UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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) April 2, 2009

DAVIDSON DIVERSIFIED REAL ESTATE II, L.P.

(Exact name of Registrant as specified in its charter)

Delaware	0-14483	62-1207077
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification Number)

55 Beattie Place

Post Office Box 1089

Greenville, South Carolina 29602

(Address of principal executive offices)

(864) 239-1000

(Issuer's telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:

[ ]   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry Into a Material Definitive Agreement

Davidson Diversified Real Estate II, L.P, a Delaware limited partnership (the “Registrant”), owns a 99.90% interest in The Trails, L.P., a South Carolina limited partnership (the “Partnership” or “Seller”).  The Partnership owns The Trails Apartments (“The Trails”), a 248-unit apartment complex located in Nashville, Tennessee.  On April 2, 2009 (the “Effective Date”), the Seller entered into a Purchase and Sale Contract  (the “Purchase Agreement”) with a third party, Freeman Webb Investments, Inc.,  a Tennessee corporation (the “Purchaser”), to sell The Trails to the Purchaser for a total sales price of $12,300,000.

The following is a summary of the terms and conditions of the Purchase Agreement, which summary is qualified in its entirety by reference to the Purchase Agreement, a copy of which is attached hereto as an exhibit.

PURCHASE PRICE.  The total purchase price is $12,300,000, subject to certain prorations and adjustments at the closing.  The Purchaser delivered an initial deposit (the “Initial Deposit”) of $123,000 to Fidelity National Title Insurance Company (“Escrow Agent”).

FEASIBILITY PERIOD.  The feasibility period ends on May 17, 2009. Within two days after the expiration of the feasibility period, the Purchaser is required to deliver an additional deposit of $123,000. If the Purchaser fails to notify the Seller in writing of its intent to terminate the contract prior to the end of the feasibility period, the Initial Deposit will become non-refundable.

CLOSING.  The expected closing date of the transaction is June 17, 2009. The Seller has the option to extend the closing date to June 30, 2009 by delivering written notice to the Purchaser prior to the expiration of the feasibility period. The closing is also subject to customary closing conditions and deliveries.

COSTS AND FEES.  The Purchaser will pay any transfer indebtedness, mortgage assumption, sales, use, gross receipts or similar taxes, any premiums or fees required to be paid by the Purchaser with respect to the title policy and one-half of the customary closing costs of the Escrow Agent. The Seller will pay the base premium for the title policy and the costs of the issuance of the title commitment, if any, the cost of recording any instruments required to discharge any liens or encumbrances against the property and one-half of the customary closing costs of the Escrow Agent.

REPRESENTATIONS AND WARRANTIES.  The Purchaser and the Seller each made limited representations and warranties to the other.

RISK OF LOSS. The risk of loss or damage to The Trails by reason of any insured or uninsured casualty during the period through and including the closing date equal to or less than $500,000 will be borne by the Seller. The Seller must maintain, in full force and effect until the closing date, all existing insurance coverage on The Trails.

ASSIGNMENT.  With the exception of an assignment to an affiliate of the Purchaser, the Purchase Agreement is not assignable by the Purchaser without first obtaining the prior written approval of the Seller.

DEFAULTS AND REMEDIES.  If the Purchaser defaults on its obligations to deliver when required any required deposits, the purchase price or any other specified deliveries, the Purchaser will forfeit its deposits to the Seller, and neither party will be obligated to proceed with the purchase and sale.  The Seller expressly waived the remedies of specific performance and additional damages for any such defaults by the Purchaser.

If the Seller, prior to the closing, defaults in its representations, warranties, covenants, or obligations, the Purchaser has the option of (i) terminating the Purchase Agreement, receiving a return of its deposits, and recovering, as its sole recoverable damages its documented direct and actual out-of-pocket expenses and costs up to $50,000 or (ii) subject to certain conditions, seeking specific performance of the Seller’s obligation to deliver the deed pursuant to the Purchase Agreement.

Item 9.01   Financial Statements and Exhibits

(d)   Exhibit

10.21       Purchase and Sale Contract between The Trails, L.P., a South Carolina limited partnership, and Freeman Webb Investments, Inc., a Tennessee corporation, dated April 2, 2009.*

*Schedules and supplemental materials to the exhibit have been omitted but will be provided to the Securities and Exchange Commission upon request.

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.

DAVIDSON DIVERSIFIED REAL ESTATE II, L.P.

By:  Davidson Diversified Properties,Inc.

Managing General Partner

By:  /s/Stephen B. Waters

Stephen B. Waters

Vice President

 Date:    April 8, 2009