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)  September 26, 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 2.  ACQUISITION OR DISPOSITION OF ASSETS
----------------------------------------------------------------------

Providence Square Apartments

In 1985, the Partnership acquired the Providence Square Apartments, Charlotte,
North Carolina (the "Complex"), utilizing approximately $8,801,000 in offering
proceeds.  The Partnership acquired the Complex subject to mortgage financing
of $11,300,000 (the "Providence Loan").  In September 1992, the Partnership
used cash reserves to make a $1,000,000 principal paydown on the Providence
Loan.  In December 1992, the Partnership obtained a $14,100,000 mortgage loan
from a third party, $2,000,000 of which was used to purchase the land
underneath the Complex (the land and the Complex are defined as the
"Property").   The loan was collateralized by three of the Partnership's
properties, including the Property.  A portion of the proceeds was also used to
repay the Providence Loan at a discount of $560,000 and a mortgage loan
collateralized by another Partnership property, and to pay refinancing costs.
The remaining proceeds of the loan were used to fund improvements at the
Property and for other Partnership purposes.  In 1995, the loan was refinanced
with a new $17,000,000 first mortgage loan from a third party collateralized
solely by the Property.  The Partnership received approximately $3,066,000 in
excess proceeds. 

On October 17, 1996, the Partnership contracted to sell the Property for a sale
price of $20,510,000 to an unaffiliated party, Group One Investments, Inc., an
Illinois corporation.  In addition, the Partnership has executed an agreement
to sell to the purchaser the personal property located at the Property for a
net sale price of $4,500,000.  The purchaser has deposited $150,000 into an
escrow account as earnest money and is obligated to deposit an additional
$100,000 upon the completion of the purchaser's due diligence review.  The
purchaser is expected to purchase the Property subject to the existing first
mortgage loan which is estimated to have an outstanding principal balance of
approximately $16,817,000 at closing, scheduled for December 2, 1996. The
Partnership and the purchaser each have the option to extend the closing for up
to 30 days upon written notice to the other party in order to obtain the
lender's consent for the assumption of the loan by the purchaser.

From the proceeds of the sale, the Partnership will pay $205,100 to an
unaffiliated party as a brokerage commission and up to $153,825 to an affiliate
of the third party providing property management services for the Property as a
fee for services rendered in connection with the sale of the Property.  The
Partnership will receive the remaining proceeds of approximately $7,834,000,
less closing costs, which includes certain fees relating to the purchaser's
assumption of the mortgage loan.  Of such proceeds, $250,000 will not be
available for use or distribution by the Partnership until 90 days after
closing.  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.

The closing is subject to the satisfaction of numerous terms and conditions,
including the consent of the holder of the first mortgage loan.  There can be
no assurance that all of the terms and conditions will be complied with and,
therefore, it is possible that the sale of the property may not occur.
<PAGE>
ITEM 5.  OTHER EVENTS
-------------------------------------------

a) Storage USA of Norcross

In 1986, the Partnership acquired Storage USA of Norcross (formerly known as
Jones Mill Road Mini-Warehouse), Norcross, Georgia (the "Property"), utilizing
approximately $3,032,000 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 were 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 only by another  Partnership  property.  The
Property currently has no underlying debt. 

On September 26, 1996, the Partnership contracted to sell the Property for a
sale price of $3,300,000 to an unaffiliated party, Storage Trust Properties,
L.P., a Delaware limited partnership.  The purchaser has deposited $50,000 into
an escrow account as earnest money.  The remainder of the sale price will be
payable in cash at closing, scheduled for November 15, 1996.  The Partnership
will receive all sale proceeds after the payment of closing costs.  Neither the
General Partner, any affiliate or any third party 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.

Affiliates of the General Partner have previously sold or have contracted to
sell other assets to the purchaser.

The closing is subject to the satisfaction of numerous terms and conditions.
There can be no assurance that all of the terms and conditions will be complied
with and, therefore, it is possible the sale of the property may not occur.

b)  American Way Mall 

As previously reported, on June 7, 1996, the Partnership contracted to sell
American Way Mall, Fairfield, New Jersey, to an unaffiliated party, Robert
Heidenberg, for a sale price of $5,200,000.   The purchaser and the Partnership
have agreed to extend the  closing of the sale to no later than January 25,
1997.  The sale price will be increased if the closing occurs as follows:  (i)
on or before November 1, 1996, the sale price will be $5,300,000; (ii) from
November 2, 1996 through December 15, 1996, the sale price will be $5,400,000;
and (iii) after December 16, 1996, the sale price will be $5,500,000.  The
purchaser has deposited with the Partnership an additional $50,000 as earnest
money for a total of $150,000.  

The agreement of sale previously required that, in the event the purchaser or
any affiliate thereof transfers any portion of the property to a third party
specified in the agreement of sale prior to October 25, 1996, the Partnership
is entitled to a specified portion of the proceeds from such transfer.  The
purchaser and the Partnership have agreed to extend this date to February 25,
1997.  
<PAGE>
ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS
----------------------------------------------------------------------

     (A)  FINANCIAL STATEMENTS AND EXHIBITS:

            None

     (B)  PRO FORMA FINANCIAL INFORMATION:

            None

     (C)  EXHIBITS:

          (2)  (a)  Agreement of Sale and attachment thereto relating to the 
                    sale of Providence Square Apartments, Charlotte, North 
                    Carolina.

               (b)  Agreement relating to the sale of Providence Square
                    Apartments, Charlotte, North Carolina.

               (c)  Amendment No. 1 to Agreement of Sale relating to the sale 
                    of Providence Square Apartments, Charlotte, North Carolina.

               (d)  Letter Agreement relating to the sale of Providence Square
                    Apartments, Charlotte, North Carolina.

          (99) (a)  (i)  Agreement of Sale and attachment thereto relating to 
                         the sale of Storage USA of Norcross, Norcross, 
                         Georgia.

                    (ii) Amendment to Agreement of Sale relating to the sale of
                         Storage USA of Norcross, Norcross, Georgia.
                     
               (b)  Second Amendment to Agreement of Sale relating to the sale 
                    of American Way Mall, Fairfield, New Jersey.

     No information is required under Items 1, 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:  November 1, 1996
<PAGE>
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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)  September 26, 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 2.  ACQUISITION OR DISPOSITION OF ASSETS
----------------------------------------------------------------------

Providence Square Apartments

In 1985, the Partnership acquired the Providence Square Apartments, Charlotte,
North Carolina (the "Complex"), utilizing approximately $8,801,000 in offering
proceeds.  The Partnership acquired the Complex subject to mortgage financing
of $11,300,000 (the "Providence Loan").  In September 1992, the Partnership
used cash reserves to make a $1,000,000 principal paydown on the Providence
Loan.  In December 1992, the Partnership obtained a $14,100,000 mortgage loan
from a third party, $2,000,000 of which was used to purchase the land
underneath the Complex (the land and the Complex are defined as the
"Property").   The loan was collateralized by three of the Partnership's
properties, including the Property.  A portion of the proceeds was also used to
repay the Providence Loan at a discount of $560,000 and a mortgage loan
collateralized by another Partnership property, and to pay refinancing costs.
The remaining proceeds of the loan were used to fund improvements at the
Property and for other Partnership purposes.  In 1995, the loan was refinanced
with a new $17,000,000 first mortgage loan from a third party collateralized
solely by the Property.  The Partnership received approximately $3,066,000 in
excess proceeds. 

On October 17, 1996, the Partnership contracted to sell the Property for a sale
price of $20,510,000 to an unaffiliated party, Group One Investments, Inc., an
Illinois corporation.  In addition, the Partnership has executed an agreement
to sell to the purchaser the personal property located at the Property for a
net sale price of $4,500,000.  The purchaser has deposited $150,000 into an
escrow account as earnest money and is obligated to deposit an additional
$100,000 upon the completion of the purchaser's due diligence review.  The
purchaser is expected to purchase the Property subject to the existing first
mortgage loan which is estimated to have an outstanding principal balance of
approximately $16,817,000 at closing, scheduled for December 2, 1996. The
Partnership and the purchaser each have the option to extend the closing for up
to 30 days upon written notice to the other party in order to obtain the
lender's consent for the assumption of the loan by the purchaser.

From the proceeds of the sale, the Partnership will pay $205,100 to an
unaffiliated party as a brokerage commission and up to $153,825 to an affiliate
of the third party providing property management services for the Property as a
fee for services rendered in connection with the sale of the Property.  The
Partnership will receive the remaining proceeds of approximately $7,834,000,
less closing costs, which includes certain fees relating to the purchaser's
assumption of the mortgage loan.  Of such proceeds, $250,000 will not be
available for use or distribution by the Partnership until 90 days after
closing.  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.

The closing is subject to the satisfaction of numerous terms and conditions,
including the consent of the holder of the first mortgage loan.  There can be
no assurance that all of the terms and conditions will be complied with and,
therefore, it is possible that the sale of the property may not occur.
ITEM 5.  OTHER EVENTS
-------------------------------------------

a) Storage USA of Norcross

In 1986, the Partnership acquired Storage USA of Norcross (formerly known as
Jones Mill Road Mini-Warehouse), Norcross, Georgia (the "Property"), utilizing
approximately $3,032,000 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 were 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 only by another  Partnership  property.  The
Property currently has no underlying debt. 

On September 26, 1996, the Partnership contracted to sell the Property for a
sale price of $3,300,000 to an unaffiliated party, Storage Trust Properties,
L.P., a Delaware limited partnership.  The purchaser has deposited $50,000 into
an escrow account as earnest money.  The remainder of the sale price will be
payable in cash at closing, scheduled for November 15, 1996.  The Partnership
will receive all sale proceeds after the payment of closing costs.  Neither the
General Partner, any affiliate or any third party 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.

Affiliates of the General Partner have previously sold or have contracted to
sell other assets to the purchaser.

The closing is subject to the satisfaction of numerous terms and conditions.
There can be no assurance that all of the terms and conditions will be complied
with and, therefore, it is possible the sale of the property may not occur.

b)  American Way Mall 

As previously reported, on June 7, 1996, the Partnership contracted to sell
American Way Mall, Fairfield, New Jersey, to an unaffiliated party, Robert
Heidenberg, for a sale price of $5,200,000.   The purchaser and the Partnership
have agreed to extend the  closing of the sale to no later than January 25,
1997.  The sale price will be increased if the closing occurs as follows:  (i)
on or before November 1, 1996, the sale price will be $5,300,000; (ii) from
November 2, 1996 through December 15, 1996, the sale price will be $5,400,000;
and (iii) after December 16, 1996, the sale price will be $5,500,000.  The
purchaser has deposited with the Partnership an additional $50,000 as earnest
money for a total of $150,000.  

The agreement of sale previously required that, in the event the purchaser or
any affiliate thereof transfers any portion of the property to a third party
specified in the agreement of sale prior to October 25, 1996, the Partnership
is entitled to a specified portion of the proceeds from such transfer.  The
purchaser and the Partnership have agreed to extend this date to February 25,
1997.
ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS
----------------------------------------------------------------------

     (A)  FINANCIAL STATEMENTS AND EXHIBITS:

            None

     (B)  PRO FORMA FINANCIAL INFORMATION:

            None

     (C)  EXHIBITS:

          (2)  (a)  Agreement of Sale and attachment thereto relating to the 
                    sale of Providence Square Apartments, Charlotte, North 
                    Carolina.

               (b)  Agreement relating to the sale of Providence Square
                    Apartments, Charlotte, North Carolina.

               (c)  Amendment No. 1 to Agreement of Sale relating to the sale 
                    of Providence Square Apartments, Charlotte, North Carolina.

               (d)  Letter Agreement relating to the sale of Providence Square
                    Apartments, Charlotte, North Carolina.

          (99) (a)  (i)  Agreement of Sale and attachment thereto relating to 
                         the sale of Storage USA of Norcross, Norcross, 
                         Georgia.

                    (ii) Amendment to Agreement of Sale relating to the sale of
                         Storage USA of Norcross, Norcross, Georgia.
                     
               (b)  Second Amendment to Agreement of Sale relating to the sale 
                    of American Way Mall, Fairfield, New Jersey.

     No information is required under Items 1, 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:  November 1, 1996