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 September 30, 2000


[ ] 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)

                               September 30, 2000


<TABLE>
<CAPTION>

Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $  627
   Receivables and deposits                                                     472
   Restricted escrows                                                           322
   Other assets                                                                 482
   Investment properties:
       Land                                                  $  3,738
       Buildings and related personal property                 44,099
                                                               47,837
       Less accumulated depreciation                          (29,066)       18,771
                                                                           $ 20,674
Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                          $   91
   Tenant security deposit liabilities                                          104
   Accrued property taxes                                                       273
   Other liabilities                                                            273
   Mortgage notes payable                                                    20,965

Partners' Deficit:
   General partner                                            $  (313)
   Limited partners (60,517 units
      issued and outstanding)                                    (719)       (1,032)
                                                                           $ 20,674
</TABLE>

                   See Accompanying Notes to Financial Statements

<PAGE>

b)

                           NATIONAL PROPERTY INVESTORS 7

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


<TABLE>
<CAPTION>

                                      Three Months Ended         Nine Months Ended
                                        September 30,              September 30,
                                      2000         1999          2000         1999
Revenues:
<S>                                 <C>           <C>          <C>           <C>
  Rental income                     $ 1,813       $ 1,808      $ 5,276       $ 5,405
  Other income                           99            70          284           211
     Total revenues                   1,912         1,878        5,560         5,616

Expenses:
  Operating                             681           710        2,100         2,114
  General and administrative            146            45          397           189
  Depreciation                          508           450        1,481         1,321
  Interest                              411           409        1,242         1,230
  Property taxes                        119           103          330           319
     Total expenses                   1,865         1,717        5,550         5,173

Net income                            $  47         $ 161         $ 10         $ 443

Net income allocated to
  general partner (1%)                $  --         $   2         $ --         $   4
Net income allocated to
  limited partners (99%)                 47           159           10           439

                                      $  47         $ 161         $ 10         $ 443

Net income per limited
  partnership unit                   $ 0.78        $ 2.63       $ 0.17        $ 7.25

Distributions per limited
  partnership unit                   $ 4.33        $   --      $ 47.26        $ 4.91
</TABLE>

                   See Accompanying Notes to Financial Statements


<PAGE>


c)

                           NATIONAL PROPERTY INVESTORS 7

                STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
                                   (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) capital at
   December 31, 1999                  60,517      $ (284)     $ 2,131      $ 1,847

Distributions to partners                 --         (29)      (2,860)      (2,889)

Net income for the nine months
   ended September 30, 2000               --           --          10           10

Partners' deficit at
   September 30, 2000                 60,517      $  (313)     $ (719)     $(1,032)
</TABLE>


                   See Accompanying Notes to Financial Statements


<PAGE>

d)

                           NATIONAL PROPERTY INVESTORS 7

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                   (in thousands)

<TABLE>
<CAPTION>

                                                                 Nine Months Ended
                                                                   September 30,
                                                                  2000         1999
Cash flows from operating activities:
<S>                                                               <C>          <C>
  Net income                                                      $  10        $ 443
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation                                                  1,481        1,321
    Amortization of loan costs                                       70           83
    Change in accounts:
      Receivables and deposits                                     (135)          48
      Other assets                                                  (30)         (62)
      Accounts payable                                              (75)          45
      Tenant security deposit liabilities                            (3)         (12)
      Accrued property taxes                                        206          (31)
      Other liabilities                                             (28)          (8)

       Net cash provided by operating activities                  1,496        1,827

Cash flows from investing activities:
  Property improvements and replacements                           (822)        (523)
  Net withdrawals from (deposits to) restricted escrows             125          (49)

       Net cash used in investing activities                       (697)        (572)

Cash flows from financing activities:
  Payments on mortgage note payable                                 (60)         (30)
  Loan costs paid                                                   (16)          --
  Distributions to partners                                      (2,889)        (300)

       Net cash used in financing activities                     (2,965)        (330)

Net (decrease) increase in cash and cash equivalents             (2,166)         925

Cash and cash equivalents at beginning of period                  2,793        1,074

Cash and cash equivalents at end of period                       $  627      $ 1,999

Supplemental disclosure of cash flow information:
  Cash paid for interest                                        $ 1,145      $ 1,144
</TABLE>

                   See Accompanying Notes to Financial Statements


<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"),  all  adjustments  (consisting of normal  recurring  accruals)
considered  necessary  for a fair  presentation  have been  included.  Operating
results for the three and nine month  periods  ended  September 30, 2000 are not
necessarily  indicative  of the results that may be expected for the fiscal year
ending  December  31,  2000.  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, 1999.

Note B - Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment  Investment and Management Company  ("AIMCO"),  a publicly
traded real estate investment trust, with AIMCO being the surviving  corporation
(the "Insignia Merger").  As a result, AIMCO acquired 100% ownership interest in
the Managing General Partner. The Managing General Partner does not believe that
this  transaction  has had or will have a  material  effect on the  affairs  and
operations of the Partnership.

Note C - 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 nine month periods ended September 30, 2000 and 1999:

                                                                  2000      1999
                                                                  (in thousands)

 Property management fees (included in operating expenses)        $272      $285
 Reimbursement for services of affiliates (included in
   investment properties and general and administrative
   expenses)                                                       193       139
 Non-accountable reimbursement (included in general and
   administrative expenses)                                         91        --
 Partnership management fee (included in general and
   administrative expenses)                                         40        --

During the nine months  ended  September  30, 2000 and 1999,  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
$272,000 and $285,000  for the nine months  ended  September  30, 2000 and 1999,
respectively.

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $193,000 and
$139,000 for the nine months ended September 30, 2000 and 1999, 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  $91,000 in reimbursements for the nine months ended September 30,
2000.  The  Managing  General  Partner  was not  entitled  to  receive a similar
reimbursement during the nine months ended September 30, 1999 because there were
no distributions from operations.

For managing the affairs of the Partnership, the Managing General Partner of the
Partnership  is entitled to receive a  partnership  management  fee.  The fee is
equal to 4% of the  Partnership's  adjusted cash from operations,  as defined in
the Partnership  Agreement,  in any year, provided that 50% of the fee shall not
be paid until the Partnership has distributed to the limited  partners  adjusted
cash from operations in such year which is equal to 5% of the limited  partners'
adjusted invested capital, as defined,  on a non-cumulative  basis. In addition,
50% of the fee shall not be paid until the  Partnership  has  distributed to the
limited partners adjusted cash from operations in such year which is equal to 8%
of the limited partners'  adjusted  invested capital on a non-cumulative  basis.
The fee shall be paid when adjusted cash from  operations is  distributed to the
limited partners.  The Managing General Partner was paid  approximately  $40,000
during the nine months  ended  September  30, 2000 for such fees.  The  Managing
General Partner was not entitled to receive a similar  reimbursement  during the
nine months ended September 30, 1999,  because there were no distributions  from
operations.

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, be
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  39,584.33   limited
partnership  units in the  Partnership  representing  65.41% 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 65.41%
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 units holders.  Except
for the  foregoing,  no other  limitations  are imposed on Insignia  Properties,
L.P.'s right to vote each Unit acquired.

Note D - Distributions

During the nine months ended  September 30, 2000, the  Partnership  declared and
paid distributions of approximately $2,889,000  (approximately $2,860,000 to the
limited  partners  or  $47.26  per  limited   partnership  unit)  consisting  of
approximately  $2,004,000  (approximately  $1,984,000 to the limited partners or
$32.78 per limited  partnership  unit) of cash from operations and approximately
$885,000  (approximately  $876,000 to the limited partners or $14.48 per limited
partnership  unit) of cash from the refinance  proceeds of The Pines  Apartments
and from refinancing proceeds in prior years.  Subsequent to September 30, 2000,
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.  A  distribution  of  approximately
$300,000  (approximately  $297,000 to the limited  partners or $4.91 per limited
partnership  unit) from refinancing  proceeds in prior years was paid during the
nine months ended September 30, 1999.

Note E - Refinancing of Mortgage Note Payable

On December 13, 1999, the  Partnership  refinanced the mortgage  encumbering The
Pines  Apartments.   The  refinancing  replaced  indebtedness  of  approximately
$3,406,000 with a new mortgage in the amount of $4,225,000. The interest rate on
the new  mortgage is 7.97% as compared to 8.56% on the  previous  debt.  The new
loan which  matures on January 1, 2020 requires  monthly  principal and interest
payments and is being amortized over 20 years. Total capitalized loan costs were
approximately  $88,000 during the year ended December 31, 1999.  Additional loan
costs of  approximately  $16,000 were  capitalized  during the nine months ended
September 30, 2000.

Note F - Segment Reporting

Description  of the types of products  and  services  from which the  reportable
segment  derives its  revenues:  The  Partnership  has one  reportable  segment:
residential properties.  The Partnership's residential property segment consists
of five apartment  complexes  located in the Southeast.  The  Partnership  rents
apartment units to tenants for terms that are typically twelve months or less.

Measurement  of segment profit or loss: The  Partnership  evaluates  performance
based on segment profit (loss) before  depreciation.  The accounting policies of
the reportable  segment are the same as those of the Partnership as described in
the  Partnership's  Annual  Report on Form  10-KSB  for the  fiscal  year  ended
December 31, 1999.
Note F - Segment Reporting (continued)

Factors management used to identify the enterprise's  reportable  segments:  The
Partnership's  reportable  segment is investment  properties  that offer similar
products and  services.  Although each of the  investment  properties is managed
separately,  they have been aggregated into one segment as they provide services
with similar types of products and customers.

Segment  information  for the three and nine month periods  ended  September 30,
2000 and 1999, is shown in the tables below (in  thousands).  The "Other" column
includes  partnership  administration  related  items and income and expense not
allocated to the reportable segment.

<TABLE>
<CAPTION>

    Three Months Ended September 30, 2000      Residential      Other        Totals

<S>                                              <C>             <C>        <C>
Rental income                                    $ 1,813         $  --      $ 1,813
Other income                                          98             1           99
Interest expense                                     411            --          411
Depreciation                                         508            --          508
General and administrative expense                    --           146          146
Segment profit (loss)                                192          (145)          47


    Nine Months Ended September 30, 2000       Residential      Other        Totals

Rental income                                    $ 5,276         $  --      $ 5,276
Other income                                         266            18          284
Interest expense                                   1,242            --        1,242
Depreciation                                       1,481            --        1,481
General and administrative expense                    --           397          397
Segment profit (loss)                                389          (379)          10
Total assets                                      20,523           151       20,674
Capital expenditures for investment
  properties                                         822            --          822


    Three Months Ended September 30, 1999      Residential      Other        Totals

Rental income                                    $ 1,808         $  --      $ 1,808
Other income                                          69             1           70
Interest expense                                     409            --          409
Depreciation                                         450            --          450
General and administrative expense                    --            45           45
Segment profit (loss)                                205           (44)         161


    Nine Months Ended September 30, 1999      Residential       Other       Totals

Rental income                                   $ 5,405         $   --       $ 5,405
Other income                                        203              8          211
Interest expense                                  1,230             --        1,230
Depreciation                                      1,321             --        1,321
General and administrative expense                   --            189          189
Segment profit (loss)                               624           (181)         443
Total assets                                     22,408            196       22,604
Capital expenditures for investment
  properties                                         523            --          523
</TABLE>

Note G - 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 the acquisition of interests in certain general partner
entities by Insignia Financial Group, Inc. and entities which were, at one time,
affiliates of Insignia; past tender offers by the Insignia affiliates to acquire
limited  partnership  units;  the  management  of  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  have 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 final 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. The Court is considering applications for lead
counsel and has  currently  scheduled a hearing on the matter for  November  20,
2000. 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.

<PAGE>

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 nine month periods ended September 30, 2000 and 1999:

                                                   Average Occupancy
                                                    2000       1999

      Fairway View II Apartments                    93%        96%
         Baton Rouge, Louisiana
      The Pines Apartments                          97%        96%
         Roanoke, Virginia
      Patchen Place Apartments                      92%        93%
         Lexington, Kentucky
      Northwoods I and II Apartments                92%        95%
         Pensacola, Florida
      South Point Apartments                        91%        93%
         Durham, North Carolina

The Managing  General  Partner  attributes  the decrease in occupancy at Fairway
View II Apartments to tenants temporarily moving in during the first nine months
of 1999  because  of a fire at a  neighboring  complex  owned  by an  affiliated
Partnership,  which inflated occupancy for the period and to students moving out
due to a local  employer no longer  offering  an intern  program.  The  Managing
General  Partner  attributes  the decrease in  occupancy at  Northwoods I and II
Apartments to a current road expansion project. Traffic issues and road barriers
have impacted new prospect traffic as well as the property's curb appeal.

Results of Operations

The  Registrant's  net income for the nine months ended  September  30, 2000 was
approximately  $10,000 compared to net income of approximately  $443,000 for the
nine months ended September 30, 1999. The  Registrant's net income for the three
months ended  September  30, 2000 was  approximately  $47,000 as compared to net
income of approximately  $161,000 for the three months ended September 30, 1999.
The  decrease  in net income for the nine  months  ended  September  30, 2000 as
compared  to the  comparable  period  in 1999  was due to a  decrease  in  total
revenues and an increase in total  expenses.  The decrease in net income for the
three month period ended September 30, 2000 as compared to the comparable period
in 1999 was due to an increase in total expenses  which was partially  offset by
an increase in total  revenues.  Total  revenues  decreased  for the nine months
ended  September 30, 2000 due to a decrease in rental income which was partially
offset by an increase in other income.  Total  revenues  increased for the three
month period ended  September  30, 2000 due to an increase in rental  income and
other income.  Rental income  decreased for the nine months ended  September 30,
2000 primarily due to decreased  occupancy at Fairway View II,  Northwoods I and
II, Patchen Place, and South Point Apartments,  as well as increased concessions
at  Fairway  View II,  South  Point,  and  Northwoods  I and II  Apartments  and
increased  bad  debt  expense  at  all of the  Partnership's  properties.  These
decreases  were  partially   offset  by  increased   rental  rates  at  all  the
Partnership's  properties.  Rental  income  increased for the three months ended
September 30, 2000  primarily due to increased  average  rental rates at Patchen
Place and South Point  Apartments  as well as decreased  concessions  at Patchen
Place  Apartments.  The  increase  in other  income for the three and nine month
periods  ended  September  30, 2000 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  2000  and  increased  telephone  commissions
primarily at Fairway View II Apartments and Northwoods Apartments.

Total expenses  increased for the three and nine months ended September 30, 2000
as compared to the comparable  periods in 1999 due to increases in  depreciation
expense and general and administrative expenses.  Depreciation expense increased
due to property  improvements and replacements  completed during the last twelve
months  which are now being  depreciated.  General and  administrative  expenses
increased  primarily  due to  fees  paid  to the  Managing  General  Partner  in
connection  with the  distributions  from operations made during the nine months
ended  September  30, 2000.  For the nine months ended  September  30, 1999,  no
similar  fees were paid  because no  distributions  were paid during this period
from operations.  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.
Included in general and  administrative  expenses at both September 30, 2000 and
1999, are management  reimbursements  to the Managing  General  Partner  allowed
under the Partnership Agreement.  Costs associated with the quarterly and annual
communications  with  investors  and  regulatory  agencies  and the annual audit
required by the Partnership Agreement are also included.

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  September  30,  2000,  the  Partnership  had cash and  cash  equivalents  of
approximately $627,000 as compared to approximately  $1,999,000 at September 30,
1999. Cash and cash equivalents  decreased by approximately  $2,166,000 from the
Partnership's  year ended December 31, 1999 due to  approximately  $2,965,000 of
cash used in financing  activities  and  approximately  $697,000 of cash used in
investing  activities,  which more than offset approximately  $1,496,000 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 partially  offset by  withdrawals  from escrow  accounts
maintained by the mortgage lender.  The Partnership  invests its working capital
reserves in money market 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 nine months ended  September  30,  2000,  the  Partnership  completed
approximately  $105,000 of budgeted and  non-budgeted  capital  improvements  at
Fairway  View  II,  consisting  primarily  of  carpet  and  vinyl  replacements,
structural  improvements,  and clubhouse  renovations.  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  $82,000  for  capital  improvements,
consisting  primarily of air conditioning unit replacement,  appliances,  carpet
and vinyl replacements, and structural improvements. 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 nine months ended  September  30,  2000,  the  Partnership  completed
approximately  $116,000 of budgeted and non-budgeted capital improvements at The
Pines,  consisting  primarily of carpet replacement,  parking area improvements,
cabinet  upgrades,  and swimming pool upgrades.  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 $98,000 for capital improvements,  consisting primarily of parking
area  improvements,  swimming pool upgrades,  air conditioning unit replacement,
window treatments,  appliances, and carpet 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 nine months ended  September  30,  2000,  the  Partnership  completed
approximately  $206,000 of capital  improvements  at Patchen  Place,  consisting
primarily of carpet and vinyl replacement, submetering improvements, appliances,
air conditioning unit replacement, and plumbing enhancements. 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  $227,000 for capital  improvements,  consisting  primarily of air
conditioning  unit  replacement,   appliances,  carpet  and  vinyl  replacement,
structural improvements,  and plumbing 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.

Northwoods I and II

During the nine months ended  September  30,  2000,  the  Partnership  completed
approximately  $347,000 of budgeted and  non-budgeted  capital  improvements  at
Northwoods I & II,  consisting  primarily of air conditioning  unit replacement,
carpet and vinyl replacements,  exterior painting, plumbing upgrades, appliances
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  $362,000 for capital  improvements,  consisting  primarily of air
conditioning  unit  replacement,  carpet  and  vinyl  replacements,   electrical
upgrades,  major landscaping,  parking lot improvements,  appliances,  sprinkler
systems, interior decoration, and plumbing 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.

South Point

During the nine months ended  September  30,  2000,  the  Partnership  completed
approximately $48,000 of budgeted and non-budgeted capital improvements at South
Point, consisting primarily of carpet and vinyl replacement, golf carts, cabinet
replacements,  and appliances.  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  $59,000  for  capital   improvements,   consisting  primarily  of
appliances  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.

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.

On December 13, 1999, the  Partnership  refinanced the mortgage  encumbering The
Pines  Apartments.   The  refinancing  replaced  indebtedness  of  approximately
$3,406,000 with a new mortgage in the amount of $4,225,000. The interest rate on
the new  mortgage is 7.97% as compared to 8.56% on the  previous  debt.  The new
loan which  matures on January 1, 2020 requires  monthly  principal and interest
payments and is being amortized over 20 years. Total capitalized loan costs were
approximately  $88,000 during the year ended December 31, 1999.  Additional loan
costs of  approximately  $16,000 were  capitalized  during the nine months ended
September 30, 2000.

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 $4,165,000 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 nine months ended  September 30, 2000, the  Partnership  declared and
paid distributions of approximately $2,889,000  (approximately $2,860,000 to the
limited  partners  or  $47.26  per  limited   partnership  unit)  consisting  of
approximately  $2,004,000  (approximately  $1,984,000 to the limited partners or
$32.78 per limited  partnership  unit) of cash from operations and approximately
$885,000  (approximately  $876,000 to the limited partners or $14.48 per limited
partnership  unit) of cash from the refinance  proceeds of The Pines  Apartments
and from refinancing proceeds in prior years.  Subsequent to September 30, 2000,
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.  A  distribution  of  approximately
$300,000  (approximately  $297,000 to the limited  partners or $4.91 per limited
partnership  unit) from refinancing  proceeds in prior years was paid during the
nine months ended September 30, 1999. 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 Registrant'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 2000 or
subsequent periods.

<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 the acquisition of interests in certain general partner
entities by Insignia Financial Group, Inc. and entities which were, at one time,
affiliates of Insignia; past tender offers by the Insignia affiliates to acquire
limited  partnership  units;  the  management  of  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  have 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 final 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. The Court is considering applications for lead
counsel and has  currently  scheduled a hearing on the matter for  November  20,
2000. 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:

                  Exhibit 27, Financial Data Schedule, is filed as an exhibit to
                  this report.

            b)    Reports on Form 8-K filed during the third quarter of 2000:

                  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: