UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                               -------------------
                                   FORM 10-Q/A




[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
       EXCHANGE ACT OF 1934
       FOR THE FISCAL QUARTER ENDED JUNE 30, 1999


[ ]    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 33-55796
                             -----------------------




                     PLM EQUIPMENT GROWTH & INCOME FUND VII
             (Exact name of registrant as specified in its charter)


        CALIFORNIA                                            94-3168838
 (State or other jurisdiction of                            (I.R.S. Employer
  incorporation or organization)                            Identification No.)

 ONE MARKET, STEUART STREET TOWER
  SUITE 800, SAN FRANCISCO, CA                                 94105-1301
    (Address of principal                                      (Zip code)
     executive offices)


       Registrant's telephone number, including area code: (415) 974-1399
                             -----------------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes X No ____



<PAGE>




                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                                 BALANCE SHEETS
                 (in thousands of dollars, except unit amounts)

<TABLE>
<CAPTION>


                                                                               June 30,           December 31,
                                                                                1999                1998
                                                                           -----------------------------------
  ASSETS
  <S>                                                                      <C>                  <C>
  Equipment held for operating lease, at cost                              $      102,110       $       97,404
  Less accumulated depreciation                                                   (49,657)             (46,578)
                                                                           --------------------------------------
    Net equipment                                                                  52,453               50,826

  Cash and cash equivalents                                                         2,297                  404
  Restricted cash                                                                      --                  219
  Accounts receivable, less allowance for doubtful accounts
      of $965 in 1999 and $251 in 1998                                              1,688                1,893
  Investments in unconsolidated special-purpose entities                           21,248               22,817
  Deferred charges, net of accumulated amortization
      of $296 in 1999 and $231 in 1998                                                305                  293
  Prepaid expenses and other assets                                                    20                   85
                                                                           --------------------------------------

        Total assets                                                       $       78,011       $       76,537
                                                                           ======================================

  LIABILITIES AND PARTNERS' CAPITAL

  Liabilities:
  Accounts payable and accrued expenses                                    $          422       $          657
  Due to affiliates                                                                   533                1,318
  Lessee deposits and reserve for repairs                                           1,473                1,530
  Notes payable                                                                    23,000               23,000
                                                                           --------------------------------------
    Total liabilities                                                              25,428               26,505

  Minority Interests                                                                3,609                3,785

  Partners' capital:
  Limited partners (5,324,319 limited partnership units as of
      June 30, 1999 and 5,334,211 as of December 31, 1998)                         48,974               46,247
  General Partner                                                                      --                   --
                                                                           --------------------------------------
    Total partners' capital                                                        48,974               46,247
                                                                           --------------------------------------

        Total liabilities and partners' capital                            $       78,011       $       76,537
                                                                           ======================================

</TABLE>







                 See accompanying notes to financial statements.

<PAGE>

                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                              STATEMENTS OF INCOME
         (in thousands of dollars, except weighted-average unit amounts)
<TABLE>
<CAPTION>


                                                       For the Three Months               For the Six Months
                                                          Ended June 30,                    Ended June 30,
                                                       1999           1998               1999            1998
                                                    --------------------------------------------------------------
  REVENUES

  <S>                                               <C>            <C>               <C>           <C>
  Lease revenue                                     $   5,207      $   4,183         $  10,466     $    8,168
  Interest and other income                                20             87                60            140
  Net gain (loss) on disposition of equipment              18             (1)               4              33
                                                    --------------------------------------------------------------
      Total revenues                                    5,245          4,269            10,530           8,341
                                                    --------------------------------------------------------------

  EXPENSES

  Depreciation and amortization                         2,609          2,243             4,902           4,520
  Repairs and maintenance                                 608            526             1,239           1,064
  Equipment operating expense                             755            471             1,500             788
  Insurance expense                                       108             66               243             128
  Management fees to affiliate                            239            232               521             454
  Interest expense                                        423            422               836             832
  General and administrative expenses
        to affiliates                                     190            190               381             370
  Other general and administrative expenses               149            156               287             287
  Provision for bad debts                                 680             23               716              42
                                                    --------------------------------------------------------------
      Total expenses                                    5,761          4,329            10,625           8,485
                                                    --------------------------------------------------------------

  Minority interests                                       53             32                91              45

  Equity in net income of unconsolidated
        special-purpose entities                        5,174          2,238             7,900           7,951
                                                    --------------------------------------------------------------

  Net income                                        $   4,711      $   2,210         $   7,896     $     7,852

  PARTNERS' SHARE OF NET INCOME

  Limited partners                                  $   4,585      $   2,083         $   7,644     $     7,598
  General Partner                                         126            127               252             254
                                                    --------------------------------------------------------------

  Total                                             $   4,711      $   2,210         $   7,896     $     7,852
                                                    ==============================================================

  Net income per weighted-average
        limited partnership unit                    $    0.86      $    0.39         $    1.43     $      1.42
                                                    ==============================================================

  Cash distributions                                $   2,523      $   2,529         $   5,049     $     5,071
                                                    ==============================================================

  Cash distributions per weighted-average
        limited partnership unit                    $    0.45      $    0.45         $    0.90     $      0.90
                                                    ==============================================================

</TABLE>



                 See accompanying notes to financial statements.

<PAGE>


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                            (A LIMITED PARTNERSHIP)
                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                FOR THE PERIOD FROM DECEMBER 31 TO JUND 30, 1999
                           (in thousands of dollars)

<TABLE>
<CAPTION>

                                                             Limited              General
                                                             Partners             Partner               Total
                                                           -------------------------------------------------------

  <S>                                                      <C>                   <C>                 <C>
    Partners' capital as of December 31, 1997              $   51,062            $    --             $   51,062

  Net income                                                    5,317                507                  5,824

  Repurchase of limited partnership units                        (512)                --                   (512)
  Cash distribution                                            (9,620)              (507)               (10,127)
                                                           -------------------------------------------------------

    Partners' capital as of December 31, 1998                  46,247                 --                 46,247

  Net income                                                    7,644                252                  7,896

  Repurchase of limited partnership units                        (120)                --                   (120)

  Cash distribution                                            (4,797)              (252)                (5,049)
                                                           -------------------------------------------------------

    Partners' capital as of June 30, 1999                  $   48,974            $    --             $   48,974
                                                           =======================================================
</TABLE>









                 See accompanying notes to financial statements.



<PAGE>




                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                            STATEMENTS OF CASH FLOWS
                            (in thousands of dollars)

<TABLE>
<CAPTION>
                                                                                      For the Six Months
                                                                                         Ended June 30,
                                                                                    1999            1998
                                                                                 ------------------------------
OPERATING ACTIVITIES

 <S>                                                                             <C>             <C>
 Net income                                                                      $    7,896      $    7,852
 Adjustments to reconcile net income
       to net cash provided by (used in) operating activities:
   Depreciation and amortization                                                      4,902           4,520
   Net gain on disposition of equipment                                                  (4)            (33)
   Equity in net income from unconsolidated special-purpose entities                 (7,900)         (7,951)
   Changes in operating assets and liabilities:
     Restricted cash                                                                     --              (2)
     Accounts receivable, net                                                           205            (215)
     Prepaid expenses and other assets                                                   65             (92)
     Accounts payable and accrued expenses                                             (235)           (154)
     Due to affiliates                                                                  185              53
     Lessee deposits and reserve for repairs                                            (57)           (382)
     Minority interests                                                                (176)            (82)
                                                                                 -----------------------------
       Net cash provided by operating activities                                      4,881           3,514
                                                                                 -----------------------------

 INVESTING ACTIVITIES

 Payments for purchase of equipment and capitalized improvements                     (7,777)         (3,020)
 Investment in and equipment purchased and placed in
     unconsolidated special-purpose entities                                         (8,974)        (14,720)
 Distribution from unconsolidated special-purpose entities                            1,837           6,605
 Distributions from liquidation of unconsolidated special-purpose entities           15,855          14,802
 Payments of acquisition fees to affiliate                                             (342)           (135)
 Payments of lease negotiation fees to affiliate                                        (76)            (30)
 Proceeds from disposition of equipment                                               1,658             268
                                                                                 -----------------------------
       Net cash provided by investing activities                                      2,181           3,770
                                                                                 -----------------------------
 FINANCING ACTIVITIES

 Payments due to affiliates                                                              --          (3,582)
 Cash received from affiliates                                                           --           1,511
 Cash distribution paid to limited partners                                          (4,797)         (4,817)
 Cash distribution paid to General Partner                                             (252)           (254)
 Repurchase of limited partnership units                                               (120)           (513)
                                                                                 -----------------------------
       Net cash used in financing activities                                         (5,169)         (7,655)
                                                                                 -----------------------------

 Net increase (decrease) in cash and cash equivalents                                 1,893            (371)
 Cash and cash equivalents at beginning of period                                       404            9,327
                                                                                  -----------------------------
 Cash and cash equivalents at end of period                                      $    2,297      $    8,956
                                                                                 ==============================

 SUPPLEMENTAL INFORMATION

 Interest paid                                                                   $      836      $      869
                                                                                 ==============================

</TABLE>



                 See accompanying notes to financial statements.


<PAGE>


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 1999

1.   OPINION OF MANAGEMENT

In the opinion of the  management  of PLM Financial  Services,  Inc. (FSI or the
General Partner),  the accompanying  unaudited financial  statements contain all
adjustments  necessary,  consisting  primarily of normal recurring accruals,  to
present fairly the financial  position of PLM Equipment Growth & Income Fund VII
(the  Partnership)  as of June 30, 1999 and December 31, 1998, the statements of
income for the three and six months ended June 30, 1999 and 1998, the statements
of changes in  partners'  capital for the period from  December 31, 1997 to June
30,  1999,  and the  statements  of cash flows for the six months ended June 30,
1999 and 1998.  Certain  information and note disclosures  normally  included in
financial  statements  prepared in accordance with generally accepted accounting
principles  have been  condensed  or  omitted  from the  accompanying  financial
statements.  For further information,  reference should be made to the financial
statements and notes thereto included in the Partnership's Annual Report on Form
10-K/A for the year ended  December  31,  1998,  on file at the  Securities  and
Exchange Commission.

2.   SCHEDULE OF PARTNERSHIP PHASES

The Partnership is currently  operating  within the first six years of operation
in which the General  Partner intends to reinvest a portion of cash flow and net
disposition  proceeds in additional  equipment.  Beginning in the  Partnership's
seventh year of  operations,  which  commences  on January 1, 2002,  the General
Partner  will stop  reinvesting  excess cash,  if any,  which,  less  reasonable
reserves,  will be distributed to the partners.  Beginning in the  Partnership's
ninth year of  operations,  which  commences  on January  1, 2004,  the  General
Partner intends to begin an orderly liquidation of the Partnership's assets. The
General Partner anticipates that the liquidation of the assets will be completed
by the end of the Partnership's  tenth year of operations.  The Partnership will
terminate  on December  31,  2013,  unless  terminated  earlier upon sale of all
equipment or by certain other events.

3.   REPURCHASE OF LIMITED PARTNERSHIP UNITS

In 1998,  the  Partnership  agreed to repurchase  approximately  60,800  limited
partnership units in 1999 for an aggregate purchase price of up to $0.8 million.
During the six months ended June 30, 1999, the Partnership had repurchased 9,892
limited  partnership units for $0.1 million.  The General Partner may repurchase
additional units in the future.

4.   CASH DISTRIBUTIONS

Cash  distributions  are recorded when paid and may include amounts in excess of
net income that are considered to represent a return of capital. For each of the
three  months  ended June 30, 1999 and 1998,  cash  distributions  totaled  $2.5
million,  for the six months  ended June 30, 1999 and 1998,  cash  distributions
totaled  $5.0  million  and  $5.1  million,  respectively.   None  of  the  cash
distributions  to the limited partners during the six months ended June 30, 1999
and 1998 were deemed to be a return of capital.

Cash  distributions  related to the results from the second  quarter of 1999, of
$1.4 million, will be paid during the third quarter of 1999.

5.   TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES

The balance due to  affiliates  as of June 30, 1999 included $0.2 million due to
FSI and its affiliates  for  management  fees and $0.3 million due to affiliated
unconsolidated  special-purpose  entities (USPEs). The balance due to affiliates
as of December 31, 1998 included $0.1 million due to FSI and its  affiliates for
management fees and $1.2 million due to an affiliated USPE.

During the six months ended June 30, 1999,  $1.0 million in engine  reserves and
security deposits were paid to an affiliated USPE.


<PAGE>



                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 1999

5.   TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES (CONTINUED)

The Partnership's  proportional share of USPE-affiliated management fees of $0.1
million  and $45,000 was  payable as of June 30,  1999 and  December  31,  1998,
respectively.

The Partnership's  proportional share of the affiliated expenses incurred by the
USPEs  during 1999 and 1998 is listed in the  following  table (in  thousands of
dollars):
<TABLE>
<CAPTION>

                                                       For the Three Months               For the Six Months
                                                          Ended June 30,                    Ended June 30,
                                                       1999           1998               1999           1998
                                                    --------------------------------------------------------------
  <S>                                               <C>            <C>                <C>              <C>
  Management fees                                   $      46      $      81          $    105         $   159
  Data processing and administrative
     expenses                                              15             25                38              58
  Insurance expense                                        --              8                --              10

</TABLE>

Transportation  Equipment  Indemnity Company,  Ltd., an affiliate of the General
Partner and currently in  liquidation,  will no longer  provide  certain  marine
insurance  coverage as had been  provided  during 1998.  These  services will be
provided by an unaffiliated third party.

The  Partnership  and USPEs paid FSI $0.8 million and $1.0 million for equipment
acquisition and lease negotiation fees during the six months ended June 30, 1999
and 1998, respectively.

6.   EQUIPMENT

The components of owned equipment were as follows (in thousands of dollars):

                                                June 30,           December 31,
                                                   1999                1998
                                              ----------------------------------

  Marine vessels                               $   39,977          $    39,977
  Trailers                                         17,106               17,280
  Aircraft                                         13,112               15,933
  Railcars                                          9,778               10,084
  Marine containers                                17,836                9,957
  Portable heaters                                  4,301                4,085
  Modular buildings                                    --                   88
                                               -----------         ------------
                                                  102,110               97,404
  Less accumulated depreciation                   (49,657)             (46,578)
                                               -----------         ------------
      Net equipment                            $   52,453          $    50,826
                                               ===========         ============

As of June 30, 1999,  all owned  equipment in the  Partnership's  portfolio  was
either  on  lease or  operating  in  PLM-affiliated  short-term  trailer  rental
facilities,  except for two commuter  aircraft and six railcars.  As of December
31, 1998, all owned equipment in the Partnership's portfolio was either on lease
or operating in PLM-affiliated short-term trailer rental facilities,  except for
two commuter  aircraft and three  railcars.  The net book value of the equipment
off lease was $3.0 million and $3.3 million as of June 30, 1999 and December 31,
1998, respectively.

During the six months ended June 30, 1999, the Partnership purchased a portfolio
of portable heaters for $0.2 million,  including acquisition fees of $9,000, and
marine containers for $7.3 million,  including acquisition fees of $0.3 million.
The  Partnership  also increased its majority  interest in a portfolio of marine
containers  by  $0.6  million  including   acquisition  fees  of  $20,000.   All
acquisition fees were paid to FSI.



<PAGE>


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 1999

6.   EQUIPMENT (CONTINUED)

During the six months ended June 30, 1999, the  Partnership  disposed of or sold
commercial aircraft, railcars, modular buildings, and trailers with an aggregate
net book value of $1.7  million for $1.7  million.  During the six months  ended
June 30, 1998, the  Partnership  disposed of or sold trailers and a railcar with
an aggregate net book value of $0.2 million for $0.3 million.

7.   Investments in Unconsolidated Special-Purpose Entities

The net investments in USPEs include the following  jointly-owned equipment (and
related assets and liabilities) (in thousands of dollars):
<TABLE>
<CAPTION>

                                                                                   June 30,        December 31,
                                                                                     1999             1998
                                                                                ------------------------------

<S>                                                                             <C>              <C>
38% interest in a trust owning a Boeing 737-300 Stage III commercial
    aircraft                                                                    $    8,726       $       --
50% interest in a trust owning a MD-82 Stage III commercial aircraft                 5,935            6,804
50% interest in a trust owning a MD-82 Stage III commercial aircraft                 2,732            3,546
44% interest in an entity owning a dry bulk-carrier marine vessel                    2,122            2,211
10% interest in an entity owning a mobile offshore drilling unit                     1,332            1,450
50% interest in a trust that owned four  737-200A  Stage II
    commercial aircraft                                                                172              222
24% interest in a trust that owned a 767-200ER Stage III commercial
    aircraft                                                                           119            4,341
25% interest in a trust that owned four 737-200A Stage II commercial
    aircraft                                                                           110              141
33% interest in two trusts that owned a total of three 737-200A Stage II
    commercial aircraft, two stage II aircraft engines, and
    a portfolio of aircraft rotables                                                    --            4,102
                                                                                ------------     -----------
 Net investments                                                                $   21,248       $   22,817
                                                                                ============     ===========

</TABLE>

As of June 30,  1999,  all  jointly-owned  equipment in the  Partnership's  USPE
portfolio was on lease except for a commercial aircraft with a net book value of
$8.5  million.  As of December  31,  1998,  all  jointly-owned  equipment in the
Partnership's USPE portfolio was on lease.

During  the six  months  ended  June 30,  1999,  the  General  Partner  sold the
Partnership's  33%  interest in two trusts that owned a total of three  737-200A
Stage II commercial aircraft,  two stage II aircraft engines, and a portfolio of
aircraft  rotables.  The  Partnership's  interest  in the  trusts  were sold for
proceeds of $7.0 million for its net  investment  of $4.0  million.  The General
Partner  also sold the  Partnership's  24%  interest  in a  767-200ER  Stage III
commercial  aircraft.  The  Partnership's  interest  in this  trust was sold for
proceeds of $9.6 million which  includes $0.7 million of unused engine  reserves
for its net investment of $3.8 million.

During the six months ended June 30, 1999, the Partnership purchased an interest
in a trust  owning a Boeing  737-300  Stage  III  commercial  aircraft  for $9.0
million including  acquisition fees of $0.4 million that was paid to FSI for the
purchase of this equipment.  The remaining  interest in this trust was purchased
by an affiliated program.

8.   OPERATING SEGMENTS

The Partnership  operates or operated in six primary operating segments:  marine
vessel leasing,  trailer leasing,  aircraft  leasing,  railcar  leasing,  marine
container leasing, and portable heater leasing. Each


<PAGE>


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 1999

8.   OPERATING SEGMENTS (CONTINUED)

equipment leasing segment engages in short-term to mid-term  operating leases to
a variety of customers.

The following  tables present a summary of the operating  segments (in thousands
of dollars):
<TABLE>
<CAPTION>

                                            Marine                                    Marine
                                            Vessel   Trailer    Aircraft  Railcar    Container  All
For the quarter ended June 30, 1999        Leasing   Leasing    Leasing   Leasing    Leasing    Other<F1>1   Total
     ----------------------------------    --------- ---------  --------- ---------  --------- ---------  -----------

     REVENUES
       <S>                                 <C>       <C>        <C>       <C>        <C>       <C>        <C>
       Lease revenue                       $  1,925  $  1,050   $    469  $    648   $    809  $    306   $  5,207
       Interest income and other                 --        --         --        --         --        20         20
       Gain on disposition of equipment          --         4          2        12         --        --         18
                                           ------------------------------------------------------------------------
         Total revenues                       1,925     1,054        471       660        809       326      5,245

     Costs and expenses
       Operations support                     1,055       247          5       153         --        11      1,471
       Depreciation and amortization            691       400        345       184        822       167      2,609
       Interest expense                          --        --         --        --         --       423        423
       Management fees to affiliate              97        54         20        46         41       (19)       239
       General and administrative expenses       30       141         12        14          5       137        339
       Provision for (recovery of) bad           --        52         --        (5)        --       633        680
     debts
                                           ------------------------------------------------------------------------
         Total costs and expenses             1,873       894        382       392        868     1,352      5,761
                                           ------------------------------------------------------------------------
     Minority interests                          52        --         --        --          1        --         53
     Equity in net income (loss) of USPEs        --        --      5,124        --         --        50      5,174
                                           ------------------------------------------------------------------------
     Net income (loss)                     $    104  $    160   $  5,213  $    268   $    (58) $   (976)  $  4,711
                                           ========================================================================

     Total assets as of June 30, 1999      $ 17,689  $  8,583   $ 22,593  $  5,113   $ 16,482  $  7,551   $ 78,011
                                          ========================================================================
<FN>
<F1>
-------------------
1 Includes  interest income and costs not identifiable to a particular  segment,
such as general and  administrative,  interest expense,  and certain  operations
support.  Also includes lease revenues and expenses such as operations  support,
depreciation  and  amortization,  management  fees,  general and  administrative
expenses  from portable  heaters and modular  buildings and aggregate net income
(loss) from an investment in an entity owning a mobile offshore drilling unit.
</FN>

</TABLE>
<TABLE>
<CAPTION>


                                            Marine
                                            Vessel   Trailer    Aircraft  Railcar    All
For the quarter ended June 30, 1998         Leasing   Leasing    Leasing   Leasing    Other<F1>1   Total
     ----------------------------------    --------- ---------  --------- ---------  --------- -----------

     REVENUES
       <S>                                 <C>       <C>        <C>       <C>        <C>       <C>
       Lease revenue                       $  1,575  $  1,170   $    505  $    691   $    242  $  4,183
       Interest income and other                 --        --         --        --         87        87
       Gain (loss) on disposition of             --       (10)        --         9         --        (1)
        equipment
                                           -------------------------------------------------------------
         Total revenues                       1,575     1,160        505       700        329     4,269

     COSTS AND EXPENSES
       Operations support                       674       211          6       161         11     1,063
       Depreciation and amortization            829       483        572       217        142     2,243
       Interest expense                          --        --          4        --        418       422
       Management fees to affiliate              78        67         25        50         12       232
       General and administrative expenses       35       130         31        16        134       346
       Provision for (recovery of) bad           --        44          2       (28)         5        23
     debts
                                           -------------------------------------------------------------
         Total costs and expenses             1,616       935        640       416        722     4,329
                                           -------------------------------------------------------------
     Minority interests                          32        --         --        --         --        32
     Equity in net income (loss) of USPEs        (4)       --      2,228        --         14     2,238
                                           -------------------------------------------------------------
     Net income (loss)                     $    (13 )$    225   $  2,093  $    284   $   (379 )$  2,210
                                           =============================================================
     Total assets as of June 30, 1998      $ 20,945  $ 10,490   $ 29,987  $  6,063   $ 14,770  $ 82,255
                                           =============================================================



<FN>
<F1>
----------------------
1 Includes  interest income and costs not identifiable to a particular  segment,
such as general and  administrative,  interest expense,  and certain  operations
support.  Also includes lease revenues and expenses such as operations  support,
depreciation  and  amortization,  management  fees,  general and  administrative
expenses  from portable  heaters and modular  buildings and aggregate net income
(loss) from an investment in an entity owning a mobile offshore drilling unit.
</FN>
</TABLE>




<PAGE>


                          PLM EQUIPMENT GROWTH FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 1999

8.   OPERATING SEGMENTS (CONTINUED)
<TABLE>
<CAPTION>

                                            Marine                                    Marine
     For the six months ended               Vessel   Trailer    Aircraft  Railcar    Container  All
           June 30, 1999                   Leasing   Leasing    Leasing   Leasing    Leasing    Other<F1>1
     ----------------------------------    --------- ---------  --------- ---------  --------- ---------  -----------

     REVENUES
       <S>                                 <C>       <C>        <C>       <C>        <C>       <C>        <C>
       Lease revenue                       $  4,229  $  2,032   $    974  $  1,340   $  1,267  $    624   $ 10,466
       Interest income and other                 --        --         --        --         --        60         60
       Gain (loss) on disposition of             --         8          2       (30)        --        24          4
     equipment
                                           ------------------------------------------------------------------------
         Total revenues                       4,229     2,040        976     1,310      1,267       708     10,530

     COSTS AND EXPENSES
       Operations support                     2,204       452         10       293         --        23      2,982
       Depreciation and amortization          1,381       790        690       372      1,329       340      4,902
       Interest expense                          --        --         --        --         --       836        836
       Management fees to affiliate             212       108         45        95         63        (2)       521
       General and administrative expenses       50       254         20        28         10       306        668
       Provision for (recovery of) bad           --        94         --        (9)        --       631        716
     debts
                                           ------------------------------------------------------------------------
         Total costs and expenses             3,847     1,698        765       779      1,402     2,134     10,625
                                           ------------------------------------------------------------------------
     Minority interests                          90        --         --        --          1        --         91
     Equity in net income (loss) of USPEs       (22)       --      7,824        --         --        98      7,900
                                           ------------------------------------------------------------------------
     Net income (loss)                     $    450  $    342   $  8,035  $    531   $   (134) $ (1,328)  $  7,896
                                           ========================================================================

     Total assets as of June 30, 1999      $ 17,689  $  8,583   $ 22,593  $  5,113   $ 16,482  $  7,551   $ 78,011
                                           ========================================================================
<FN>
<F1>
-----------------------
1 Includes  interest income and costs not identifiable to a particular  segment,
such as general and  administrative,  interest expense,  and certain  operations
support.  Also includes lease revenues and expenses such as operations  support,
depreciation  and  amortization,  management  fees,  general and  administrative
expenses  from portable  heaters and modular  buildings and aggregate net income
(loss) from an investment in an entity owning a mobile offshore drilling unit.
</FN>
</TABLE>


<TABLE>
<CAPTION>

                                            Marine
     For the six months ended               Vessel   Trailer    Aircraft  Railcar    All
           June 30, 1998                   Leasing   Leasing    Leasing   Leasing    Other<F1>1  Total
     ----------------------------------    --------- ---------  --------- ---------  --------- -----------

     REVENUES
       <S>                                 <C>       <C>        <C>       <C>        <C>       <C>
       Lease revenue                       $  3,131  $  2,370   $  1,011  $  1,381   $    275  $  8,168
       Interest income and other                 --        --         --        --        140       140
       Gain on disposition of equipment          --        24         --         9         --        33
                                           -------------------------------------------------------------
         Total revenues                       3,131     2,394      1,011     1,390        415     8,341

     Costs and expenses
       Operations support                     1,117       404        119       318         22     1,980
       Depreciation and amortization          1,658       981      1,206       435        240     4,520
       Interest expense                          --        --          4        --        828       832
       Management fees to affiliate             157       135         50        97         15       454
       General and administrative expenses       69       249         41        32        266       657
       Provision for (recovery of) bad           --        49          2         2        (11)       42
     debts
                                           -------------------------------------------------------------
         Total costs and expenses             3,001     1,818      1,422       884      1,360     8,485
                                           -------------------------------------------------------------
     Minority interests                          45        --         --        --         --        45
     Equity in net income (loss) of USPEs       (66)       --      7,980        --         37     7,951
                                           -------------------------------------------------------------
     Net income (loss)                     $    109  $    576   $  7,569  $    506   $   (908 )$  7,852
                                           =============================================================

     Total assets as of June 30, 1998      $ 20,945  $ 10,490   $ 29,987  $  6,063   $ 14,770  $ 82,255
                                           =============================================================


<FN>
<F1>
---------------------------
1 Includes  interest income and costs not identifiable to a particular  segment,
such as general and  administrative,  interest expense,  and certain  operations
support.  Also includes lease revenues and expenses such as operations  support,
depreciation  and  amortization,  management  fees,  general and  administrative
expenses  from portable  heaters and modular  buildings and aggregate net income
(loss) from an investment in an entity owning a mobile offshore drilling unit.

</FN>
</TABLE>

<PAGE>


                          PLM EQUIPMENT GROWTH FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 1999

9.   DEBT

The General  Partner has entered into a short-term,  joint $24.5 million  credit
facility (the Committed  Bridge  Facility) on behalf of the Partnership  that is
due to expire on December  14, 1999.  Among the other  eligible  borrowers,  TEC
Acquisub, Inc., an indirect wholly-owned subsidiary of PLM International,  Inc.,
had borrowings of $10.4 million under the short-term joint, $24.5 million credit
facility as of June 30, 1999.  No other  eligible  borrower had any  outstanding
borrowings.

The  General  Partner  believes  it will be able to renew the  Committed  Bridge
Facility  upon its  expiration  with  similar  terms  as  those  in the  current
Committed Bridge Facility.

10.  NET INCOME PER WEIGHTED-AVERAGE PARTNERSHIP UNIT

Net income per  weighted-average  Partnership  unit was computed by dividing net
income  attributable  to  limited  partners  by the  weighted-average  number of
Partnership units deemed  outstanding  during the period.  The  weighted-average
number of Partnership units deemed  outstanding  during the three and six months
ended  June  30,  1999  was   5,326,080   and   5,328,374,   respectively.   The
weighted-average number of Partnership units deemed outstanding during the three
and six months ended June 30, 1998 was 5,339,379 and 5,348,627, respectively.

11.  CONTINGENCIES

PLM International (the Company) and various of its wholly-owned subsidiaries are
named as defendants  in a lawsuit  filed as a purported  class action on January
22,  1997 in the  Circuit  Court of Mobile  County,  Mobile,  Alabama,  Case No.
CV-97-251  (the Koch action).  Plaintiffs,  who filed the complaint on their own
and on behalf of all class members similarly  situated,  are six individuals who
invested in certain  California  limited  partnerships  for which the  Company's
wholly-owned subsidiary, PLM Financial Services, Inc. (FSI), acts as the general
partner,  including PLM Equipment Growth Fund IV (Fund IV), PLM Equipment Growth
Fund V (Fund V),  PLM  Equipment  Growth  Fund VI (Fund VI),  and PLM  Equipment
Growth & Income  Fund VII (Fund  VII)  (the  Funds).  The  state  court ex parte
certified the action as a class action (i.e.,  solely upon  plaintiffs'  request
and without the Company being given the opportunity to file an opposition).  The
complaint  asserts eight causes of action  against all  defendants,  as follows:
fraud and deceit,  suppression,  negligent  misrepresentation  and  suppression,
intentional breach of fiduciary duty, negligent breach of fiduciary duty, unjust
enrichment, conversion, and conspiracy. Additionally,  plaintiffs allege a cause
of action  against PLM Securities  Corp.  for breach of third party  beneficiary
contracts in violation of the National  Association of Securities  Dealers rules
of fair practice.  Plaintiffs allege that each defendant owed plaintiffs and the
class certain  duties due to their status as  fiduciaries,  financial  advisors,
agents, and control persons. Based on these duties,  plaintiffs assert liability
against defendants for improper sales and marketing practices,  mismanagement of
the Funds,  and  concealing  such  mismanagement  from  investors  in the Funds.
Plaintiffs  seek  unspecified  compensatory  and recissory  damages,  as well as
punitive  damages,  and have offered to tender their limited  partnership  units
back to the defendants.

In March 1997,  the  defendants  removed the Koch action from the state court to
the United States District Court for the Southern District of Alabama,  Southern
Division  (Civil  Action No.  97-0177-BH-C)  (the  court)  based on the  court's
diversity jurisdiction,  following which plaintiffs filed a motion to remand the
action to the state court.  Removal of the action  automatically  nullified  the
state court's ex parte  certification of the class. In September 1997, the court
denied  plaintiffs'  motion to remand  the action to state  court and  dismissed
without prejudice the individual claims of the California  plaintiff,  reasoning
that he had been fraudulently joined as a plaintiff. In October 1997, defendants
filed a  motion  to  compel  arbitration  of  plaintiffs'  claims,  based  on an
agreement to arbitrate  contained in the limited  partnership  agreement of each
Fund, and to stay further  proceedings  pending the outcome of such arbitration.
Notwithstanding  plaintiffs' opposition, the court granted defendants' motion in
December 1997.


                          PLM EQUIPMENT GROWTH FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 1999

11.  CONTINGENCIES (CONTINUED)

Following  various  unsuccessful  requests that the court reverse,  or otherwise
certify for appeal,  its order denying  plaintiffs' motion to remand the case to
state court and dismissing the California  plaintiff's claims,  plaintiffs filed
with the U.S. Court of Appeals for the Eleventh Circuit a petition for a writ of
mandamus  seeking to reverse the court's  order.  The  Eleventh  Circuit  denied
plaintiffs' petition in November 1997, and further denied plaintiffs  subsequent
motion in the Eleventh  Circuit for a rehearing on this issue.  Plaintiffs  also
appealed the court's order granting  defendants'  motion to compel  arbitration,
but in June 1998  voluntarily  dismissed their appeal pending  settlement of the
Koch action, as discussed below.

On June 5, 1997, the Company and the  affiliates who are also  defendants in the
Koch action were named as defendants in another  purported class action filed in
the San Francisco  Superior Court,  San Francisco,  California,  Case No. 987062
(the  Romei  action).  The  plaintiff  is an  investor  in Fund V, and filed the
complaint  on her own  behalf  and on  behalf  of all  class  members  similarly
situated who invested in certain California  limited  partnerships for which FSI
acts as the general partner, including the Funds. The complaint alleges the same
facts and the same  nine  causes  of  action  as in the Koch  action,  plus five
additional  causes  of  action  against  all  of  the  defendants,  as  follows:
violations of California  Business and Professions  Code Sections 17200, et seq.
for  alleged  unfair  and  deceptive   practices,   constructive  fraud,  unjust
enrichment, violations of California Corporations Code Section 1507, and a claim
for treble damages under California Civil Code Section 3345.

On July 31,  1997,  defendants  filed with the  district  court for the Northern
District of California  (Case No. C-97-2847 WHO) a petition (the petition) under
the Federal  Arbitration Act seeking to compel arbitration of plaintiff's claims
and for an order staying the state court proceedings  pending the outcome of the
arbitration.  In connection with this motion,  plaintiff agreed to a stay of the
state court  action  pending the  district  court's  decision on the petition to
compel  arbitration.  In October 1997,  the district  court denied the Company's
petition  to  compel  arbitration,  but in  November  1997,  agreed  to hear the
Company's motion for  reconsideration  of this order. The hearing on this motion
has been taken off calendar and the district  court has  dismissed  the petition
pending  settlement of the Romei  action,  as discussed  below.  The state court
action  continues to be stayed pending such  resolution.  In connection with her
opposition  to the petition to compel  arbitration,  plaintiff  filed an amended
complaint with the state court in August 1997, alleging two new causes of action
for violations of the California Securities Law of 1968 (California Corporations
Code  Sections  25400 and  25500) and for  violation  of  California  Civil Code
Sections 1709 and 1710.  Plaintiff  also served  certain  discovery  requests on
defendants.  Because of the stay, no response to the amended complaint or to the
discovery is currently required.

In May 1998, all parties to the Koch and Romei actions entered into a memorandum
of  understanding  related to the  settlement  of those  actions  (the  monetary
settlement),  following  which the  parties  agreed to an  additional  equitable
settlement (the equitable settlement).  The terms of the monetary settlement and
the equitable  settlement are contained in a Stipulation of Settlement  that was
filed with the court on February 12, 1999. On June 14, 1999, the parties amended
the stipulation and revised certain exhibits, and requested that the court set a
preliminary   approval   hearing  on  the  monetary   settlement  and  equitable
settlement.

The monetary  settlement  provides  for  stipulating  to a class for  settlement
purposes,  and a settlement  and release of all claims  against  defendants  and
third party  brokers in exchange  for payment for the benefit of the class of up
to $6.0 million. The final settlement amount will depend on the number of claims
filed by authorized  claimants  who are members of the class,  the amount of the
administrative costs incurred in connection with the settlement,  and the amount
of attorneys' fees awarded by the court. The Company will pay up to $0.3 million
of the  monetary  settlement,  with the  remainder  being funded by an insurance
policy.  The equitable  settlement  provides,  among other  things:  (a) for the
extension of the operating  lives of Funds V, VI, and VII by judicial  amendment
to each of their partnership  agreements,  such that FSI, the general partner of
each such partnership,  be permitted to reinvest cash flow, surplus  partnership
funds, or retained proceeds in additional equipment into the year 2004, and will
liquidate  the  Funds'  equipment  in 2006;  (b) that  FSI is  entitled  to earn
front-end fees (including acquisition and lease
<PAGE>


                          PLM EQUIPMENT GROWTH FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 1999

11.  CONTINGENCIES (CONTINUED)

negotiation fees) up to 20% in excess of the compensatory  limitations set forth
in the North American Securities Administrators  Association,  Inc. Statement of
Policy by judicial amendment to the partnership  agreements for Funds V, VI, and
VII;  (c) for a one-time  repurchase  of up to 10% of the  outstanding  units of
Funds V, VI, and VII by the respective  partnership at 80% of such partnership's
net asset value;  and (d) for the deferral of a portion of FSI's management fees
until such time as certain performance thresholds have, if ever, been met by the
Funds. The equitable settlement also provides for payment of the equitable class
attorneys' fees from partnership funds in the event, if ever, that distributions
paid to  investors in Funds V, VI, and VII during the  extension  period reach a
certain  internal rate of return.  Defendants  will continue to deny each of the
claims and  contentions  and admit no liability in connection  with the monetary
and equitable settlements.

The preliminary  approval  hearing was set for and occurred on June 25, 1999. On
June  29,  1999,  the  court  entered  orders,  among  other  things,   granting
preliminary  approval of the monetary and equitable  settlements,  conditionally
certifying the monetary and equitable settlement classes,  providing for a final
fairness  hearing on November  16, 1999,  approving  the form and content of the
notices to be sent to the monetary  class and the equitable  class,  and staying
all claims, counterclaims, and crossclaims by the monetary and equitable classes
against  defendants  pending the court's  consideration  of the  fairness of the
monetary and equitable  settlements at the final fairness hearing.  The monetary
settlement  class  (the  monetary  class)  consists  of all  investors,  limited
partners,  assignees,  or unit  holders  who  purchased  or  received  by way of
transfer or assignment  any units in the Funds between May 23, 1989 and June 29,
1999.  The equitable  settlement  class (the  equitable  class)  consists of all
investors, limited partners, assignees or unit holders who on June 29, 1999 held
any units in Funds V, VI, and VII, and their assigns and successors in interest.
On June 29, 1999 the court also entered an order  preliminarily  approving as to
form and substance the form of solicitation  statement that is to be distributed
to limited  partners of Funds V, VI, and VII in  connection  with the  equitable
settlement,  following  clearance by and with such  changes  necessary to comply
with the comments,  if any, of the Securities and Exchange  Commission  (SEC) in
its review and clearance  procedures.  The monetary and equitable  class notices
will be sent to the  monetary and  equitable  classes,  respectively,  following
clearance by the SEC of the solicitation statement.

The monetary settlement remains subject to certain conditions, including but not
limited to notice to the monetary class for purposes of the monetary  settlement
and final  approval of the monetary  settlement  by the court  following a final
fairness  hearing.   The  equitable   settlement  remains  subject  to  numerous
conditions, including but not limited to: (a) notice to the equitable class, (b)
review  and  clearance  by the SEC,  and  dissemination  to the  members  of the
equitable class, of solicitation  statements  regarding the proposed extensions,
(c) disapproval by less than 50% of the limited partners in Funds V, VI, and VII
of the proposed amendments to the limited partnership  agreements,  (d) judicial
approval of the proposed amendments to the limited partnership  agreements,  and
(e) final  approval of the equitable  settlement by the court  following a final
fairness  hearing.  The  monetary  settlement,  if  approved,  will  go  forward
regardless of whether the  equitable  settlement is approved or not. The Company
continues  to believe  that the  allegations  of the Koch and Romei  actions are
completely  without  merit  and  intends  to  continue  to  defend  this  matter
vigorously if the monetary settlement is not consummated.

The  Partnership  is involved as plaintiff  or defendant in various  other legal
actions incident to its business.  Management does not believe that any of these
actions will be material to the financial condition of the Company.


<PAGE>


                          PLM EQUIPMENT GROWTH FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 1999

12.  RESTATEMENT

The financial  statements have been restated to reflect the consolidation of the
Partnership's  majority  interests in greater  than 50% owned USPE's  previously
reported  under the equity method of  accounting  for the period ending June 30,
1999.

As a result of the consolidation,  total assets, total liabilities, and minority
interests changed as of June 30, 1999 and December 31, 1998 as follows:

                                  1999                          1998
                         As reported      Amended       As reported    Amended
                        ---------------------------   --------------------------
     Total assets         $ 73,870        $ 78,011     $ 72,174       $ 76,537
     Total liabilities      24,896          25,428       25,927         26,505
     Minority interests         --           3,609           --          3,785

Additionally, as a result of the consolidation,  total revenues, total expenses,
minority  interests,  and  equity in net income of USPEs  changed  for the three
months ended June 30, 1999 and 1998 as follows:

                                   1999                            1998
                         As reported       Amended      As reported     Amended
                       ---------------------------   ---------------------------
Total revenues            $  4,324       $  5,245       $  3,489       $  4,269
Total expenses               4,575          5,761          3,389          4,329
Minority interests              --             53             --             32
Equity in net income
  of SPEs                    4,962          5,174          2,110          2,238
Net income                $  4,711       $  4,711       $  2,210       $  2,210

Total revenues, total expenses,  minority interests, and equity in net income of
USPEs changed for the six months ended June 30, 1999 and 1998 as follows:

                                    1999                            1998
                           As reported   Amended        As reported     Amended
                         ---------------------------   -------------------------
Total revenues            $  8,538       $ 10,530        $ 6,796       $  8,341
Total expenses               8,180         10,625          6,714          8,485
Minority interests              --             91             --             45
Equity in net income
 of USPEs                    7,538          7,900          7,770          7,951
Net income                 $ 7,896       $  7,896       $  7,852       $  7,852

The  consolidation  of the  Partnership's  majority  interests in USPE's did not
change partners' capital or net income.








<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

(I)  RESULTS OF OPERATIONS

COMPARISON  OF PLM  EQUIPMENT  GROWTH & INCOME  FUND VII'S  (THE  PARTNERSHIP'S)
OPERATING RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998

(A)  Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as repairs  and  maintenance,
equipment operating,  and asset-specific  insurance expenses) on owned equipment
increased during the three months ended June 30, 1999, when compared to the same
period of 1998.  Gains or losses from the sale of equipment,  interest and other
income,  and certain  expenses such as depreciation and amortization and general
and  administrative  expenses relating to the operating  segments (see Note 8 to
the financial  statements),  are not included in the owned  equipment  operation
discussion  because  these  expenses  are indirect in nature and not a result of
operations,  but the result of owning a portfolio of  equipment.  The  following
table presents  lease revenues less direct  expenses by segment (in thousands of
dollars):

                                                For the Three Months
                                                   Ended June 30,
                                                1999             1998
                                             ----------------------------

  Marine vessels                             $    870        $     901
  Marine containers                               809               --
  Trailers                                        803              959
  Railcars                                        495              529
  Aircraft                                        464              499
  Portable heaters                                301              231
  Modular buildings                                 5               11

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $1.9
million and $1.1  million,  respectively,  for the three  months  ended June 30,
1999, compared to $1.6 million and $0.7 million,  respectively,  during the same
period of 1998.  Lease revenues and direct expenses  increased during the second
quarter of 1999,  when  compared to the same period of 1998,  due to a change in
the lease arrangement for two of the Partnership's three marine vessels.  During
the second quarter of 1998, two of the three marine vessels were operating under
bareboat  charters  in which the lessee pays a flat lease rate and also pays for
certain  operating  expenses while on lease.  During the second quarter of 1999,
these two marine vessels were operating  under a lease  arrangement in which the
lessee  pays a higher  lease rate,  however,  the  Partnership  now pays for all
operating  expenses.  As a result  of the  change  in lease  arrangement,  lease
revenues for the two marine vessels  increased $0.6 million and direct  expenses
increased  $0.5 million  during 1999,  when compared to the same period of 1998.
For the  remaining  marine  vessel  in  which  the  Partnership  has a  majority
interest,  lease  revenues  decreased  $0.3 million due to lower lease rates and
direct expenses decreased $0.1 million due to lower repairs and maintenance.

Marine containers: Lease revenues and direct expenses for marine containers were
$0.8 million and $0, respectively, for the three months ended June 30, 1999. The
increase  in marine  containers  contribution  was due to the  purchase  of this
equipment during March 1999.

Trailers:  Trailer lease revenues and direct expenses were $1.0 million and $0.2
million,  respectively,  for the three months  ended June 30, 1999,  compared to
$1.2 million and $0.2 million, respectively, during the same period of 1998. The
decrease in trailer  contribution  was due to primarily to lower  utilization of
the  over-the-road dry trailers during the three months ended June 30, 1999 when
compared to the same period of 1998.

Railcars:  Railcar lease revenues and direct expenses were $0.6 million and $0.2
million,  respectively,  for the three months  ended June 30, 1999,  compared to
$0.7 million and $0.2 million, respectively, during the same period of 1998. The
small  decrease in railcar  contribution  during 1999 was due to sale of railcar
equipment  during  1999.  These  railcars  were on lease during the three months
ended June 30, 1998 when compared to the same period of 1999.

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $0.5 million and
$5,000, respectively, for the three months ended June 30, 1999, compared to $0.5
million and $6,000,  respectively,  during the same period of 1998. The decrease
in aircraft  contribution  was due to lower lease  revenues of $36,000 earned on
one of the three commercial aircraft that was sold during June 1999.

Portable  heaters:  Lease revenues and direct expenses for portable heaters were
$0.3  million and $0,  respectively,  for the three  months ended June 30, 1999,
compared to $0.2 million and $0,  respectively,  during the same period of 1998.
The  increase  in  portable  heater  contribution  was  due to the  purchase  of
additional equipment during 1999 and throughout 1998.

(B) Indirect Expenses Related to Owned Equipment Operations

Total indirect expenses of $4.3 million for the three months ended June 30, 1999
increased from $3.3 million for the same period in 1998.  Significant  variances
are explained as follows:

     (i) an increase of $0.7 million in the provision for bad debts based on the
General  Partner's   evaluation  of  the   collectability  of  receivables  due,
primarily, from certain lessees that are currently leasing portable heaters.

     (ii)A $0.4 million increase in depreciation and amortization  expenses from
1998 levels  primarily  reflects the purchase of certain  assets during 1999 and
1998 offset,  in part, by the  double-declining  balance method of  depreciation
which results in greater depreciation in the first years an asset is owned.

(C)  Net Gain (Loss) on Disposition of Owned Equipment

The net gain on  disposition of equipment for the second quarter of 1999 totaled
$18,000,  and  resulted  from the sale of a railcar,  commercial  aircraft,  and
trailers  with an aggregate  net book value of $1.4 million for proceeds of $1.4
million. The net loss on disposition of equipment for the second quarter of 1998
totaled  $1,000,  and  resulted  from the sale of trailers and a railcar with an
aggregate net book value of $47,000 for proceeds of $46,000.

(D)  Equity in Net Income (Loss) of Unconsolidated Special-Purpose Entities
     (USPEs)

Net income (loss) generated from the operation of jointly-owned assets accounted
for under the equity  method is shown in the following  table by equipment  type
(in thousands of dollars):

                                                          For the Three Months
                                                              Ended June 30,
                                                          1999            1998
                                                       -------------------------

Aircraft, rotable components, and aircraft engines  $  5,124         $  2,228
Mobile offshore drilling unit                             50               14
Marine vessels                                             -               (4)
                                                      --------------------------
  Equity in net income of USPEs                     $  5,174         $  2,238
                                                      ==========================

Aircraft,  rotable  components,  and aircraft  engines:  During the three months
ended June 30, 1999,  lease  revenues of $0.6 million and the gain from the sale
of the  Partnership's  interest  in a  trust  of $5.8  million  were  offset  by
depreciation  expense,  direct  expenses,  and  administrative  expenses of $1.3
million.  During the same period of 1998, lease revenues of $1.4 million and the
gain from the sale of the Partnership's interest in a trust of $2.8 million were
offset by depreciation expense,  direct expenses, and administrative expenses of
$2.0  million.  Lease  revenues  decreased  $0.9  million due to the sale of the
Partnership's  investment in a trust owning a 767-200ER commercial aircraft, the
sale of the  Partnership's  investment in two trusts  containing  ten commercial
aircraft,  the sale of the  Partnership's  investment in two trusts that owned a
total of three  737-200A  Stage II  commercial  aircraft,  two stage II aircraft
engines,  and a portfolio of aircraft  rotables.  The decrease in lease revenues
caused by these sales was offset,  in part, by $0.1 million in additional  lease
revenues from the purchase of a trust owning MD-82  commercial  aircraft  during
May 1998. The  Partnership's  purchase of an interest in a trust owning a Boeing
737 during 1999 did not generate any lease revenues since it was off-lease.  The
decrease in expenses of $0.7  million was  primarily  due to lower  depreciation
expense of $0.5 million  relating to the sale of the  Partnership's  interest in
five  trusts and $0.5  million  as the  result of the  double  declining-balance
method of depreciation which results in greater  depreciation in the first years
an asset is  owned  offset,  in part,  by $0.2  million  from the  Partnership's
investment in an additional trust during 1999.

Mobile offshore  drilling unit:  During the three months ended June 30, 1999 and
1998, lease revenues of $0.1 million were offset by depreciation expense, direct
expenses,  and administrative  expenses of $0.1 million.  The increase in mobile
offshore  drilling  unit  contribution  is primarily due to an increase in lease
revenue  of  $17,000  due  to  increased  lease  rates  during  1999  and  lower
depreciation  expense of  $14,000  as a result of the  double  declining-balance
method of depreciation which results in greater  depreciation in the first years
an asset is owned.

Marine vessels:  During the three months ended June 30, 1999,  lease revenues of
$0.2  million  were  offset  by  depreciation  expense,   direct  expenses,  and
administrative  expenses of $0.2 million.  During the same period of 1998, lease
revenues of $0.3 million were offset by depreciation  expense,  direct expenses,
and  administrative  expenses of $0.3 million.  Lease  revenues  decreased  $0.1
million due to lower lease rates.  Operating expenses decreased $0.1 million due
to lower repairs and  maintenance and lower operating costs when compared to the
same period of 1998.

(E)  Net Income

As a result of the foregoing, the Partnership had net income of $4.7 million for
the three  months  ended June 30,  1999,  compared to net income of $2.2 million
during the same period of 1998. The Partnership's  ability to acquire,  operate,
and liquidate  assets,  secure  leases,  and re-lease  those assets whose leases
expire is subject to many factors.  Therefore, the Partnership's  performance in
the second quarter of 1999 is not necessarily  indicative of future periods.  In
the second  quarter of 1999,  the  Partnership  distributed  $2.4 million to the
limited partners, or $0.45 per weighted-average limited partnership unit.

COMPARISON OF THE PARTNERSHIP'S  OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE
30, 1999 AND 1998

(A)  Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as repairs  and  maintenance,
equipment operating,  and asset-specific  insurance expenses) on owned equipment
increased  during the six months ended June 30, 1999,  when compared to the same
period of 1998.  Gains or losses from the sale of equipment,  interest and other
income,  and certain  expenses such as depreciation and amortization and general
and  administrative  expenses relating to the operating  segments (see Note 8 to
the financial  statements),  are not included in the owned  equipment  operation
discussion  because  these  expenses  are indirect in nature and not a result of
operations,  but the result of owning a portfolio of  equipment.  The  following
table presents  lease revenues less direct  expenses by segment (in thousands of
dollars):

                                       For the Six Months
                                          Ended June 30,
                                       1999             1998
                                     ----------------------------

  Marine vessels                     $  2,025            2,014
  Trailers                              1,580            1,966
  Marine containers                     1,267               --
  Rail equipment                        1,047            1,063
  Aircraft                                964              892
  Portable heaters                        614              249
  Modular buildings                        10               26

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $4.2
million and $2.2 million,  respectively, for the six months ended June 30, 1999,
compared to $3.1 million and $1.1 million, respectively,  during the same period
of 1998.  During the six months  ended June 30, 1998,  two of the  Partnership's
marine vessels were operating under bareboat charters in which the lessee pays a
flat lease rate and also pays for  certain  operating  expenses  while on lease.
During  the six months  ended  June 30,  1999,  these two  marine  vessels  were
operating  under a lease  arrangement  in which the lessee  pays a higher  lease
rate, however, the Partnership now pays for all operating expenses. The increase
in marine  vessel  contribution  from  these two marine  vessels  was due to the
increase in the lease  revenues of $1.5 million  from the new lease  arrangement
exceeding  the increase in operating  expenses of $1.1  million.  The  remaining
marine vessel, of which the Partnership has a majority interest,  earned a lower
lease rate that caused lease  revenues for this marine  vessel to decrease  $0.4
million  during the six months  ended June 30,  1999 when  compared  to the same
period of 1998.  Direct expenses for this marine vessel remained  relatively the
same for both periods during the six months ended June 30, 1999 and 1998.

Trailers:  Trailer lease revenues and direct expenses were $2.0 million and $0.5
million,  respectively, for the six months ended June 30, 1999, compared to $2.4
million and $0.4  million,  respectively,  during the same  period of 1998.  The
decrease  in trailer  contribution  of was  primarily  due to lower  utilization
revenues earned on the Partnership's over-the-road dry trailers.

Marine containers: Lease revenues and direct expenses for marine containers were
$1.3 million and $0,  respectively,  for the six months ended June 30, 1999. The
increase  in marine  containers  contribution  was due to the  purchase  of this
equipment during March 1999.

Rail  equipment:  Rail equipment  lease  revenues and direct  expenses were $1.3
million and $0.3 million,  respectively, for the six months ended June 30, 1999,
compared to $1.4 million and $0.3 million, respectively,  during the same period
of 1998.  The  decrease in rail  equipment  contribution  was due to the sale of
railcars during the first quarter of 1999.

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $1.0 million and
$10,000,  respectively, for the six months ended June 30, 1999, compared to $1.0
million and $0.1  million,  respectively,  during the same  period of 1998.  The
increase  in  aircraft  contribution  was due to lower  repairs of $0.1  million
needed to the commuter  aircraft during 1999 when compared to the same period of
1998. In addition, aircraft lease revenues were $37,000 lower caused by the sale
of three commercial aircraft during June 1999.

Portable heaters:  Portable heaters lease revenues and direct expenses were $0.6
million and $0,  respectively,  for the six months ended June 30, 1999, compared
to $0.2  million  and $0,  respectively,  during  the same  period of 1998.  The
increase in portable heater  contribution  was due to the purchase of additional
equipment during the latter half of 1998 and the first quarter of 1999.

Modular  buildings:  Modular  building lease  revenues and direct  expenses were
$10,000 and $0,  respectively,  for the six months ended June 30, 1999, compared
to $26,000 and $0,  respectively,  during the same  period of 1998.  The primary
reason for the decrease in lease  revenues  and direct  expenses was the sale of
virtually all of this equipment during 1998.

(B)  Indirect Expenses Related to Owned Equipment Operations

Total indirect  expenses of $7.6 million for the six months ended June 30, 1999,
increased from $6.5 million for the same period in 1998.  Significant  variances
are explained as follows:

     (i) A $0.7 million  increase due to the increase in the  provision  for bad
debts  based  on the  General  Partner's  evaluation  of the  collectability  of
receivables  due,  primarily,  from certain  lessees that are currently  leasing
portable heaters.

     (ii)A $0.4 million increase in depreciation and amortization  expenses from
1998  levels  primarily  reflects  the  increase of $1.3  million  caused by the
purchase of marine containers during 1999 and 1998 offset in part, by a decrease
of approximately $0.9 million caused by the  double-declining  balance method of
depreciation  which results in greater  depreciation in the first years an asset
is owned.

     (iii) A $0.1 million  increase in  management  fees to affiliate was due to
higher lease revenues.

(C)  Net Gain on Disposition of Owned Equipment

The net gain on  disposition of equipment for the six months ended June 30, 1999
totaled  $4,000,  and resulted from the sale of commercial  aircraft,  trailers,
modular buildings, and railcars with an aggregate net book value of $1.7 million
for proceeds of $1.7 million.  The net gain on  disposition of equipment for the
six months ended June 30, 1998 totaled  $33,000,  and resulted  from the sale of
trailers and a railcar with an aggregate net book value of $0.2 million for $0.3
million.


<PAGE>



(D)  Equity in Net Income (Loss) of Unconsolidated Special-Purpose Entities

Net income (loss) generated from the operation of jointly-owned assets accounted
for under the equity  method is shown in the following  table by equipment  type
(in thousands of dollars):

                                                          For the Six Months
                                                             Ended June 30,
                                                         1999             1998
                                                        ------------------------

Aircraft, rotable components, and aircraft engines    $  7,824       $  7,980
Mobile offshore drilling unit                               98             37
Marine vessels                                             (22)           (66)
                                                        ------------------------
 Equity in net income of USPEs                       $  7,900       $  7,951
                                                        ========================

Aircraft,  rotable components, and aircraft engines: During the six months ended
June 30, 1999,  lease revenues of $1.5 million and the gain from the sale of the
Partnership's   interest  in  three  trusts  of  $8.9  million  were  offset  by
depreciation  expense,  direct  expenses,  and  administrative  expenses of $2.6
million.  During the same period of 1998, lease revenues of $3.3 million and the
gain from the sale of the  Partnership's  interest in two trusts of $8.8 million
were  offset  by  depreciation  expense,  direct  expenses,  and  administrative
expenses of $4.1 million.  Lease revenues decreased $2.1 million due to the sale
of the  Partnership's  investment  in five  trusts  during  1999 and  1998.  The
decrease in lease  revenues  caused by these sales was partially  offset by $0.3
million  as a result of the  Partnership's  investment  in an  additional  trust
during May 1998. The Partnership's investment in an additional trust during June
1999 did not generate any lease revenues since it was off-lease. The decrease in
depreciation  expense,  direct  expenses,  and  administrative  expenses of $1.5
million  was  due  primarily  lower  depreciation  expense  resulting  from  the
Partnership's  sale of it's  investment  in five  trusts  during  1999  and 1998
partially offset, by the Partnership's  investment in an additional trust during
1999.

Mobile offshore  drilling unit: During the six months ended June 30, 1999, lease
revenues of $0.2 million were offset by depreciation  expense,  direct expenses,
and  administrative  expenses of $0.1  million.  During the same period of 1998,
lease  revenues of $0.2  million  were offset by  depreciation  expense,  direct
expenses,  and  administrative  expenses of $0.2  million.  The  increase in the
contribution  from this  equipment  was the result of an increase in the monthly
lease rate and lower depreciation expense caused by the double-declining balance
method of depreciation.

Marine  vessels:  During the six months ended June 30, 1999,  lease  revenues of
$0.4  million  were  offset  by  depreciation  expense,   direct  expenses,  and
administrative  expenses of $0.4 million.  During the same period of 1998, lease
revenues of $0.5 million were offset by depreciation  expense,  direct expenses,
and  administrative  expenses of $0.6  million.  Marine  vessel  lease  revenues
decreased  during the six months ended June 30, 1999, due to a lower lease rate.
The  decrease in  depreciation  expense,  direct  expenses,  and  administrative
expenses was due primarily to lower repairs and  maintenance and lower operating
expenses  during the six months  ended June 30,  1999 when  compared to the same
period of 1998.

(E)  Net Income

As a result of the foregoing,  the  Partnership's  net income for the six months
ended June 30,  1999 and 1998 was $7.9  million.  The  Partnership's  ability to
acquire, operate, and liquidate assets, secure leases, and re-lease those assets
whose  leases  expire  is  subject  to  many  factors,   and  the  Partnership's
performance in the six months ended June 30, 1999 is not necessarily  indicative
of future  periods.  In the six months  ended  June 30,  1999,  the  Partnership
distributed $4.8 million to the limited partners,  or $0.90 per weighted-average
limited partnership unit.


<PAGE>


(II) FINANCIAL CONDITION -- CAPITAL RESOURCES, LIQUIDITY, AND DISTRIBUTIONS

For the six months ended June 30, 1999, the Partnership generated operating cash
of $6.7 million (net cash provided by operating activities, plus non-liquidating
distributions  from USPEs) to meet its  operating  obligations  and maintain the
current  level of  distributions  (total for six months  ended June 30,  1999 of
approximately $5.0 million) to the partners.

During the six months  ended June 30,  1999,  the  Partnership  sold or disposed
owned  equipment and  investments  in USPEs and received  aggregate  proceeds of
$18.4 million which include $0.7 million of unused engine reserves.

The Partnership  purchased a portfolio of portable heaters for $0.2 million, and
marine  containers for $7.0 million and paid  acquisition and lease  negotiation
fees of  $0.4  million  to PLM  Financial  Services,  Inc.  (FSI or the  General
Partner),  a  wholly-owned  subsidiary  of PLM  International,  Inc.,  for  this
equipment.  The Partnership also increased its majority  interest in a portfolio
of marine  containers by $0.6 million and paid acquisition and lease negotiation
fees of $24,000.  The Partnership also purchased an investment in a trust owning
a Boeing 737 Stage III commercial aircraft for $8.6 million and paid acquisition
fees of $0.4 million to FSI for this investment.

Lessee  deposits and reserve for repairs  decreased  $0.1 million during the six
months ended June 30, 1999 when  compared to December 31, 1998.  Lessee  prepaid
deposits  decreased $0.2 million while  reserves for aircraft  engine repair and
marine vessel dry-docking increased $0.2 million.

During the six months  ended June 30, 1999,  due to  affiliates  decreased  $0.8
million of which,  $1.0  million  was paid to an  affiliated  USPE.  Of the $1.0
million  returned to the USPE, $0.7 million was unused engine reserves that were
added to sales  proceeds,  $0.2  million in security  deposits  were used to pay
outstanding account  receivables,  and the remaining $33,000 was returned to the
lessee.  The decrease of $1.0 million was offset in part, by an increase of $0.2
million in the amount due to an affiliated USPE for engine reserves.

The  current  lessee of all the  Partnership's  portable  heaters  has fallen in
arrears of the lease  payments.  The General Partner had to reserve $0.6 million
as a reserve for bad debt for this lessee.  The General  Partner is currently in
negotiations with the lessee to work out a repayment schedule or plan to collect
the past due amounts from the lessee.

The General  Partner has entered into a short-term  joint $24.5  million  credit
facility.  As of July 30, 1999,  TEC Acquisub,  Inc.,  an indirect  wholly-owned
subsidiary of PLM International, Inc., had borrowings of $17.3 million under the
short-term joint $24.5 million credit facility.  No other eligible  borrower had
any  outstanding  borrowings.  The General  Partner  believes it will be able to
renew the Committed  Bridge  Facility upon its expiration  with similar terms as
those in the current Committed Bridge Facility.

(III) EFFECTS OF YEAR 2000

It is possible that the General Partner's  currently installed computer systems,
software  products,  and other business  systems,  or those of the Partnership's
vendors,  service  providers,   and  customers,   working  either  alone  or  in
conjunction  with other  software or systems,  may not accept  input of,  store,
manipulate,  and  output  dates on or after  January  1, 2000  without  error or
interruption,  a possibility commonly known as the "Year 2000" or "Y2K" problem.
As the  Partnership  relies  substantially  on the  General  Partner's  software
systems,   applications   and  control   devices  in  operating  and  monitoring
significant  aspects of its  business,  any Year 2000  problem  suffered  by the
General  Partner  could  have a  material  adverse  effect on the  Partnership's
business, financial condition and results of operations.

The General Partner has  established a special Year 2000 oversight  committee to
review  the  impact of Year  2000  issues on its  business  systems  in order to
determine  whether  such systems will retain  functionality  after  December 31,
1999.  As of June  30,  1999,  the  General  Partner  has  completed  inventory,
assessment,  remediation  and testing stages of its Year 2000 review of its core
business  information  systems.   Specifically,  the  General  Partner  (a)  has
integrated Year  2000-compliant  programming  code into its existing  internally
customized and internally developed transaction  processing software systems and
(b) the General Partner's  accounting and asset management software systems have
been made Year 2000  compliant.  In addition,  numerous other  software  systems
provided  by vendors and  service  providers  have been  replaced  with  systems
represented by the vendor or service provider to be Year 2000 functional.  These
systems  will be fully  tested  September  by 30,  1999 and are  expected  to be
compliant.

As of June 30, 1999, the costs incurred and allocated to the Fund to become Year
2000  compliant  have not been material and does not  anticipate  any additional
Year 2000-compliant expenditures.

Some risks  associated  with the Year 2000 problem are beyond the ability of the
Partnership or General  Partner to control,  including the extent to which third
parties can address the Year 2000 problem.  The General Partner is communicating
with vendors, services providers, and customers in order to assess the Year 2000
readiness of such parties and the extent to which the  Partnership is vulnerable
to any  third-party  Year 2000  issues.  As part of this  process,  vendors  and
service providers were ranked in terms of the relative importance of the service
or product  provided.  All service  providers and vendors who were identified as
medium to high relative  importance were surveyed to determine Year 2000 status.
The General Partner has received  satisfactory  responses to Year 2000 readiness
inquiries from surveyed service providers and vendors.

It is possible that certain of the  Partnership's  equipment lease portfolio may
not be  Year  2000  compliant.  The  General  Partner  has  contacted  equipment
manufacturers of the portion of the  Partnership's  leased  equipment  portfolio
identified  as date  sensitive  to assure  Year 2000  compliance  or to  develop
remediation  strategies.  The  Partnership  does not expect that  non-Year  2000
compliance  of its leased  equipment  portfolio  will have an  adverse  material
impact on its  financial  statements.  The  General  Partner  has  surveyed  the
majority of its  lessees  and the  majority  of those  surveyed  have  responded
satisfactorily to Year 2000 readiness inquiries.

There can be no  assurance  that the  software  systems of such  parties will be
converted or made Year 2000 compliant in a timely manner. Failure by the General
Partner  or such  other  parties  to make  their  respective  systems  Year 2000
compliant  could  have a  material  adverse  effect on the  business,  financial
position, and results of operations of the Partnership.  The General Partner has
made and will  continue an ongoing  effort to recognize  and evaluate  potential
exposure  relating to third party Year 2000  noncompliance.  The General Partner
will  implement  a  contingency  plan if the  General  Partner  determines  that
third-party   noncompliance   would  have  a  material  adverse  effect  on  the
Partnership's business, financial position, or results of operation.

The General  Partner is currently  developing a contingency  plan to address the
possible failure of any systems or vendors or service providers due to Year 2000
problems.  For the purpose of such  contingency  planning,  a reasonably  likely
worst case scenarios primarily  anticipate a) an inability to access systems and
data on a temporary basis resulting in possible delay in reconciliation of funds
received or payment of monies owed,  or b) an inability to  continuously  employ
equipment  assets  due to  temporary  Year  2000  related  failure  of  external
infrastructure  necessary to the ongoing operation of the equipment. The General
Partner is evaluating  whether there are  additional  scenarios,  which have not
been  identified.  Contingency  planning  will  encompass  strategies  up to and
including  manual  processes.  The General Partner  anticipates that these plans
will be completed by September 30, 1999.

(IV)  ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial  Accounting  Standards Board issued  "Accounting for
Derivative   Instruments   and  Hedging   Activities",   (SFAS  No.  133)  which
standardizes  the  accounting  for  derivative  instruments,  including  certain
derivative instruments embedded in other contracts,  by requiring that an entity
recognize  those items as assets or  liabilities  in the  statement of financial
position and measure  them at fair value.  This  statement is effective  for all
quarters of fiscal years beginning after June 15, 1999. As of June 30, 1999, the
General  Partner  is  reviewing  the  effect  this  standard  will  have  on the
Partnership's financial statements.

FASB Statement No. 137,  "Accounting for Derivatives,  Instruments,  and Hedging
Activities  - Deferral  of the  Effective  Date of FASB  Statement  No.  133, an
amendment of FASB Statement No. 133," issued in June 1999,  defers the effective
date of Statement No. 133.  Statement No. 133, as amended,  is now effective for
all fiscal  quarters of all fiscal years  beginning  after June 15, 2000.  As of
June 30, 1999,  the General  Partner is  reviewing  the effect SFAS No. 133 will
have on the Partnership's financial statements.


<PAGE>


(V)       OUTLOOK FOR THE FUTURE

Several factors may affect the Partnership's  operating  performance in 1999 and
beyond,  including  changes in the markets for the  Partnership's  equipment and
changes in the regulatory environment in which that equipment operates.

The Partnership's operation of a diversified equipment portfolio in a broad base
of markets is  intended  to reduce its  exposure  to  volatility  in  individual
equipment sectors.

The  ability  of the  Partnership  to  realize  acceptable  lease  rates  on its
equipment in the different equipment markets is contingent on many factors, such
as specific market conditions and economic activity, technological obsolescence,
and government or other regulations.  The General Partner  continually  monitors
both the equipment markets and the performance of the Partnership's equipment in
these  markets.  The  General  Partner  may decide to reduce  the  Partnership's
exposure to equipment markets in which it determines it cannot operate equipment
to achieve  acceptable rates of return.  Alternatively,  the General Partner may
make  a  determination  to  enter  equipment   markets  in  which  it  perceives
opportunities  to  profit  from  supply/demand  instabilities  or  other  market
imperfections.

Other  factors  affecting  the  Partnership's  contribution  in 1999 and  beyond
include:

1. The Partnership is experiencing difficulty in releasing or selling two of its
commuter aircraft.

2. The decrease in demand for available marine  containers has lead to declining
lease rates.

3.  Depressed  economic  conditions in Asia have led to declining  freight rates
through the early part of 1999 for drybulk  vessels.  The market has  stabilized
and is  expected  to  improve  over  the next 2-3  years in the  absence  of new
additional orders.

4.  Railcar  loading  in North  America  have  continued  to be high,  however a
softening  in the market is expected in the second half of 1999,  which may lead
to lower utilization and lower contribution to the Partnership.

5. The  Partnership's  over-the-road dry trailers are currently in transition to
new  PLM-affiliated  short-term rental  facilities  specializing in this type of
trailer. The movement of these trailers to a new location will cause a temporary
reduction in lease revenues.

The  Partnership  intends to use  excess  cash flow,  if any,  after  payment of
operating  expenses,  pay principal and interest on debt,  redemption payment of
limited  partnership units, and cash  distributions to the partners,  to acquire
additional  equipment  during the first seven years of  Partnership  operations,
which  concludes  December 31, 2001.  The General  Partner  believes  that these
acquisitions may cause the Partnership to generate  additional earnings and cash
flow for the Partnership.

(VI)  FORWARD-LOOKING INFORMATION

Except  for the  historical  information  contained  herein,  this  Form  10-Q/A
contains forward-looking  statements that involve risks and uncertainties,  such
as  statements  of  the  Partnership's  plans,  objectives,   expectations,  and
intentions. The cautionary statements made in this Form 10-Q/A should be read as
being applicable to all related forward-looking  statements wherever they appear
in this Form 10-Q/A.  The  Partnership's  actual results could differ materially
from those discussed here.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Partnership's  primary market risk exposure is that of currency  devaluation
risk. During the six months ended June 30, 1999, 59% of the Partnership's  total
lease revenues from wholly- and  partially-owned  equipment came from non-United
States domiciled lessee's.  Most of the Partnership's  leases require payment in
United States (U.S.) currency.  If these lessees  currency  devalues against the
U.S. dollar,  the lessees could potentially  encounter  difficulty in making the
U.S. dollar denominated lease payments.




<PAGE>



                          PART II -- OTHER INFORMATION


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

           (a)    Exhibits

                  None.

           (b)    Reports on Form 8-K

                  None.



















                      (this space intentionally left blank)



<PAGE>



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 thereunto duly authorized.



                              PLM EQUIPMENT GROWTH & INCOME FUND VII

                              By:  PLM Financial Services, Inc.
                                   General Partner



Date: January 25, 2000        By:  /s/ Richard K Brock
                                   -----------------------------------
                                   Richard K Brock
                                   Vice President and
                                   Corporate Controller