October 31, 1998

		QUARTERLY REPORT TO THE LIMITED PARTNERS
			OF DSI REALTY INCOME FUND XI


DEAR LIMITED PARTNERS:

We are pleased to enclose the Partnership's unaudited financial statements 
for the period ended September 30, 1998.  The following is Management's 
discussion  and  analysis of the  Partnership's financial condition and 
results  of  its  operations.

For the three month periods ended September 30, 1998 and 1997, total revenues 
increased 5.4% from $487,619 to $513,710 and total expenses decreased 1.3%
from $268,533 to $265,090.  Minority interest in income of real estate joint
ventures increased 21.2% from $109,000 to $132,154.  As a result, net income
increased 5.8% from $110,086 for the three-month period ended September 30,
1997, to $116,466 for the same period in 1998.  Rental revenue increased as
a result of higher occupancy and unit rental rates.  Occupancy levels for
the Partnership's four mini-storage facilities averaged 90.6% for the three
month period ended September 30, 1998 as compared to 85.7% for the same period
in 1997.  The Partnership is continuing its marketing efforts to attract and
keep new tenants in its various mini-storage facilities.  Operating expenses
decreased approximately $4,800 (2.0%) primarily as a result of lower
maintenance and repair expenses, partially offset by an increase in yellow
pages advertising costs.  General and administrative expenses increased
approximately $1,300 (5.4%) primarily as a result of an increase in incentive
management fees.  As this fee is computed as a percentage of distributions
made to the Limited Partners, the increase in distributions as discussed
below, resulted in an increase in the incentive management fee.

For the nine-month periods ended September 30, 1998, and 1997, total revenues
increased 4.5% from $1,418,696 to $1,482,077 and total expenses increased 1.5%
from $818,385 to $831,001.  Minority interest in income of real estate joint
ventures increased 21.2% from $109,000 to $132,154.  As a result, net income
increased 5.6% from $491,311 for the nine-month period ended September 30,
1997, to $518,922 for the same period in 1998.  Rental revenue increased for
the same reasons as discussed above.  Operating expenses increased approximately
$6,200 (0.9%) primarily as a result of higher yellow pages advertising costs
and real estate tax expenses, partially offset by lower salaries and wages.
General and administrative expenses increased approximately $6,400 (6.5%)
for the same reason as discussed above.

The General Partners determined that effective with the second quarter 1998
distribution which was paid on April 15, 1998, distributions to the limited
partners would be increased to an amount which yields an 8% annual return on
the capital contributed by the limited partners from an annual return of 7%
paid previously.

The General Partners plan to continue their policy of funding improvements 
and maintenance of Partnership properties with cash generated from operations.
The Partnership's financial resources appear to be adequate to meet its needs.

The Year 2000 issue refers to the inability of certain computer systems to
recognize a date using "00" as the Year 2000.  The Partnership has implemented
a Year 2000 program, which has three phases:  (1) identification;
(2) remediation; and (3) testing and verification.  The Partnership, as well
as the property management company and the Partnership's warehouse facilities
have completed those phases.  Computer programs have been upgraded and tested
to function properly with respect to the dates in the Year 2000 and thereafter.
Year 2000 compliance costs are nominal and have been expensed in the regular
course of business. The Partnership provides no assurance that third-party
suppliers and customers will be compliant.  Nevertheless, the Partnership
does not believe that the Year 2000 issue will have a material adverse effect
on its financial condition or results of operations.

We are not enclosing a copy of the Partnership Form 10-Q as filed with the 
Securities and Exchange Commission since all the information set forth 
therein is contained either in this letter or in the attached financial 
statements. However, if you wish to receive a copy of said report, please 
send a written request to DSI Realty Income Fund XI, P.O. Box 357, Long 
Beach, California 90801. 

                              Very truly yours,

                              DSI REALTY INCOME FUND XI
                              By: DSI Properties, Inc., as
                              General Partner



                              By  /s/ Robert J. Conway
                                  ____________________________
                                 ROBERT J. CONWAY, President