UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

x   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2008.

OR

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

For the transition period from                               to                               .

Commission file no. 0-16191

DEL TACO RESTAURANT PROPERTIES I

a California limited partnership

(Exact name of registrant as specified in its charter)

California	95-3852699
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
25521 Commercentre Drive, Lake Forest, California	92630
(Address of principal executive offices)	(Zip Code)

(949) 462-9300

(Registrant’s telephone number, including area code)

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 þ  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer þ Smaller reporting company o

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o  No þ

INDEX

DEL TACO RESTAURANT PROPERTIES I

	PAGE NUMBER
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets at September 30, 2008 (Unaudited) and December 31, 2007	3
Condensed Statements of Income for the three and nine months ended September 30, 2008 and 2007 (Unaudited)	4
Condensed Statements of Cash Flows for the nine months ended September 30, 2008 and 2007 (Unaudited)	5
Notes to Condensed Financial Statements (Unaudited)	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3. Quantitative and Qualitative Disclosures About Market Risk	11
Item 4T. Controls and Procedures	11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	12
Item 6. Exhibits	12
SIGNATURE	13
EX-31.1
EX-31.2
EX-32.1

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PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

DEL TACO RESTAURANT PROPERTIES I

CONDENSED BALANCE SHEETS

	September 30,		December 31,
	2008		2007
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	208,521	$	218,140
Receivable from Del Taco LLC		62,444		62,093
Deposits		1,172		986
Total current assets		272,137		281,219
PROPERTY AND EQUIPMENT:
Land and improvements		1,924,585		1,852,482
Buildings and improvements		1,013,134		1,013,134
Machinery and equipment		1,136,026		1,136,026
		4,073,745		4,001,642
Less—accumulated depreciation		2,098,746		2,077,035
		1,974,999		1,924,607
	$	2,247,136	$	2,205,826
LIABILITIES AND PARTNERS’ EQUITY
CURRENT LIABILITIES:
Payable to limited partners	$	31,937	$	39,157
Accounts payable		6,597		6,859
Total current liabilities		38,534		46,016
PARTNERS’ EQUITY:
Limited partners; 8,751 units outstanding at September 30, 2008 and December 31, 2007		1,946,419		1,898,115
General partner-Del Taco LLC		262,183		261,695
		2,208,602		2,159,810
	$	2,247,136	$	2,205,826

See accompanying notes to condensed financial statements.

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DEL TACO RESTAURANT PROPERTIES I

CONDENSED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2008		2007		2008		2007
RENTAL REVENUES	$	189,942	$	188,813	$	559,806	$	543,869
EXPENSES:
General and administrative		9,172		10,682		60,516		64,124
Depreciation		7,237		7,237		21,711		21,711
		16,409		17,919		82,227		85,835
Operating income		173,533		170,894		477,579		458,034
OTHER INCOME:
Interest		331		986		1,400		3,395
Other		225		250		2,475		1,500
Net income	$	174,089	$	172,130	$	481,454	$	462,929
Net income per limited partnership unit (Note 2)	$	19.69	$	19.47	$	54.47	$	52.37
Number of units used in computing per unit amounts		8,751		8,751		8,751		8,751

See accompanying notes to condensed financial statements.

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DEL TACO RESTAURANT PROPERTIES I

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
	September 30,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	481,454		$	462,929
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		21,711			21,711
Changes in operating assets and liabilities:
Receivable from Del Taco LLC		(351	)		199
Deposits		(186	)		144
Payable to limited partners		(7,220	)		(39,416	)
Accounts payable		(262	)		602
Net cash provided by operating activities		495,146			446,169
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of land and improvements		(72,103	)		—
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash distributions to partners		(432,662	)		(472,681	)
Net decrease in cash		(9,619	)		(26,512	)
Beginning cash balance		218,140			259,468
Ending cash balance	$	208,521		$	232,956

See accompanying notes to condensed financial statements.

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DEL TACO RESTAURANT PROPERTIES I

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008

UNAUDITED

NOTE 1 — BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements and should therefore be read in conjunction with the financial statements and notes thereto contained in the annual report on Form 10-K for the year ended December 31, 2007 for Del Taco Restaurant Properties I (the Partnership or the Company). In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the Partnership’s financial position at September 30, 2008, the results of operations for the three and nine month periods ended September 30, 2008 and 2007 and cash flows for the nine month periods ended September 30, 2008 and 2007 have been included. Operating results for the three and nine months ended September 30, 2008 are not necessarily indicative of the results that may be expected for the year ending December 31, 2008. Amounts related to disclosure of December 31, 2007 balances within these condensed financial statements were derived from the audited 2007 financial statements.

NOTE 2 — NET INCOME PER LIMITED PARTNERSHIP UNIT

Net income per limited partnership unit is based on net income attributable to the limited partners (after 1% allocation to the general partner) using the weighted average number of units outstanding during the periods presented, which amounted to 8,751 in 2008 and 2007.

Pursuant to the partnership agreement, annual partnership net income is allocated one percent to Del Taco LLC, formerly known as Del Taco, Inc., (Del Taco or the General Partner) and 99 percent to the limited partners. A partnership net loss in any year will be allocated 24 percent to the General Partner and 76 percent to the limited partners until the losses so allocated equal income previously allocated. Any additional losses will be allocated one percent to the General Partner and 99 percent to the limited partners. Partnership gains from any sale or refinancing will be allocated one percent to the General Partner and 99 percent to the limited partners until allocated gains and profits equal losses. Additional gains will be allocated 24 percent to the General Partner and 76 percent to the limited partners.

NOTE 3 — LEASING ACTIVITIES

The Partnership leases certain properties for operation of restaurants to Del Taco on a triple net basis. The leases are for terms of 35 years commencing with the completion of the restaurant facility located on each property and require monthly rentals equal to 12 percent of the gross sales of the restaurants. The leases expire in the years 2019 to 2020. There is no minimum rental under any of the leases.

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DEL TACO RESTAURANT PROPERTIES I

NOTES TO CONDENSED FINANCIAL STATEMENTS — CONTINUED

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008

UNAUDITED

NOTE 3 — LEASING ACTIVITIES — continued

For the three months ended September 30, 2008, the five restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $1,331,519 and unaudited net losses of $57,832 as compared to unaudited sales of $1,315,056 and unaudited net income of $3,767, respectively, for the corresponding period in 2007. Net income or loss of each restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense and the decrease in net income from the corresponding period of the prior year primarily relates to food, labor and operating expense increases that exceeded the growth in restaurant revenues. For the three months ended September 30, 2008, the one restaurant operated by a Del Taco franchisee, for which the Partnership is the lessor, had unaudited sales of $251,331 as compared with $258,388 during the same period in 2007.

For the nine months ended September 30, 2008, the five restaurants operated by Del Taco, for which the Partnership is the lessor, had combined, unaudited sales of $3,923,228 and unaudited net losses of $127,287 as compared to $3,775,425 and unaudited net income of $7,778 for the corresponding period in 2007. Net income or loss of each restaurant includes charges for general and administrative expenses incurred in connection with supervision of restaurant operations and interest expense and the decrease in net income from the corresponding period of the prior year primarily relates to food, labor and operating expense increases that exceeded the growth in restaurant revenues. For the nine months ended September 30, 2008, the one restaurant operated by a Del Taco franchisee, for which the Partnership is the lessor, had unaudited sales of $741,822 as compared with $756,813 during the same period in 2007.

NOTE 4 — TRANSACTIONS WITH DEL TACO

The receivable from Del Taco consists primarily of rent accrued for the month of September 2008. The September rent receivable was collected in October 2008.

Del Taco serves in the capacity of general partner in other partnerships which are engaged in the business of operating restaurants, and three other partnerships which were formed for the purpose of acquiring real property in California for construction of Mexican-American restaurants for lease under long-term agreements to Del Taco for operation under the Del Taco trade name.

In addition, see Note 5 with respect to certain distributions to the General Partner.

NOTE 5 — DISTRIBUTIONS

Total cash distributions declared and paid in January, April and July 2008 were $173,984, $84,853 and $173,825, respectively. On October 22, 2008, a distribution to the limited partners of $169,868, or approximately $19.41 per limited partnership unit, was declared. Such distribution was paid on October 30, 2008. The General Partner also received a distribution of $1,716 with respect to its 1% partnership interest in October 2008.

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DEL TACO RESTAURANT PROPERTIES I

NOTES TO CONDENSED FINANCIAL STATEMENTS — CONTINUED

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008

UNAUDITED

NOTE 6 — PAYABLE TO LIMITED PARTNERS

Payable to limited partners represents a reclassification from cash for distribution checks made to limited partners that have remained outstanding for six months or longer. The reduction in payable to limited partners from December 31, 2007 to September 30, 2008 is due to reissuing outstanding distribution checks to limited partners who were located in connection with the Partnership’s review of unclaimed property.

NOTE 7 — CONCENTRATION OF RISK

The six restaurants leased to Del Taco make up all of the income producing assets of the Partnership and contributed all of the Partnership’s rental revenues during the three and nine months ended September 30, 2008 and 2007. Therefore, the business of the Partnership is entirely dependent on the success of the Del Taco trade name restaurants that lease the properties.

The Partnership maintains substantially all of its cash and cash equivalents at one major commercial bank. The cash balance is in excess of the Federal Depository Insurance Commission’s limits. At September 30, 2008 and December 31, 2007, the Partnership had approximately $225,000 and $239,000, respectively, on deposit at one financial institution.

NOTE 8 — COMMITMENTS AND CONTINGENCIES

On February 21, 2008, the General Partner settled a property encroachment lawsuit regarding the Partnership’s restaurant on Haven Avenue in Rancho Cucamonga, California. To settle the case, the General Partner agreed in principal to have the Partnership purchase the encroachment area for $70,000 and obtain a full release of both parties’ claims. On May 23, 2008, a release and sale agreement was finalized.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Liquidity and Capital Resources

Del Taco Restaurant Properties I (the Partnership or the Company) offered limited partnership units for sale between March 1983 and March 1984. $4.375 million was raised through the sale of limited partnership units and used to acquire sites and build six restaurants and also to pay commissions to brokers and to reimburse Del Taco LLC (the General Partner or Del Taco) for offering costs incurred.

The six restaurants leased to Del Taco make up all of the income producing assets of the Partnership. Therefore, the business of the Partnership is entirely dependent on the success of the Del Taco trade name restaurants that lease the properties. The success of the restaurants is dependent on a large variety of factors, including, but not limited to, competition, consumer demand and preference for fast food, in general, and for Mexican-American food in particular.

Results of Operations

The Partnership owns six properties that are under long-term lease to Del Taco for restaurant operations (Del Taco, in turn, has subleased one of the restaurants to a Del Taco franchisee).

The following table sets forth rental revenue earned by restaurant for the three and nine months ended September 30, 2008 and 2007 (unaudited):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2008		2007		2008		2007
Riverside Avenue, Rialto, CA	$	29,541	$	29,604	$	86,009	$	86,944
Elden Avenue, Moreno Valley, CA		26,817		27,120		76,325		79,051
Foothill Boulevard, La Verne, CA		44,028		44,979		132,283		130,225
Baseline & Archibald, Rancho Cucamonga, CA		30,159		31,007		89,018		90,818
Elkhorn Boulevard, Sacramento, CA		22,894		20,871		66,978		59,317
Haven Avenue, Rancho Cucamonga, CA		36,503		35,232		109,193		97,514
Total	$	189,942	$	188,813	$	559,806	$	543,869

The Partnership receives rental revenues equal to 12 percent of gross sales from the restaurants. The Partnership earned rental revenue of $189,942 during the three month period ended September 30, 2008, which represents an increase of $1,129 from the corresponding period in 2007. The Partnership earned rental revenue of $559,806 during the nine month period ended September 30, 2008, which represents an increase of $15,937 from the corresponding period in 2007. The change in rental revenues between 2008 and 2007 is directly attributable to increases in sales at the restaurants under lease.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

The following table breaks down general and administrative expenses by type of expense:

	Percent of Total
	General & Administrative Expense
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2008			2007			2008			2007
Accounting fees		65.53	%		53.60	%		75.62	%		69.72	%
Distribution of information to limited partners		36.47	%		46.40	%		24.38	%		30.28	%
		102.00	%		100.00	%		100.00	%		100.00	%

General and administrative costs for the three month period ended September 30, 2008 decreased from the corresponding period in 2007 primarily due to decreased printing costs. General and administrative costs for the nine month period ended September 30, 2008 decreased from the corresponding period in 2007 primarily due to decreases in costs for accounting fees and printing costs, partially offset by increases in audit and tax preparation fees.

For the three month period ended September 30, 2008, net income increased by $1,959 from 2007 to 2008 due to the increase in revenues of $1,129 and decrease in general and administrative expenses of $1,510, partially offset by the decrease in interest and other income of $680. For the nine month period ended September 30, 2008, net income increased $18,525 from 2007 to 2008 due to the increase in revenues of $15,937 and decrease in general and administrative expenses of $3,608, partially offset by the decrease in interest and other income of $1,020.

Significant Recent Accounting Pronouncements

None.

Off-Balance Sheet Arrangements

None

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations, as well as disclosures included elsewhere in this report on Form 10-Q are based upon the Partnership’s financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. The Partnership believes the critical accounting policies that most impact the financial statements are described below. A summary of the significant accounting policies of the Partnership can be found in Note 1 to the Financial Statements which is included in the Partnership’s December 31, 2007 Form 10-K.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - continued

Revenue Recognition

Rental revenue is recognized based on 12 percent of gross sales of the restaurants for the corresponding period, and is earned at the point of sale.

Property and Equipment: Property and equipment is stated at cost. Depreciation is computed using the straight-line method over estimated useful lives which are 20 years for land improvements, 35 years for buildings and improvements, and 10 years for machinery and equipment.

The Partnership accounts for property and equipment in accordance with Statement of Financial Accounting Standards (SFAS) No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets.” SFAS 144 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In evaluating long-lived assets held for use, an impairment loss is recognized if the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying value of the asset.

Once a determination has been made that an impairment loss should be recognized for long-lived assets, various assumptions and estimates are used to determine fair value including, among others, estimated costs of construction and development, recent sales of comparable properties and the opinions of fair value prepared by independent real estate appraisers. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

None.

Item 4T. Controls and Procedures

(a) Evaluation of disclosure controls and procedures:

As of the end of the period covered by this quarterly report, we carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Treasurer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based upon that evaluation, the Chief Executive Officer and Treasurer concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company’s periodic Securities and Exchange Commission filings.

(b) Changes in internal controls:

There were no significant changes in the Company’s internal controls over financial reporting that occurred during our most recent fiscal quarter that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

(c) Asset-backed issuers:

Not applicable.

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PART II. OTHER INFORMATION

There is no information required to be reported for any items under Part II, except as follows:

Item 1. Legal Proceedings

On February 21, 2008, the General Partner settled a property encroachment lawsuit regarding the Partnership’s restaurant on Haven Avenue in Rancho Cucamonga, California. To settle the case, the General Partner agreed in principal to have the Partnership purchase the encroachment area for $70,000 and obtain a full release of both parties’ claims. On May 23, 2008, a release and sale agreement was finalized.

Item 6. Exhibits

(a) Exhibits

31.1	Nick Shepherd’s Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Steven L. Brake’s Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification pursuant to subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

DEL TACO RESTAURANT PROPERTIES I
(a California limited partnership)
Registrant

Del Taco LLC
General Partner

Date: November 14, 2008	/s/ Steven L. Brake
	Steven L. Brake
	Treasurer

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EXHIBIT INDEX

Exhibits	Description
31.1	Nick Shepherd’s Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Steven L. Brake’s Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification pursuant to subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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