and Partners' Capital

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 years ended December 31, 2003, 2002 and 2001

See accompanying notes to financial statements.

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

Statements of Partners' Capital

For the years ended December 31, 2003, 2002 and 2001