FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
                        Quarterly or Transitional Report



                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                   For the quarterly period ended March 31, 2001


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


                For the transition period from _________to _________

                         Commission file number 0-13454


                           NATIONAL PROPERTY INVESTORS 7
         (Exact name of small business issuer as specified in its charter)



         California                                         13-3230613
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)

                     55 Beattie Place, Post Office Box 1089
                        Greenville, South Carolina 29602
                      (Address of principal executive offices)

                                 (864) 239-1000
                           (Issuer's telephone number)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 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 X No___



<PAGE>



                         PART I - FINANCIAL INFORMATION


ITEM 1.     FINANCIAL STATEMENTS

a)

                           NATIONAL PROPERTY INVESTORS 7

                                  BALANCE SHEET
                                   (Unaudited)
                        (in thousands, except per unit data)

                                 March 31, 2001

<TABLE>
<CAPTION>


Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $  493
   Receivables and deposits                                                     219
   Restricted escrows                                                           376
   Other assets                                                                 473
   Investment properties:
       Land                                                  $  3,738
       Buildings and related personal property                 44,352
                                                               48,090
       Less accumulated depreciation                          (30,088)       18,002
                                                                           $ 19,563
Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                          $  149
   Tenant security deposit liabilities                                          102
   Accrued property taxes                                                       100
   Other liabilities                                                            277
   Mortgage notes payable                                                    20,920

Partners' Deficit:
   General partner                                            $ (323)
   Limited partners (60,517 units
      issued and outstanding)                                  (1,662)       (1,985)
                                                                           $ 19,563


                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>




b)

                           NATIONAL PROPERTY INVESTORS 7

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)
                        (in thousands, except per unit data)

<TABLE>
<CAPTION>


                                                               Three Months Ended
                                                                   March 31,
                                                               2001          2000
Revenues:
<S>                                                           <C>           <C>
   Rental income                                              $1,828        $1,751
   Other income                                                   85            73
       Total revenues                                          1,913         1,824

Expenses:
   Operating                                                     777           704
   General and administrative                                    154            91
   Depreciation                                                  514           484
   Interest                                                      415           420
   Property taxes                                                104           106
       Total expenses                                          1,964         1,805

Net (loss) income                                             $ (51)         $ 19

Net (loss) income allocated to general partner (1%)            $ (1)         $ --

Net (loss) income allocated to limited partners (99%)            (50)           19

                                                              $ (51)         $ 19

Net (loss) income per limited partnership unit                $(0.83)       $ 0.31

Distributions per limited partnership unit                    $11.80        $19.96

                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>


c)

                           NATIONAL PROPERTY INVESTORS 7

                    STATEMENT OF CHANGES IN PARTNERS' DEFICIT
                                   (Unaudited)
                        (in thousands, except per unit data)

<TABLE>
<CAPTION>


                                     Limited
                                   Partnership    General     Limited
                                      Units       Partner     Partners      Total

<S>                                   <C>           <C>       <C>          <C>
Original capital contributions        60,517        $ 1       $30,259      $30,260

Partners' deficit at
   December 31, 2000                  60,517      $ (315)      $ (898)     $(1,213)

Distributions to partners                 --           (7)       (714)        (721)

Net loss for the three months
   ended March 31, 2001                   --           (1)        (50)         (51)

Partners' deficit at
   March 31, 2001                     60,517      $ (323)     $(1,662)     $(1,985)


                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

d)

                           NATIONAL PROPERTY INVESTORS 7

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                   (in thousands)

<TABLE>
<CAPTION>

                                                                 Three Months Ended
                                                                       March 31,
                                                                  2001        2000
Cash flows from operating activities:
<S>                                                              <C>          <C>
  Net (loss) income                                              $  (51)      $   19
  Adjustments to reconcile net (loss) income to net cash
   provided by operating activities:
     Depreciation                                                   514          484
     Amortization of loan costs                                      25           28
     Change in accounts:
      Receivables and deposits                                      (22)         213
      Other assets                                                  (47)         (23)
      Accounts payable                                                7          (59)
      Tenant security deposit liabilities                             2           (4)
      Accrued property taxes                                         48           18
      Other liabilities                                             (10)         (28)

        Net cash provided by operating activities                   466          648

Cash flows from investing activities:
  Property improvements and replacements                            (94)        (303)
  Net withdrawals from (deposits to) restricted escrows               1          (11)

        Net cash used in investing activities                       (93)        (314)

Cash flows from financing activities:
  Payments on mortgage note payable                                 (23)         (15)
  Loan costs paid                                                    (7)         (16)
  Distributions to partners                                        (721)      (1,220)

        Net cash used in financing activities                      (751)      (1,251)

Net decrease in cash and cash equivalents                          (378)        (917)

Cash and cash equivalents at beginning of period                    871        2,793

Cash and cash equivalents at end of period                       $ 493       $ 1,876

Supplemental disclosure of cash flow information:
  Cash paid for interest                                         $ 390        $ 334

                   See Accompanying Notes to Financial Statements
</TABLE>


<PAGE>

e)

                           NATIONAL PROPERTY INVESTORS 7

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


Note A - Basis of Presentation

The accompanying unaudited financial statements of National Property Investors 7
(the  "Partnership"  or  "Registrant")  have been  prepared in  accordance  with
generally accepted accounting  principles for interim financial  information and
with  the  instructions  to Form  10-QSB  and Item  310(b)  of  Regulation  S-B.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of NPI Equity  Investments,  Inc. (the "Managing General Partner"
or "NPI Equity"),  an affiliate of Apartment  Investment and Management  Company
("AIMCO"),  all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.  Operating results for the
three month period ended March 31, 2001 are not  necessarily  indicative  of the
results that may be expected for the fiscal year ending  December 31, 2001.  For
further  information,  refer to the financial  statements and footnotes  thereto
included in the  Partnership's  Annual  Report on Form 10-KSB for the year ended
December 31, 2000.

Segment Reporting: Statement of Financial Accounting Standards ("SFAS") No. 131,
"Disclosure about Segments of an Enterprise and Related Information" established
standards for the way that public business  enterprises report information about
operating  segments  in annual  financial  statements  and  requires  that those
enterprises  report selected  information  about  operating  segments in interim
financial reports.  It also establishes  standards for related disclosures about
products and services, geographic areas, and major customers. As defined in SFAS
No. 131, the Partnership has only one reportable  segment.  The Managing General
Partner  believes  that  segment-based  disclosures  will not  result  in a more
meaningful presentation than the financial statements as currently presented.

Note B - Transactions with Affiliated Parties

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  The  Partnership  Agreement  provides  for payments to
affiliates for services and as  reimbursement  of certain  expenses  incurred by
affiliates on behalf of the Partnership.

The  following  payments  were  made to the  Managing  General  Partner  and its
affiliates during the three month periods ended March 31, 2001 and 2000:

                                                                  2001      2000
                                                                  (in thousands)

 Property management fees (included in operating expenses)        $ 93      $ 90
 Reimbursement for services of affiliates (included in
   investment properties and general and administrative
   expenses)                                                        63        43
 Non-accountable reimbursement (included in general and
   administrative expenses)                                         71        30

During  the three  months  ended  March 31,  2001 and  2000,  affiliates  of the
Managing  General Partner were entitled to receive 5% of gross receipts from all
of  the  Partnership's   properties  as  compensation  for  providing   property
management  services.  The  Registrant  paid  to such  affiliates  approximately
$93,000  and  $90,000  for the  three  months  ended  March  31,  2001 and 2000,
respectively.

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting  to  approximately  $63,000 and
$43,000 for the three months ended March 31, 2001 and 2000, respectively.

For services relating to the  administration of the Partnership and operation of
Partnership  properties,  the  Managing  General  Partner is entitled to receive
payment for  non-accountable  expenses up to a maximum of $150,000 per year from
distributions from operations,  based upon the number of Partnership units sold,
subject  to  certain   limitations.   The  Managing   General  Partner  received
approximately  $71,000 and $30,000 in reimbursements  for the three months ended
March 31, 2001 and 2000, respectively.

The Managing General Partner has extended to the Partnership a line of credit of
up to $500,000. Loans under the line of credit will have a term of 365 days, are
unsecured  and bear  interest at the rate of 2% per annum in excess of the prime
rate announced from time to time by Chase Manhattan Bank, N.A. The maturity date
of such  borrowing  will be  accelerated in the event of: (i) the removal of the
Managing  General  Partner  (whether  or  not  For  Cause);  (ii)  the  sale  or
refinancing of a property by the  Partnership;  or (iii) the  liquidation of the
Partnership. At the present time, the Partnership has no outstanding amounts due
under this line of credit.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,   AIMCO  and  its  affiliates   currently  own  40,102.67   limited
partnership  units in the  Partnership  representing  66.27% of the  outstanding
units.  A number of these units were acquired  pursuant to tender offers made by
affiliates of the Managing  General  Partner,  AIMCO, or its  affiliates.  It is
possible that AIMCO or its affiliates will make one or more additional offers to
acquire additional limited partnership  interests in the Partnership for cash or
in  exchange  for  units  in the  operating  partnership  of  AIMCO.  Under  the
Partnership Agreement,  unitholders holding a majority of the Units are entitled
to take action with respect to a variety of matters, which would include without
limitation, voting on certain amendments to the Partnership Agreement and voting
to remove the Managing General  Partner.  As a result of its ownership of 66.27%
of the  outstanding  units,  AIMCO is in a  position  to  influence  all  voting
decisions with respect to the Registrant. When voting on matters, AIMCO would in
all likelihood vote the Units it acquired in a manner  favorable to the interest
of the Managing  General Partner because of their  affiliation with the Managing
General Partner.  However,  DeForest Ventures II L.P., from whom AIMCO,  through
its merger with Insignia,  acquired  25,399 Units  (approximately  41.97%),  had
agreed for the benefit of  non-tendering  unit  holders,  that it would vote its
Units: (i) against any increase in compensation  payable to the Managing General
Partner or to affiliates;  and (ii) on all other matters  submitted by it or its
affiliates,  in proportion  to the votes cast by all other unit holders.  Except
for the foregoing, no other limitations are imposed on AIMCO's or its affiliates
right to vote each Unit acquired.

Note C - Distributions

During the three months ended March 31, 2001, the Partnership  declared and paid
distributions from operations of approximately $721,000  (approximately $714,000
to the limited partners or $11.80 per limited  partnership unit).  Subsequent to
March  31,  2001,  the   Partnership   declared  and  paid  a  distribution   of
approximately $290,000  (approximately $287,000 to the limited partners or $4.74
per limited  partnership  unit) consisting of cash from  operations.  During the
three  months  ended  March  31,  2000,  the  Partnership  declared  and  paid a
distribution  of  approximately  $1,220,000  (approximately  $1,208,000  to  the
limited  partners  or  $19.96  per  limited   partnership  unit)  consisting  of
approximately $335,000  (approximately $332,000 to the limited partners or $5.49
per limited partnership unit) of cash from operations and approximately $885,000
(approximately   $876,000  to  the  limited   partners  or  $14.47  per  limited
partnership  unit) of cash from the refinance  proceeds of The Pines  Apartments
and from refinancing proceeds in prior years.

Note D - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial  Group,  Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the  Partnership,  its Managing  General Partner and several of their affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging,  among other things,  the  acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc.  ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited  partnership units;  management of
the  partnerships  by the  Insignia  affiliates;  and the Insignia  Merger.  The
plaintiffs  seek  monetary  damages and  equitable  relief,  including  judicial
dissolution of the  Partnership.  On June 25, 1998, the Managing General Partner
filed a motion  seeking  dismissal of the action.  In lieu of  responding to the
motion, the plaintiffs filed an amended complaint.  The Managing General Partner
filed demurrers to the amended complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Managing  General  Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Managing  General  Partner  and its  affiliates  filed a
demurrer to the third amended  complaint.  The demurrer is scheduled to be heard
on May 14,  2001.  The Court has also  scheduled a hearing on a motion for class
certification  for August 27, 2001.  Plaintiffs must file their motion for class
certification no later than June 15, 2001. The Managing General Partner does not
anticipate  that  costs  associated  with  this  case  will be  material  to the
Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.


ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The  matters  discussed  in this Form  10-QSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions,   competitive  and  regulatory   matters,   etc.)  detailed  in  the
disclosures  contained  in this  Form  10-QSB  and the  other  filings  with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussion of the  Registrant's  business and results of  operations,  including
forward-looking  statements  pertaining  to such  matters,  does not  take  into
account the effects of any changes to the  Registrant's  business and results of
operation.  Accordingly,  actual  results  could  differ  materially  from those
projected in the forward-looking  statements as a result of a number of factors,
including those identified herein.

The Partnership's investment properties consist of five apartment complexes. The
following  table sets forth the average  occupancy of the properties for each of
the three month periods ended March 31, 2001 and 2000:

                                                   Average Occupancy
                                                    2001       2000

      Fairway View II Apartments                    91%        93%
         Baton Rouge, Louisiana
      The Pines Aparments                           96%        97%
         Roanoke, Virginia
      Patchen Place Apartments                      91%        93%
         Lexington, Kentucky
      Northwoods I and II Apartments                95%        90%
         Pensacola, Florida
      South Point Apartments                        93%        89%
         Durham, North Carolina

The Managing General Partner  attributes the increase in occupancy at Northwoods
I and II  Apartments  to the  completion of a road  expansion  project.  Traffic
issues and road  barriers  were  eliminated,  thereby  increasing  new  prospect
traffic as well as the  property's  curb appeal.  The Managing  General  Partner
attributes  the  increase in occupancy  at South Point  Apartments  to increased
marketing efforts.

Results of Operations

The  Registrant's  net  loss for the  three  months  ended  March  31,  2001 was
approximately  $51,000 compared to net income of  approximately  $19,000 for the
three  months  ended March 31,  2000.  The  decrease in net income was due to an
increase in total  expenses  which was partially  offset by an increase in total
revenues. Total revenues increased for the three months ended March 31, 2001 due
to an increase in rental income,  and to a lesser  extent,  an increase in other
income.  Rental income increased primarily due to increased average rental rates
at all of the  Partnership's  investment  properties and increased  occupancy at
Northwoods I and II and South Point Apartments, which more than offset decreased
occupancy  at Fairway  View II, The Pines,  and  Patchen  Place  Apartments.  In
addition,  concessions  decreased  at  Northwoods  I  and  II  and  South  Point
Apartments  which more than  offset  increased  concessions  at Fairway  View II
Apartments.  The  increase in other income was  primarily  due to an increase in
interest income as a result of higher average cash balances in interest  bearing
accounts held by the  Partnership  during 2001 and increased  corporate  housing
revenue at The Pines Apartments.

Total  expenses  increased  for the three  months  ended  March 31,  2001 due to
increases in operating,  depreciation,  and general and administrative expenses.
Operating  expenses  increased  primarily  due to increased gas bills at Patchen
Place and The Pines  Apartments  and  increased  maintenance  salaries  at South
Point,  Northwoods  I and II,  and The Pines  Apartments.  Depreciation  expense
increased due to property  improvements  and  replacements  completed during the
last twelve months. General and administrative  expenses increased primarily due
to increased fees paid to the Managing  General  Partner in connection  with the
distributions from operations made during the three months ended March 31, 2001.
General and  administrative  expenses  also  increased due to an increase in the
cost of  services  included in the  management  reimbursements  to the  Managing
General  Partner as allowed under the  Partnership  Agreement.  Also included in
general and  administrative  expenses at both March 31, 2001 and 2000, are costs
associated  with the  quarterly  and annual  communications  with  investors and
regulatory agencies and the annual audit required by the Partnership Agreement.

As part of the ongoing  business plan of the  Partnership,  the Managing General
Partner  monitors  the  rental  market  environment  of each  of its  investment
properties  to assess  the  feasibility  of  increasing  rents,  maintaining  or
increasing  occupancy  levels and protecting the  Partnership  from increases in
expense.  As part of this plan, the Managing General Partner attempts to protect
the  Registrant  from the burden of  inflation-related  increases in expenses by
increasing rents and maintaining a high overall occupancy level. However, due to
changing market  conditions,  which can result in the use of rental  concessions
and  rental  reductions  to  offset  softening  market  conditions,  there is no
guarantee that the Managing General Partner will be able to sustain such a plan.

Liquidity and Capital Resources

At  March  31,  2001,  the  Partnership   had  cash  and  cash   equivalents  of
approximately  $493,000  as compared to  approximately  $1,876,000  at March 31,
2000. Cash and cash  equivalents  decreased by  approximately  $378,000 from the
Partnership's year ended December 31, 2000 due to approximately $751,000 of cash
used in financing activities and approximately $93,000 of cash used in investing
activities,  which more than offset  approximately  $466,000 of cash provided by
operating  activities.  Cash used in financing  activities  consisted of partner
distributions and, to a lesser extent, the payment of loan costs and payments of
principal made on the mortgage  encumbering The Pines  Apartments.  Cash used in
investing activities  consisted of property  improvements and replacements which
was  slightly  offset by  withdrawals  from escrow  accounts  maintained  by the
mortgage  lender.  The  Partnership  invests  its  working  capital  reserves in
interest bearing accounts.

The Managing  General Partner has extended to the Partnership a $500,000 line of
credit.  The  Partnership  has no  outstanding  amounts  due under  this line of
credit. Based on present plans, the Managing General Partner does not anticipate
the need to borrow  against  the line of credit in the near  future.  Other than
cash and cash equivalents,  the line of credit is the Partnership's  only unused
source of liquidity.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the various  properties  to  adequately  maintain  the
physical  assets and other  operating needs of the Registrant and to comply with
Federal, state and local legal and regulatory requirements. Capital improvements
for each of the Registrant's properties are detailed below.

Fairway View II

During  the  three  months  ended  March 31,  2001,  the  Partnership  completed
approximately  $19,000 of capital  improvements  at Fairway View II,  consisting
primarily of air conditioning unit replacement,  carpet and vinyl  replacements,
plumbing fixtures, and structural  improvements.  These improvements were funded
from Partnership reserves and operating cash flow. The Partnership has evaluated
the capital  improvement  needs of the  property  for the current year and, as a
result  budgeted  approximately  $56,000  for capital  improvements,  consisting
primarily of air conditioning unit replacement, appliances, carpet replacements,
and swimming pool upgrades.  Additional  improvements may be considered and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.

The Pines

During  the  three  months  ended  March 31,  2001,  the  Partnership  completed
approximately $13,000 of capital improvements at The Pines, consisting primarily
of carpet and vinyl  replacements,  water heater  replacements,  and appliances.
These  improvements  were funded from operating cash flow. The  Partnership  has
evaluated  the capital  improvement  needs of the  property for the current year
and, as a result  budgeted  approximately  $191,000  for  capital  improvements,
consisting  primarily of air conditioning  unit  replacement,  cabinet upgrades,
appliances,  interior  decoration and carpet and vinyl  replacement.  Additional
improvements may be considered and will depend on the physical  condition of the
property as well as replacement  reserves and anticipated cash flow generated by
the property.

Patchen Place

During  the  three  months  ended  March 31,  2001,  the  Partnership  completed
approximately  $24,000 of capital  improvements  at  Patchen  Place,  consisting
primarily  of  carpet  replacements,   air  conditioning  unit  replacement  and
structural  improvements.  These  improvements  were funded from  operating cash
flow.  The  Partnership  has  evaluated  the  capital  improvement  needs of the
property for the current year and, as a result budgeted  approximately  $153,000
for  capital   improvements,   consisting   primarily   of  water   conservation
improvements and appliances.  Additional improvements may be considered and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.

Northwoods I and II

During  the  three  months  ended  March 31,  2001,  the  Partnership  completed
approximately  $32,000 of capital  improvements at Northwoods I & II, consisting
primarily of carpet and vinyl replacements,  appliances,  plumbing fixtures, air
conditioning unit replacement,  and interior decoration. These improvements were
funded from  Partnership  reserves and operating cash flow. The  Partnership has
evaluated  the capital  improvement  needs of the  property for the current year
and, as a result budgeted  approximately  $113,000,  consisting primarily of air
conditioning unit replacement,  carpet  replacements,  structural  improvements,
swimming  pool  improvements,   recreational  facility  upgrades,   parking  lot
improvements, appliances, interior decoration, and exterior painting. Additional
improvements may be considered and will depend on the physical  condition of the
property as well as replacement  reserves and anticipated cash flow generated by
the property.

South Point

During  the  three  months  ended  March 31,  2001,  the  Partnership  completed
approximately  $6,000  of  capital  improvements  at  South  Point,   consisting
primarily of carpet replacements.  These improvements were funded from operating
cash flow. The  Partnership has evaluated the capital  improvement  needs of the
property for the current year and, as a result budgeted  approximately  $50,000,
consisting  primarily of cabinet  upgrades and carpet  replacements.  Additional
improvements may be considered and will depend on the physical  condition of the
property as well as replacement  reserves and anticipated cash flow generated by
the property.

The additional  capital  improvements will be incurred only if cash is available
from operations or from Partnership  reserves.  To the extent that such budgeted
capital improvements are completed,  the Partnership's  distributable cash flow,
if any, may be adversely affected at least in the short term.

The  Registrant's  current assets are thought to be sufficient for any near-term
needs  (exclusive  of capital  improvements)  of the  Registrant.  The  mortgage
indebtedness of approximately $4,120,000 encumbering The Pines is amortized over
20 years.  The mortgage  indebtedness  of $16,800,000  encumbering the remaining
properties is interest only with required balloon payments due November 1, 2003.
The Managing General Partner will attempt to refinance such indebtedness  and/or
sell the properties  prior to such maturity dates.  If the properties  cannot be
refinanced or sold for a sufficient  amount, the Registrant may risk losing such
properties through foreclosure.

During the three months ended March 31, 2001, the Partnership  declared and paid
distributions from operations of approximately $721,000  (approximately $714,000
to the limited partners or $11.80 per limited  partnership unit).  Subsequent to
March  31,  2001,  the   Partnership   declared  and  paid  a  distribution   of
approximately $290,000  (approximately $287,000 to the limited partners or $4.74
per limited  partnership  unit) consisting of cash from  operations.  During the
three  months  ended  March  31,  2000,  the  Partnership  declared  and  paid a
distribution  of  approximately  $1,220,000  (approximately  $1,208,000  to  the
limited  partners  or  $19.96  per  limited   partnership  unit)  consisting  of
approximately $335,000  (approximately $332,000 to the limited partners or $5.49
per limited partnership unit) of cash from operations and approximately $885,000
(approximately   $876,000  to  the  limited   partners  or  $14.47  per  limited
partnership  unit) of cash from the refinance  proceeds of The Pines  Apartments
and from refinancing  proceeds in prior years.  Future cash  distributions  will
depend on the levels of net cash generated from operations,  the availability of
cash reserves and the timing of debt  maturities,  refinancings  and/or property
sales. The Partnership's  distribution  policy is reviewed on a quarterly basis.
There  can  be  no  assurance,  however,  that  the  Partnership  will  generate
sufficient funds from operations after required capital expenditures,  to permit
any  additional  distributions  to its partners  during the remainder of 2001 or
subsequent periods.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,   AIMCO  and  its  affiliates   currently  own  40,102.67   limited
partnership  units in the  Partnership  representing  66.27% of the  outstanding
units.  A number of these units were acquired  pursuant to tender offers made by
affiliates of the Managing  General  Partner,  AIMCO, or its  affiliates.  It is
possible that AIMCO or its affiliates will make one or more additional offers to
acquire additional limited partnership  interests in the Partnership for cash or
in  exchange  for  units  in the  operating  partnership  of  AIMCO.  Under  the
Partnership Agreement,  unitholders holding a majority of the Units are entitled
to take action with respect to a variety of matters, which would include without
limitation, voting on certain amendments to the Partnership Agreement and voting
to remove the Managing General  Partner.  As a result of its ownership of 66.27%
of the  outstanding  units,  AIMCO is in a  position  to  influence  all  voting
decisions with respect to the Registrant. When voting on matters, AIMCO would in
all likelihood vote the Units it acquired in a manner  favorable to the interest
of the Managing  General Partner because of their  affiliation with the Managing
General Partner.  However,  DeForest Ventures II L.P., from whom AIMCO,  through
its merger with Insignia,  acquired  25,399 Units  (approximately  41.97%),  had
agreed for the benefit of  non-tendering  unit  holders,  that it would vote its
Units: (i) against any increase in compensation  payable to the Managing General
Partner or to affiliates;  and (ii) on all other matters  submitted by it or its
affiliates,  in proportion  to the votes cast by all other unit holders.  Except
for the foregoing, no other limitations are imposed on AIMCO's or its affiliates
right to vote each Unit acquired.



<PAGE>


                           PART II - OTHER INFORMATION


ITEM 1.     LEGAL PROCEEDINGS

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial  Group,  Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the  Partnership,  its Managing  General Partner and several of their affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging,  among other things,  the  acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc.  ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited  partnership units;  management of
the  partnerships  by the  Insignia  affiliates;  and the Insignia  Merger.  The
plaintiffs  seek  monetary  damages and  equitable  relief,  including  judicial
dissolution of the  Partnership.  On June 25, 1998, the Managing General Partner
filed a motion  seeking  dismissal of the action.  In lieu of  responding to the
motion, the plaintiffs filed an amended complaint.  The Managing General Partner
filed demurrers to the amended complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Managing  General  Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Managing  General  Partner  and its  affiliates  filed a
demurrer to the third amended  complaint.  The demurrer is scheduled to be heard
on May 14,  2001.  The Court has also  scheduled a hearing on a motion for class
certification  for August 27, 2001.  Plaintiffs must file their motion for class
certification no later than June 15, 2001. The Managing General Partner does not
anticipate  that  costs  associated  with  this  case  will be  material  to the
Partnership's overall operations.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

      a) Exhibits:

         None.

      b) Reports on Form 8-K filed during the three months ended March 31, 2001:

         None.




<PAGE>



                                   SIGNATURES



In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                    NATIONAL PROPERTY INVESTORS 7


                                    By:   NPI EQUITY INVESTMENTS, INC.
                                          Its Managing General Partner


                                    By:   /s/Patrick J. Foye
                                          Patrick J. Foye
                                          Executive Vice President


                                    By:   /s/Martha L. Long
                                          Martha L. Long
                                          Senior Vice President
                                          and Controller


                                    Date: