SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549

                                   FORM 8-K

                                CURRENT REPORT

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

       Date of Report (date of earliest event reported)  August 19, 1996

                         BALCOR CURRENT INCOME FUND-85
                       A REAL ESTATE LIMITED PARTNERSHIP
         ------------------------------------------------------------
                           Exact Name of Registrant


Illinois                                0-14352
- --------------------------------        --------------------------------
State or other jurisdiction             Commission file number

2355 Waukegan Road
Suite A200
Bannockburn, Illinois                   36-3344227
- --------------------------------        --------------------------------
Address of principal                    I.R.S. Employer
executive offices                       Identification
                                        Number

60015
- --------------------------------
Zip Code

              Registrant's telephone number, including area code:
                                (847) 267-1600
<PAGE>
ITEM 5.  OTHER EVENTS
- -------------------------------------------

a) Willow Lawn Self-Storage facility

In 1986,  the  Partnership  acquired the  Willow  Lawn  Self-Storage  facility,
Richmond, Virginia  (the  "Property"), utilizing  approximately  $3,026,000  in
offering proceeds.  In  1992, the Partnership  obtained a $14,100,000  mortgage
loan collateralized by  three of  its properties, including  the Property,  the
proceeds of which was used to repay mortgage loans collateralized by two of the
Partnership's other properties, pay refinancing costs and for other Partnership
purposes. In 1995, the loan was  refinanced and the new loan is  collateralized
by a Partnership  property.  The Property currently has no underlying debt. 

On August 19, 1996, the Partnership contracted to sell the Property to an 
unaffiliated party, SUSA Partnership L.P., a Tennessee partnership, which is an
affiliate of the entity which originally sold the Property to the Partnership. 
The sale price was $5,603,470 and the sale closed on August 30, 1996.  From the
proceeds of the  sale, the  Partnership paid approximately  $22,000 in  closing
costs and received  the remaining  sale proceeds  of approximately  $5,581,000.
Neither the  General  Partner  nor  any  affiliate  will  receive  a  brokerage
commission in connection with  the sale of the  Property.  The General  Partner
will  be  reimbursed  by  the  Partnership  for  actual  expenses  incurred  in
connection with the sale.

b)  El Dorado Hills Apartments

As previously reported, on June 12, 1996, the Partnership contracted to sell El
Dorado Hills  Apartments,  San  Diego,  California, to  an unaffiliated party,
Security Capital Pacific Trust, a Maryland real estate investment trust, for  a
sale price of $29,350,000.  The sale closed on August 30, 1996.  The  purchaser
took title to the property subject to  the existing mortgage loan which had  an
outstanding principal balance  of approximately $16,772,000  at closing.   From
the proceeds of the sale, the Partnership paid $83,859 as its one-half share of
the loan transfer fee, approximately $35,000  in closing costs, $367,000 to  an
unaffiliated party as a  brokerage commission and $222,000  to an affiliate  of
the third party  providing property  management services for  the property  for
services rendered in connection  with the sale.   The Partnership received  the
remaining sale proceeds of approximately $11,870,000.  
<PAGE>
ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS
- ----------------------------------------------------------------------

     (A)  FINANCIAL STATEMENTS AND EXHIBITS:

            None

     (B)  PRO FORMA FINANCIAL INFORMATION:

            None

     (C)  EXHIBITS:

          (99) (a)  Agreement of Sale and attachment thereto relating to the
                    sale of Willow Lawn Self-Storage facility, Richmond,
                    Virginia.

               (b)  First Amendment to Agreement of Sale dated August 15, 1996 
                    relating to the sale of Willow Lawn Self-Storage facility, 
                    Richmond, Virginia.

               (c)  Amendment to Agreement of Sale and Escrow Agreement dated 
                    August 30, 1996 relating to the sale of Willow Lawn Self-
                    Storage facility, Richmond, Virginia.

               (d)  Letter Agreement dated August 30, 1996 relating to the sale
                    of the Willow Lawn Self-Storage facility, Richmond, 
                    Virginia.

     No information is required under Items 1, 2, 3, 4, 6 and 8 and these items
have, therefore, been omitted.
<PAGE>
Signature
- -------------

     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 hereunto duly authorized.

                    BALCOR CURRENT INCOME FUND-85
                    A REAL ESTATE LIMITED PARTNERSHIP

                         By:  Balcor Current Income Partners-85, 
                              an Illinois general partnership, its general 
                              partner

                         By:  The Balcor Company, a Delaware corporation,
                              a partner

                         By:  /s/ Jerry M. Ogle
                              ------------------------------------
                                  Jerry M. Ogle, Vice President 
                                  and Secretary

Dated:  September 20, 1996
<PAGE>
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{"company-data": {"conformed-name": "BALCOR CURRENT INCOME FUND 85", "cik": "0000763697", "assigned-sic": "6500", "irs-number": "363344227", "state-of-incorporation": "IL", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "002-95910", "film-number": "96632815"}, "business-address": {"street1": "BALCOR PLZ 4849 GOLF RD", "city": "SKOKIE", "state": "IL", "zip": "60077", "phone": "7086772900"}, "mail-address": {"street1": "4849 GOLF ROAD", "city": "SKOKIE", "state": "IL", "zip": "60077"}, "former-company": {"former-conformed-name": "BALCOR EQUITY PROPERTIES XXI", "date-changed": "19850813"}}
SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549

                                   FORM 8-K

                                CURRENT REPORT

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

       Date of Report (date of earliest event reported)  August 19, 1996

                         BALCOR CURRENT INCOME FUND-85
                       A REAL ESTATE LIMITED PARTNERSHIP
         ------------------------------------------------------------
                           Exact Name of Registrant

Illinois                                0-14352
- --------------------------------        --------------------------------
State or other jurisdiction             Commission file number

2355 Waukegan Road
Suite A200
Bannockburn, Illinois                   36-3344227
- --------------------------------        --------------------------------
Address of principal                    I.R.S. Employer
executive offices                       Identification
                                        Number

60015
- --------------------------------
Zip Code

              Registrant's telephone number, including area code:
                                (847) 267-1600
ITEM 5.  OTHER EVENTS
- -------------------------------------------

a) Willow Lawn Self-Storage facility

In 1986,  the  Partnership  acquired the  Willow  Lawn  Self-Storage  facility,
Richmond, Virginia  (the  "Property"), utilizing  approximately  $3,026,000  in
offering proceeds.  In  1992, the Partnership  obtained a $14,100,000  mortgage
loan collateralized by  three of  its properties, including  the Property,  the
proceeds of which was used to repay mortgage loans collateralized by two of the
Partnership's other properties, pay refinancing costs and for other Partnership
purposes. In 1995, the loan was  refinanced and the new loan is  collateralized
by a Partnership  property.  The Property currently has no underlying debt. 

On August 19, 1996, the Partnership contracted to sell the Property to an 
unaffiliated party, SUSA Partnership L.P., a Tennessee partnership, which is an
affiliate of the entity which originally sold the Property to the Partnership. 
The sale price was $5,603,470 and the sale closed on August 30, 1996.  From the
proceeds of the  sale, the  Partnership paid approximately  $22,000 in  closing
costs and received  the remaining  sale proceeds  of approximately  $5,581,000.
Neither the  General  Partner  nor  any  affiliate  will  receive  a  brokerage
commission in connection with  the sale of the  Property.  The General  Partner
will  be  reimbursed  by  the  Partnership  for  actual  expenses  incurred  in
connection with the sale.

b)  El Dorado Hills Apartments

As previously reported, on June 12, 1996, the Partnership contracted to sell El
Dorado Hills  Apartments,  San  Diego,  California, to  an unaffiliated party,
Security Capital Pacific Trust, a Maryland real estate investment trust, for  a
sale price of $29,350,000.  The sale closed on August 30, 1996.  The  purchaser
took title to the property subject to  the existing mortgage loan which had  an
outstanding principal balance  of approximately $16,772,000  at closing.   From
the proceeds of the sale, the Partnership paid $83,859 as its one-half share of
the loan transfer fee, approximately $35,000  in closing costs, $367,000 to  an
unaffiliated party as a  brokerage commission and $222,000  to an affiliate  of
the third party  providing property  management services for  the property  for
services rendered in connection  with the sale.   The Partnership received  the
remaining sale proceeds of approximately $11,870,000.
ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS
- ----------------------------------------------------------------------

     (A)  FINANCIAL STATEMENTS AND EXHIBITS:

            None

     (B)  PRO FORMA FINANCIAL INFORMATION:

            None

     (C)  EXHIBITS:

          (99) (a)  Agreement of Sale and attachment thereto relating to the
                    sale of Willow Lawn Self-Storage facility, Richmond,
                    Virginia.

               (b)  First Amendment to Agreement of Sale dated August 15, 1996 
                    relating to the sale of Willow Lawn Self-Storage facility, 
                    Richmond, Virginia.

               (c)  Amendment to Agreement of Sale and Escrow Agreement dated 
                    August 30, 1996 relating to the sale of Willow Lawn Self-
                    Storage facility, Richmond, Virginia.

               (d)  Letter Agreement dated August 30, 1996 relating to the sale
                    of the Willow Lawn Self-Storage facility, Richmond, 
                    Virginia.

     No information is required under Items 1, 2, 3, 4, 6 and 8 and these items
have, therefore, been omitted.
Signature
- -------------

     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 hereunto duly authorized.

                    BALCOR CURRENT INCOME FUND-85
                    A REAL ESTATE LIMITED PARTNERSHIP

                         By:  Balcor Current Income Partners-85, 
                              an Illinois general partnership, its general 
                              partner

                         By:  The Balcor Company, a Delaware corporation,
                              a partner

                         By:  /s/ Jerry M. Ogle
                              ------------------------------------
                                  Jerry M. Ogle, Vice President 
                                  and Secretary

Dated:  September 20, 1996