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




[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
       EXCHANGE ACT OF 1934
       THE FISCAL QUARTER ENDED JUNE 30, 2000


[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
       EXCHANGE ACT OF 1934
       FOR THE TRANSITION PERIOD FROM              TO


                         COMMISSION FILE NUMBER 0-26594
                             -----------------------




                     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,
                                                                                2000                1999
                                                                           -----------------------------------
  ASSETS

  <S>                                                                      <C>                  <C>
  Equipment held for operating lease, at cost                              $       69,416       $       70,579
  Less accumulated depreciation                                                   (36,734)             (36,466)
                                                                           --------------------------------------
    Net equipment                                                                  32,682               34,113

  Cash and cash equivalents                                                         1,791                2,495
  Restricted cash                                                                      28                  111
  Accounts receivable, less allowance for doubtful accounts
      of $458 in 2000 and $382 in 1999                                              1,305                1,099
  Investments in unconsolidated special-purpose entities                           24,498               27,843
  Deferred charges, net of accumulated amortization
      of $158 in 2000 and $125 in 1999                                                245                  251
  Prepaid expenses and other assets                                                    20                   54
                                                                           --------------------------------------

        Total assets                                                       $       60,569       $       65,966
                                                                           ======================================

  LIABILITIES AND PARTNERS' CAPITAL

  Liabilities:
  Accounts payable and accrued expenses                                    $          227       $        1,267
  Due to affiliates                                                                   740                  560
  Lessee deposits and reserve for repairs                                           1,044                1,392
  Notes payable                                                                    20,000               20,000
                                                                           --------------------------------------
    Total liabilities                                                              22,011               23,219

  Partners' capital:
  Limited partners (5,323,569 limited partnership units as of
      June 30, 2000 and 5,323,819 as of December 31, 1999)                         38,558               42,747
  General Partner                                                                      --                   --
                                                                           --------------------------------------
    Total partners' capital                                                        38,558               42,747
                                                                           --------------------------------------

        Total liabilities and partners' capital                            $       60,569       $       65,966
                                                                           ======================================

</TABLE>













                 See accompanying notes to financial statements.


<PAGE>



                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                            STATEMENTS OF OPERATIONS
         (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,
                                                       2000           1999               2000            1999
                                                    --------------------------------------------------------------
  REVENUES

  <S>                                               <C>            <C>              <C>            <C>
  Lease revenue                                     $   4,047      $   5,207        $    7,704     $    10,466
  Interest and other income                                58             20                99              60
  Net gain (loss) on disposition of equipment             (10)            18             1,086               4
                                                    --------------------------------------------------------------
      Total revenues                                    4,095          5,245             8,889          10,530
                                                    --------------------------------------------------------------

  Expenses

  Depreciation and amortization                         1,535          2,609             2,972           4,902
  Repairs and maintenance                                 667            608             1,146           1,239
  Equipment operating expense                             410            755               860           1,500
  Insurance expense                                       124            108               192             243
  Management fees to affiliate                            209            239               410             521
  Interest expense                                        359            423               727             836
  General and administrative expenses
        to affiliates                                     218            190               456             381
  Other general and administrative expenses               205            149               355             287
  Provision for bad debts                                  19            680                69             716
                                                    --------------------------------------------------------------
      Total expenses                                    3,746          5,761             7,187          10,625
                                                    --------------------------------------------------------------

  Minority interests                                       --             53                --              91

  Equity in net income (loss) of unconsolidated
        special-purpose entities                         (396)         5,174              (845)          7,900
                                                    --------------------------------------------------------------

  Net income (loss)                                 $     (47)     $   4,711        $      857     $     7,896
                                                    ==============================================================

  Partners' share of net income (loss)

  Limited partners                                  $    (173)     $   4,585        $      605     $     7,644
  General Partner                                         126            126               252             252
                                                    --------------------------------------------------------------

  Total                                             $     (47)     $   4,711        $      857     $     7,896
                                                    ==============================================================

  Limited partners' net income (loss) per
      weighted-average limited partnership unit     $   (0.03)     $    0.86        $     0.11     $      1.43
                                                    ==============================================================

  Cash distributions                                $   2,637      $   2,523        $    5,043     $     5,049
                                                    ==============================================================
  Cash distributions per weighted-average
      limited partnership unit                      $    0.47      $    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, 1998 to June 30, 2000
                            (in thousands of dollars)
<TABLE>
<CAPTION>



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

  <S>                                                      <C>                   <C>                 <C>
    Partners' capital as of December 31, 1998              $   46,247            $    --             $   46,247

  Net income                                                    6,204                504                  6,708

  Purchase of limited partnership units                          (125)                --                   (125)

  Cash distribution                                            (9,579)              (504)               (10,083)
                                                           -------------------------------------------------------

    Partners' capital as of December 31, 1999                  42,747                 --                 42,747

  Net income                                                      605                252                    857

  Purchase of limited partnership units                            (3)                --                     (3)

  Cash distribution                                            (4,791)              (252)                (5,043)
                                                           -------------------------------------------------------

    Partners' capital as of June 30, 2000                  $   38,558            $    --             $   38,558
                                                           =======================================================


</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,
                                                                                        2000            1999
                                                                                    -----------------------------

  OPERATING ACTIVITIES

 <S>                                                                                 <C>             <C>
 Net income                                                                          $      857      $   7,896
 Adjustments to reconcile net income
       to net cash provided by (used in) operating activities:
   Depreciation and amortization                                                          2,972          4,902
   Net gain on disposition of equipment                                                  (1,086)            (4)
   Equity in net (income) loss from unconsolidated special-purpose entities                 845         (7,900)
   Changes in operating assets and liabilities:
     Restricted cash                                                                         83             --
     Accounts receivable, net                                                              (183)           205
     Prepaid expenses and other assets                                                       34             65
     Accounts payable and accrued expenses                                                 (113)          (235)
     Due to affiliates                                                                      180            185
     Lessee deposits and reserve for repairs                                               (348)           (57)
     Minority interests                                                                      --           (176)
                                                                                     ----------------------------
       Net cash provided by operating activities                                          3,241          4,881
                                                                                     ----------------------------

 INVESTING ACTIVITIES

 Payments for purchase of equipment and capitalized improvements                         (3,823)        (7,777)
 Investment in and equipment purchased and placed in
     unconsolidated special-purpose entities                                                 --         (8,974)
 Distribution from unconsolidated special-purpose entities                                2,500          1,837
 Distribution from liquidation of unconsolidated special-purpose entities                    --         15,855
 Payments of acquisition fees to affiliate                                                 (125)          (342)
 Payments of lease negotiation fees to affiliate                                            (28)           (76)
 Proceeds from disposition of equipment                                                   2,577          1,658
                                                                                     ---------------------------
       Net cash provided by investing activities                                          1,101          2,181
                                                                                     ----------------------------

 FINANCING ACTIVITIES

 Cash distribution paid to limited partners                                              (4,791)        (4,797)
 Cash distribution paid to General Partner                                                 (252)          (252)
 Purchase of limited partnership units                                                       (3)          (120)
                                                                                     ----------------------------
       Net cash used in financing activities                                             (5,046)        (5,169)
                                                                                     ----------------------------

 Net (decrease) increase in cash and cash equivalents                                      (704)         1,893
 Cash and cash equivalents at beginning of period                                         2,495            404
                                                                                     ---------------------------

 Cash and cash equivalents at end of period                                          $    1,791      $   2,297
                                                                                     ============================

 SUPPLEMENTAL INFORMATION

 Interest paid                                                                       $      727      $     836
                                                                                     =============================



</TABLE>


                 See accompanying notes to financial statements.


<PAGE>


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2000

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, 2000 and December 31, 1999, the statements of
operations for the three months and six months ended June 30, 2000 and 1999, the
statements of changes in partners' capital for the period from December 31, 1998
to June 30, 2000, and the statements of cash flows for the six months ended June
30, 2000 and 1999. 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 for the  year  ended  December  31,  1999,  on file at the  Securities  and
Exchange Commission.

2.   SCHEDULE OF PARTNERSHIP PHASES

Beginning in the  Partnership's  seventh year of operations,  which commences on
January 1, 2002,  the General  Partner  will stop  reinvesting  excess cash into
additional  equipment.  Surplus cash, if any, 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 eleventh year of operations. The Partnership will terminate on
December 31, 2013, unless  terminated  earlier upon sale of all equipment and by
certain other events.

3.   PURCHASE OF LIMITED PARTNERSHIP UNITS

In  1999,  the  Partnership  agreed  to  purchase  approximately  1,000  limited
partnership  units in 2000 for an  aggregate  purchase  price of up to  $10,000.
During the six months ended June 30, 2000, the Partnership purchased 250 limited
partnership units for $3,000. The General Partner may purchase  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 the three
months ended June 30, 2000 and 1999, cash distributions totaled $2.6 million and
$2.5 million,  respectively.  For each of the six months ended June 30, 2000 and
1999,  cash  distributions  totaled $5.0  million.  Cash  distributions  of $4.2
million to the limited  partners  during the six months ended June 30, 2000 were
deemed to be a return of capital.  None of the cash distributions to the limited
partners during the six months ended June 30, 1999 were deemed to be a return of
capital.

Cash  distributions  related to the results from the second  quarter of 2000, of
$1.7 million, will be paid during the third quarter of 2000.

5.   Transactions with General Partner and Affiliates

The balance due to  affiliates  as of June 30, 2000 included $0.2 million due to
FSI and its affiliates  for  management  fees and $0.6 million due to affiliated
unconsolidated  special-purpose  entities (USPEs). The balance due to affiliates
as of December 31, 1999 included $0.1 million due to FSI and its  affiliates for
management fees and $0.5 million due to an affiliated USPE.

The Partnership's  proportional share of USPE-affiliated management fees of $0.1
million was payable as of June 30, 2000 and December 31, 1999.



<PAGE>



                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2000

5.       TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES (CONTINUED)

The Partnership's  proportional share of the affiliated expenses incurred by the
USPEs  during 2000 and 1999 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,
                                                       2000           1999               2000           1999
                                                    --------------------------------------------------------------
  <S>                                               <C>            <C>                <C>                  <C>
  Management fees                                   $      87      $      46          $    168        $    105
  Data processing and administrative
     expenses                                              18             15                41              38
</TABLE>


The  Partnership and USPEs accrued or paid FSI $0.2 million and $0.8 million for
equipment  acquisition  and lease  negotiation  fees during the six months ended
June 30, 2000 and 1999, respectively.

6.   EQUIPMENT

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

                                                   June 30,         December 31,
                                                   2000                1999
                                               ---------------------------------

  Marine vessels                               $   22,212          $    22,212
  Trailers                                         16,687               16,895
  Marine containers                                15,375               12,498
  Railcars                                          9,659                9,677
  Aircraft                                          5,483                9,297
                                               -----------         ------------
                                                   69,416               70,579
  Less accumulated depreciation                   (36,734)             (36,466)
                                               -----------         ------------
      Net equipment                            $   32,682          $    34,113
                                               ===========         ============

As of June 30, 2000,  all owned  equipment in the  Partnership's  portfolio  was
either  on  lease or  operating  in  PLM-affiliated  short-term  trailer  rental
facilities, except for 14 railcars. As of December 31, 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 a commuter
aircraft and ten  railcars.  The net book value of the  equipment  off lease was
$0.2  million  and $1.5  million  as of June 30,  2000 and  December  31,  1999,
respectively.

During the six months  ended June 30, 2000,  the  Partnership  purchased  marine
containers for $2.8 million and paid acquisition fees of $0.1 million to FSI.

During the six months ended June 30, 2000, the Partnership disposed of or sold a
commuter aircraft, a railcar, marine containers,  and trailers with an aggregate
net book value of $1.4  million for $2.5  million.  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.

On May 24,  2000,  FSI,  on behalf  of the  Partnership,  entered  into an asset
purchase  agreement  to sell the  refrigerated  and dry  trailer  assets  of the
Partnership. Closing of the transaction is contingent on numerous conditions. If
the sale is completed, the General Partner estimates that the Partnership's sale
proceeds  to be  approximately  $8.2  million  and  will  result  in a  gain  of
approximately  $2.7 million.  Since the sale of the trailers is contingent  upon
certain  conditions being met, the  Partnership's  refrigerated and dry trailers
are not classified as assets held for sale.


<PAGE>


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2000

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,
                                                                                                        2000             1999
                                                                                                  ---------------------------------
                    <S>                                                                             <C>              <C>
                    38% interest in a trust owning a Boeing 737-300 Stage III commercial
                              aircraft                                                              $    7,230       $    7,974
                    75% interest in an entity owning marine containers                                   5,936            6,656
                    50% interest in a trust owning a MD-82 Stage III commercial aircraft                 4,408            5,066
                    80% interest in an entity owning a dry bulk-carrier marine vessel                    3,724            4,224
                    44% interest in an entity owning a dry bulk-carrier marine vessel                    1,728            1,917
                    50% interest in a trust owning a MD-82 Stage III commercial aircraft                 1,354            1,808
                    50%  interest  in a trust that owned  four  Boeing  737-200A Stage II
                              commercial aircraft                                                           73              122
                    25% interest in a trust that owned four Boeing 737-200A Stage II
                              commercial aircraft                                                           48               79
                    24% interest in a trust that owned a Boeing 767-200ER Stage III
                              commercial aircraft                                                           (3)              (3)
                                                                                                    -----------------------------
                        Net investments                                                             $   24,498       $   27,843
                                                                                                    =============================
</TABLE>

As of June 30,  2000,  all  jointly-owned  equipment in the  Partnership's  USPE
portfolio was on lease. As of December 31, 1999, all jointly-owned  equipment in
the  Partnership's  USPE  portfolio  was on lease  except  for a Boeing  737-300
commercial aircraft with a net investment value of $8.0 million.

For the six  months  ended  June  30,  2000,  all  jointly-owned  equipment  was
accounted  for under the equity method of  accounting.  For the six months ended
June 30, 1999,  certain  jointly-owned  equipment of which the Partnership had a
controlling  interest greater than 50% was accounted for under the consolidation
method of accounting.

8.   OPERATING SEGMENTS

The  Partnership  operates in five primary  operating  segments:  marine  vessel
leasing,  trailer  leasing,   aircraft  leasing,  railcar  leasing,  and  marine
container  leasing.  Each  equipment  leasing  segment  engages in short-term to
mid-term operating leases to a variety of customers.









                      (This space intentionally left blank)


<PAGE>


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2000

8.   OPERATING SEGMENTS (CONTINUED)

THE FOLLOWING  TABLES PRESENT A SUMMAry of the operating  segments (in thousands
of dollars):
<TABLE>
<CAPTION>


                                            Marine                                    Marine
                                            Vessel   Trailer    Aircraft  Railcar    Container
     For the quarter ended June 30,        Leasing   Leasing    Leasing   Leasing    Leasing    Other<F1>1  Total
     2000
     ----------------------------------    --------- ---------  --------- ---------  --------- ---------  -----------

     REVENUES
       <S>                                 <C>       <C>        <C>       <C>        <C>       <C>        <C>
       Lease revenue                       $  1,424  $    918   $    271  $    603   $    831  $     --   $  4,047
       Interest income and other                 --        --         --        --         --        58         58
       Gain (loss) on disposition of             --       (38)         1        --         27        --        (10 )
     equipment
                                           ------------------------------------------------------------------------
         Total revenues                       1,424       880        272       603        858        58      4,095

     COSTS AND EXPENSES
       Operations support                       727       269         17       176          2        10      1,201
       Depreciation and amortization            341       314        154       157        562         7      1,535
       Interest expense                          --        --         --        --         --       359        359
       Management fees to affiliate              71        49         14        34         41        --        209
       General and administrative expenses       22       178          3        27         --       193        423
       Provision for (recovery of) bad debts     --        40         --        (9)        --       (12)        19
                                           ------------------------------------------------------------------------
         Total costs and expenses             1,161       850        188       385        605       557      3,746
                                           ------------------------------------------------------------------------
     Equity in net income (loss) of USPEs       (33)       --       (418)       --         55        --       (396)
                                           ------------------------------------------------------------------------
     Net income (loss)                     $    230  $     30   $   (334) $    218   $    308  $   (499)  $    (47)
                                           ========================================================================

     Total assets as of June 30, 2000      $ 13,170  $  7,407   $ 13,900  $  4,409   $ 19,608  $  2,075   $ 60,569
                                           ========================================================================

                                            Marine                                    Marine
                                            Vessel   Trailer    Aircraft  Railcar    Container
     For the quarter ended June 30,        Leasing   Leasing    Leasing   Leasing    Leasing    Other<F2>2  Total
     1999
     ----------------------------------    --------- ---------  --------- ---------  --------- ---------  -----------

     REVENUES
       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 debts     --        52         --        (5)        --       633        680
                                           ------------------------------------------------------------------------
         Total costs and expenses             1,873       894        382       392        868     1,352      5,761
                                           ------------------------------------------------------------------------
     Minority interests                          52        --         --        --          1        --         53
     Equity in net income 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, interest expense, and certain general and administrative and operations
support expenses.
<F2>
2 Includes  interest income and costs not identifiable to a particular  segment,
such as interest expense,  and certain general and administrative and operations
support  expenses.  Also  includes  lease  revenues  and  expenses  from modular
buildings,  portable heaters,  and aggregate net income from an investment in an
entity that owned a mobile offshore drilling unit.
</FN>
</TABLE>



<PAGE>


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2000

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


                                             Marine                                    Marine
                                             Vessel    Trailer    Aircraft  Railcar    Container
     For the six months ended June 30,       Leasing   Leasing    Leasing   Leasing    Leasing    Other<F1>1  Total
     2000
     ------------------------------------    --------  ---------  --------  ---------  --------  ---------  ----------


     <S>                                     <C>       <C>        <C>       <C>        <C>       <C>        <C>
     REVENUES
       Lease revenue                         $ 2,683   $  1,796   $   542   $  1,251   $ 1,432   $     --   $  7,704
       Interest income and other                  --         --        --         --        --         99         99
       Gain (loss) on disposition of              --        (58)    1,118         (1)       27         --      1,086
         equipment
                                             ------------------------------------------------------------------------
         Total revenues                        2,683      1,738     1,660      1,250     1,459         99      8,889

     COSTS AND EXPENSES
       Operations support                      1,376        491        26        281         4         20      2,198
       Depreciation and amortization             682        631       353        314       979         13      2,972
       Interest expense                           --         --        --         --        --        727        727
       Management fees to affiliate              134         97        28         80        71         --        410
       General and administrative expenses        32        374         6         46        --        353        811
       Provision for (recovery of) bad debts      --         84        --         (2)       --        (13)        69
                                             ------------------------------------------------------------------------
         Total costs and expenses              2,224      1,677       413        719     1,054      1,100      7,187
                                             ------------------------------------------------------------------------
     Equity in net income (loss) of USPEs       (142)        --      (811)        --       109         (1)      (845)
                                             ------------------------------------------------------------------------
     Net income (loss)                       $   317   $     61   $   436   $    531   $   514   $ (1,002)  $    857
                                             ========================================================================

     Total assets as of June 30, 1999        $13,170   $  7,407   $13,900   $  4,409   $19,608   $  2,075   $ 60,569
                                             ========================================================================



                                             Marine                                    Marine
                                             Vessel    Trailer    Aircraft  Railcar    Container
     For the six months ended June 30,       Leasing   Leasing    Leasing   Leasing    Leasing    Other<F2>2  Total
     1999
     ------------------------------------    --------  ---------  --------  ---------  --------  ---------  ----------

     REVENUES
       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 debts      --         94        --         (9)       --        631        716
                                             ------------------------------------------------------------------------
         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, interest expense, and certain general and administrative and operations
support  expenses.  Also includes  expenses from an investment in an entity that
owned a mobile offshore drilling unit.
<F2>
2 Includes  interest income and costs not identifiable to a particular  segment,
such as interest expense,  and certain general and administrative and operations
support  expenses.  Also  includes  lease  revenues  and  expenses  from modular
buildings,  portable heaters,  and aggregate net income from an investment in an
entity that owned a mobile offshore drilling unit.

</FN>
</TABLE>

<PAGE>


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2000

9.   DEBT

The  Partnership  has a warehouse  facility,  which is shared with PLM Equipment
Growth  Fund VI,  Professional  Lease  Management  Income  Fund I, LLC,  and TEC
Acquisub,  Inc., an indirect  wholly-owned  subsidiary  of the General  Partner.
Borrowings  under this  facility  by the other  eligible  borrowers  reduces the
amount  available to be borrowed by the  Partnership.  All borrowings under this
facility are guaranteed by the General Partner.  On June 30, 2000, this facility
was extended to September 30, 2000 and the amount available to be borrowed under
the facility was reduced from $24.5 million to $9.5 million. The General Partner
has been  notified by the lender that this facility will not be renewed upon its
expiration.  The General  Partner is currently  negotiating  with a lender for a
warehouse credit facility of $10.0-$15.0 million with similar terms. The General
Partner believes the facility will be in place by September 30, 2000.

As of June 30, 2000, the PLM Equipment Growth Fund VI had outstanding borrowings
of $0.6 million and TEC Acquisub,  Inc. had borrowings of $8.9 million under the
warehouse  facility.  No other eligible borrower had any outstanding  borrowings
under the warehouse 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,  2000  was   5,323,569   and   5,323,651,   respectively.   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.

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 in January
1997 in the Circuit Court of Mobile County, Mobile,  Alabama, Case No. CV-97-251
(the Koch action).  The named plaintiffs are six individuals who invested in 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),  each a  California  limited  partnership  for which the
Company's  wholly-owned  subsidiary,  FSI,  acts  as the  General  Partner.  The
complaint  asserts causes of action against all defendants for fraud and deceit,
suppression, negligent misrepresentation,  negligent and intentional breaches of
fiduciary duty, unjust enrichment, conversion, and conspiracy. 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  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. In December 1997, the court granted defendants motion to
compel  arbitration of the named  plaintiffs'  claims,  based on an agreement to
arbitrate  contained in the limited  partnership  agreement of each Partnership.
Plaintiffs appealed this decision,  but in June 1998 voluntarily dismissed their
appeal pending settlement of the Koch action, as discussed below.

In June 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 the Funds. The complaint  alleges the same facts and the same causes
of action as in the Koch action, plus


<PAGE>


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2000

11.  CONTINGENCIES (CONTINUED)

additional  causes of action against all of the  defendants,  including  alleged
unfair and deceptive  practices and violations of state  securities law. In July
1997, defendants filed a petition (the petition) in federal district court under
the Federal Arbitration Act seeking to compel arbitration of plaintiff's claims.
In October  1997,  the district  court  denied the  Company's  petition,  but in
November 1997, agreed to hear the Company's motion for reconsideration. Prior to
reconsidering  its order,  the district  court  dismissed  the petition  pending
settlement  of the Romei  action,  as  discussed  below.  The state court action
continues to be stayed pending such resolution.

In February 1999 the parties to the Koch and Romei actions  agreed to settle the
lawsuits,  with  no  admission  of  liability  by any  defendant,  and  filed  a
Stipulation  of Settlement  with the court.  The  settlement is divided into two
parts,  a  monetary  settlement  and  an  equitable  settlement.   The  monetary
settlement  provides  for  a  settlement  and  release  of  all  claims  against
defendants  in  exchange  for payment for the benefit of the class of up to $6.6
million.  The final settlement  amount will depend on the number of claims filed
by class members,  the amount of the administrative costs incurred in connection
with the  settlement,  and the amount of attorneys' fees awarded by the court to
plaintiffs'  attorneys.  The Company will pay up to $0.3 million of the monetary
settlement,  with  the  remainder  being  funded  by an  insurance  policy.  For
settlement  purposes,  the monetary  settlement 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 monetary  settlement,  if  approved,  will go forward  regardless  of
whether the equitable settlement is approved or not.

The equitable  settlement  provides,  among other things, for: (a) the extension
(until  January 1, 2007) of the date by which FSI must complete  liquidation  of
the Funds' equipment,  (b) the extension (until December 31, 2004) of the period
during which FSI can reinvest the Funds' funds in additional  equipment,  (c) an
increase of up to 20% in the amount of front-end fees (including acquisition and
lease  negotiation  fees)  that  FSI  is  entitled  to  earn  in  excess  of the
compensatory   limitations   set   forth  in  the  North   American   Securities
Administrator's  Association's Statement of Policy; (d) a one-time repurchase by
each of Funds V, VI and VII of up to 10% of that partnership's outstanding units
for 80% of net asset  value per unit;  and (e) the  deferral of a portion of the
management fees paid to an affiliate of FSI until, if ever, certain  performance
thresholds have been met by the Funds.  Subject to final court  approval,  these
proposed  changes  would be made as  amendments  to each  Partnership's  limited
partnership  agreement  if  less  than  50%  of the  limited  partners  of  each
Partnership vote against such amendments.  The limited partners will be provided
the  opportunity  to vote against the  amendments by following the  instructions
contained  in  solicitation  statements  that will be mailed to them after being
filed with the Securities and Exchange Commission. The equitable settlement also
provides for payment of additional  attorneys' fees to the plaintiffs' attorneys
from  Partnership  funds  in  the  event,  if  ever,  that  certain  performance
thresholds have been met by the Funds.  The equitable  settlement 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.

The court preliminarily  approved the monetary and equitable settlements in June
1999. The monetary settlement remains subject to certain  conditions,  including
notice to the monetary class and final  approval by the court  following a final
fairness  hearing.   The  equitable   settlement   remains  subject  to  certain
conditions, including: (a) notice to the equitable class, (b) disapproval of the
proposed  amendments  to the  partnership  agreements  by less  than  50% of the
limited  partners  in one or more of  Funds V, VI,  and  VII,  and (c)  judicial
approval  of the  proposed  amendments  and  final  approval  of  the  equitable
settlement by the court following a final fairness  hearing.  No hearing date is
currently  scheduled for the final fairness  hearing.  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  has initiated  litigation in various  official forums in India
against the defaulting Indian airline lessees to repossess  Partnership property
and to recover  damages for  failure to pay rent and  failure to  maintain  such
property in accordance with relevant lease contracts. The Partnership has



<PAGE>
                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2000

11.  CONTINGENCIES (CONTINUED)

repossessed its property previously leased to such airline,  and the airline has
ceased  operations.  In response to the Partnership's  collection  efforts,  the
airline  filed   counter-claims   against  the  Partnership  in  excess  of  the
Partnership's  claims against the airline. The General Partner believes that the
airlines'  counterclaims  are completely  without merit, and the General Partner
will vigorously defend against such counterclaims.  The General Partner believes
the likelihood of an unfavorable outcome from the counterclaims is remote.

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











                      (This space intentionally left blank)



<PAGE>


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

(I)  RESULTS OF OPERATIONS

In September 1999, PLM Financial  Services,  Inc. (FSI or the General  Partner),
amended the corporate-by-laws of certain unconsolidated special-purpose entities
(USPEs) in which PLM Equipment  Growth & Income Fund VII (the  Partnership),  or
any affiliated program,  owns an interest greater than 50%. The amendment to the
corporate-by-laws  provided that all decisions  regarding  the  acquisition  and
disposition of the investment as well as other significant business decisions of
that  investment  would  be  permitted  only  upon  unanimous   consent  of  the
Partnership  and all the  affiliated  programs  that  have an  ownership  in the
investment (the Amendment). As such, although the Partnership may own a majority
interest in a USPE, the Partnership does not control its management and thus the
equity method of accounting  will be used after adoption of the Amendment.  As a
result of the Amendment,  as of September 30, 1999, all jointly owned  equipment
in which the Partnership owned a majority interest, which had been consolidated,
were  reclassified  to investments in USPEs.  Lease revenues and direct expenses
for jointly owned  equipment in which the Partnership  held a majority  interest
were reported under the consolidation  method of accounting during the three and
six  months  ended  June 30,  1999 and were  included  with the owned  equipment
operations. For the three and six and months ended June 30, 2000, lease revenues
and direct  expenses for these  entities are reported under the equity method of
accounting and are included with the operations of the USPEs.

COMPARISON  OF THE  PARTNERSHIP'S  OPERATING  RESULTS FOR THE THREE MONTHS ENDED
JUNE 30, 2000 AND 1999

(A)  Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as repairs  and  maintenance,
equipment operating,  and asset-specific  insurance expenses) on owned equipment
decreased during the three months ended June 30, 2000, when compared to the same
period of 1999.  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 they 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,
                                      2000             1999
                                   ----------------------------

  Marine containers                $    829          $   809
  Marine vessels                        697              870
  Trailers                              649              803
  Railcars                              427              495
  Aircraft                              254              464
  Portable heaters                       --              301
  Modular buildings                      --                5

Marine containers: Lease revenues and direct expenses for marine containers were
$0.8 million and $2,000 respectively,  for the three months ended June 30, 2000,
compared to $0.8 million and $0, respectively, during the same period of 1999.

The September 30, 1999 Amendment that changed the accounting  method of majority
held equipment from the consolidation  method of accounting to the equity method
of accounting impacted the reporting of lease revenues for marine containers. As
a result of the  Amendment,  during the three months ended June 30, 2000,  lease
revenues  decreased  $0.4 million when compared to the same period of 1999.  The
decrease in lease revenues  caused by the Amendment was offset by an increase in
marine  containers  lease  revenues of $0.4  million  caused by the  purchase of
additional equipment during 1999 and 2000.

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $1.4
million and $0.7  million,  respectively,  for the three  months  ended June 30,
2000, compared to $1.9 million and $1.1 million,  respectively,  during the same
period of 1999.

The September 30, 1999 Amendment that changed the accounting  method of majority
held equipment from the consolidation  method of accounting to the equity method
of accounting  impacted the reporting of lease  revenues and direct  expenses of
one marine vessel.  As a result of the Amendment,  during the three months ended
June 30,  2000,  lease  revenues  decreased  $0.5  million  and direct  expenses
decreased $0.4 million when compared to the same period of 1999.

Trailers:  Trailer lease revenues and direct expenses were $0.9 million and $0.3
million,  respectively,  for the three months  ended June 30, 2000,  compared to
$1.0 million and $0.2 million,  respectively,  during the same period of 1999. A
decrease in trailer lease revenues of $0.1 million was due to lower utilization.

Railcars:  Railcar lease revenues and direct expenses were $0.6 million and $0.2
million,  respectively,  for the three months ended June 30, 2000 and 1999.  The
decrease in railcar  lease  revenues  of $45,000 was due to the  increase in the
number of  off-lease  railcars  during the three months ended June 30, 2000 when
compared to the same period of 1999.

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $0.3 million and
$17,000,  respectively,  for the three months  ended June 30, 2000,  compared to
$0.5  million and  $5,000,  respectively,  during the same  period of 1999.  The
decrease of $0.2 million in aircraft lease revenues was due to the sale of three
commercial aircraft during 1999.

Portable heaters: The Partnership sold all the portable heaters during September
1999.

(B)  Indirect Expenses Related to Owned Equipment Operations

Total  indirect  expenses  were $2.5 million for the three months ended June 30,
2000,  a decrease  from $4.3  million for the same  period in 1999.  Significant
variances are explained as follows:

     (i) A $1.1 million decrease in depreciation and amortization  expenses from
1999 levels reflects the decrease of $0.3 million caused by the double-declining
balance  method of  depreciation  which results in greater  depreciation  in the
first  years an asset is owned,  a decrease  of $0.3  million due to the sale of
equipment  during 2000 and 1999,  and a decrease of $0.7  million as a result of
the  Amendment  which  changed  the  accounting  method used for  majority  held
equipment  from the  consolidation  method of accounting to the equity method of
accounting.  These decreases were offset in part, by an increase of $0.2 million
in  depreciation  and  amortization  expenses  resulting  from the  purchase  of
additional equipment during 2000 and 1999.

     (ii)A $0.7  million  decrease in the  provision  for bad debts based on the
General  Partner's  evaluation of the  collectability  of  receivables  due when
compared to the same period of 1999.  During 1999, the General Partner increased
the provision for bad debt based on the  collectability  of receivables due from
the lessee of the portable heaters.  A similar provision did not have to be made
during 2000 due to the sale of all this equipment during 1999.

     (iii)  A $0.1  million  decrease  in  interest  expense  was due to a lower
average  outstanding debt balance in the second quarter of 2000 when compared to
the same period of 1999.

     (iv)A $0.1 million increase in general and administrative  expenses was due
to higher costs associated with the transition of Partnership  trailers to three
new PLM short-term trailer rental facilities.

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

The net loss on  disposition of equipment for the second quarter of 2000 totaled
$10,000,  and resulted from the sale of marine  containers  and trailers with an
aggregate net book value of $0.1 million for proceeds of $0.1  million.  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.


<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 Three Months
                                                   Ended June 30,
                                              2000              1999
                                            ----------------------------

  Marine containers                         $     55         $     --
  Mobile offshore drilling unit                   --               50
  Marine vessels                                  (33)              --
  Aircraft                                       (418)           5,124
                                            --------------  -------------
    Equity in net income (loss) of USPEs    $    (396)       $   5,174

Marine containers:  The September 30, 1999 Amendment that changed the accounting
method of majority held equipment from the consolidation method of accounting to
the equity method of accounting, affected the lease revenues and direct expenses
of marine  containers  for the three months ended June 30, 2000 when compared to
the same period of 1999.  During the three  months  ended June 30,  2000,  lease
revenues of $0.3 million were offset by depreciation  expense,  direct expenses,
and administrative expenses of $0.3 million. Marine container lease revenues and
depreciation expense,  direct expenses, and administrative expenses for the same
period of 1999 were reported under the consolidation  method of accounting under
Owned Equipment Operations.

Mobile offshore drilling unit: The Partnership's  interest in an entity owning a
mobile offshore drilling unit was sold during the fourth quarter of 1999. During
the three months ended June 30, 1999, lease revenues of $0.1 million were offset
by depreciation expense,  direct expenses,  and administrative  expenses of $0.1
million.

Marine vessels:  During the three months ended June 30, 2000,  lease revenues of
$0.9  million  were  offset  by  depreciation  expense,   direct  expenses,  and
administrative  expenses of $0.9 million.  During the same period of 1999, lease
revenues of $0.2 million were offset by depreciation  expense,  direct expenses,
and administrative expenses of $0.2 million.

The increase in marine  vessel lease  revenues of $0.6 million and  depreciation
expense, direct expenses, and administrative expenses of $0.6 million during the
three months ended June 30, 2000, was caused by the September 30, 1999 Amendment
that  changed  the  accounting  method  of  majority  held  equipment  from  the
consolidation  method of accounting  to the equity method of accounting  for one
marine vessel. The lease revenues and depreciation expense, direct expenses, and
administrative expenses for the majority owned marine vessel were reported under
the consolidation  method of accounting under Owned Equipment  Operations during
the three months ended June 30, 1999.

Aircraft:  During the three months ended June 30, 2000,  lease  revenues of $0.6
million were offset by depreciation expense, direct expenses, and administrative
expenses of $1.0 million. During the same period of 1999, lease revenues of $0.6
million and the gain from the sale of the Partnership's interest in a trust that
owned  a  767-200ER   commercial   aircraft  of  $5.8  million  were  offset  by
depreciation  expense,  direct  expenses,  and  administrative  expenses of $1.3
million.  Lease  revenues  decreased  $0.1  million  due  to  the  sale  of  the
Partnership's  investment  in a trust that owned a Boeing  767-200ER  commercial
aircraft  during the second  quarter 1999.  This decrease in lease  revenues was
offset by an increase of $0.1 million in lease  revenues due to a Boeing 737-300
being on-lease in the second quarter of 2000 that was off-lease  during the same
period of 1999.  The decrease in expenses of $0.3 million was  primarily  due to
lower depreciation expense. The sale of the Partnership's  interest in the trust
during 1999 caused depreciation  expense to decrease $0.1 million.  Depreciation
expense  decreased  an  additional  $0.3  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. The decreases were offset, in part, by the
Partnership's  investment  in an additional  trust during the second  quarter of
1999 which increased depreciation expense $0.1 million.


<PAGE>



(E)  Net Income (Loss)

As a result of the foregoing,  the Partnership had a net loss of $47,000 for the
three  months  ended June 30,  2000,  compared  to a net income of $4.7  million
during the same period of 1999. 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 2000 is not necessarily  indicative of future periods.  In
the second  quarter of 2000,  the  Partnership  distributed  $2.5 million to the
limited partners, or $0.47 per weighted-average limited partnership unit.

COMPARISON OF THE PARTNERSHIP'S  OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE
30, 2000 and 1999

(A)  Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as repairs  and  maintenance,
equipment operating,  and asset-specific  insurance expenses) on owned equipment
decreased  during the six months ended June 30, 2000,  when compared to the same
period of 1999. The following table presents lease revenues less direct expenses
by segment (in thousands of dollars):

                                              For the Six Months
                                                Ended June 30,
                                            2000             1999
                                           ----------------------------

  Marine containers                         $  1,428        $   1,267
  Marine vessels                               1,307            2,025
  Trailers                                     1,305            1,580
  Railcars                                       970            1,047
  Aircraft                                       516              964
  Portable heaters                                --              614
  Modular buildings                               --               10

Marine containers: Lease revenues and direct expenses for marine containers were
$1.4 million and $4,000,  respectively,  for the six months ended June 30, 2000,
compared to $1.3 million and $0, respectively, during the same period of 1999.

The September 30, 1999 Amendment that changed the accounting  method of majority
held equipment from the consolidation  method of accounting to the equity method
of accounting impacted the reporting of lease revenues for marine containers. As
a result of the  Amendment,  during the six months  ended June 30,  2000,  lease
revenues  decreased  $0.9 million when compared to the same period of 1999.  The
decrease in lease revenues  caused by the Amendment was offset by an increase in
marine  containers  lease  revenues of $1.0  million  caused by the  purchase of
additional equipment during 1999 and 2000.

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $2.7
million and $1.4 million,  respectively, for the six months ended June 30, 2000,
compared to $4.2 million and $2.2 million, respectively,  during the same period
of 1999.

The September 30, 1999 Amendment that changed the accounting  method of majority
held equipment from the consolidation  method of accounting to the equity method
of accounting  impacted the reporting of lease  revenues and direct  expenses of
one marine  vessel.  As a result of the  Amendment,  during the six months ended
June 30,  2000,  lease  revenues  decreased  $1.1  million  and direct  expenses
decreased $0.9 million when compared to the same period of 1999.

In  addition,  a decline in lease  revenues  of $0.4  million  was caused by the
required  dry-docking  of one  of  the  Partnership's  two  wholly-owned  marine
vessels.  During the  dry-docking  period,  this marine  vessel did not earn any
lease revenues.

Trailers:  Trailer lease revenues and direct expenses were $1.8 million and $0.5
million,  respectively, for the six months ended June 30, 2000, compared to $2.0
million  and $0.5  million,  respectively,  during  the same  period of 1999.  A
decrease in trailer lease revenues was due to lower utilization.

Railcars:  Railcar lease revenues and direct expenses were $1.3 million and $0.3
million,  respectively,  for the six months  ended June 30,  2000 and 1999.  The
decrease in railcar  lease  revenues of $0.1  million was due to the increase in
the number of off-lease  railcars during the six months ended June 30, 2000 when
compared to the same period of 1999.

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $0.5 million and
$26,000,  respectively, for the six months ended June 30, 2000, compared to $1.0
million and $10,000, respectively,  during the same period of 1999. The decrease
of  $0.4  million  in  aircraft  lease  revenues  was due to the  sale of  three
commercial aircraft during 1999.

Portable heaters: The Partnership sold all the portable heaters during September
1999.

(B)  Indirect Expenses Related to Owned Equipment Operations

Total  indirect  expenses  were $5.0  million for the six months  ended June 30,
2000,  a decrease  from $7.6  million for the same  period in 1999.  Significant
variances are explained as follows:

     (i) A $1.9 million decrease in depreciation and amortization  expenses from
1999 levels reflects the decrease of $0.5 million caused by the double-declining
balance  method of  depreciation  which results in greater  depreciation  in the
first  years an asset is owned,  a decrease  of $0.6  million due to the sale of
equipment  during 2000 and 1999,  and a decrease of $1.4  million as a result of
the  Amendment  which  changed  the  accounting  method used for  majority  held
equipment  from the  consolidation  method of accounting to the equity method of
accounting. These decreases were offset, in part, by an increase of $0.6 million
in  depreciation  and  amortization  expenses  resulting  from the  purchase  of
additional equipment during 2000 and 1999.

     (ii)A $0.6  million  decrease in the  provision  for bad debts based on the
General  Partner's  evaluation of the  collectability of receivables due. During
1999,  the General  Partner  increased  the  provision for bad debt based on the
collectability  of receivables  due from the lessee of the portable  heaters.  A
similar  provision  did not have to be made  during  2000 due to the sale of all
this equipment during 1999.

     (iii) A $0.1  million  decrease in  management  fees was due to lower lease
revenues earned by the  Partnership  during the quarter ended June 30, 2000 when
compared to the same period of 1999.

     (iv)A $0.1 million  decrease in interest expense was due to a lower average
outstanding debt balance in the second quarter of 2000 when compared to the same
period of 1999

     (v) A $0.1 million  increase in  administrative  expenses was due to higher
costs  associated  with the transition of Partnership  trailers to three new PLM
short-term trailer rental facilities.

(C)  Net Gain on Disposition of Owned Equipment

The net gain on  disposition of equipment for the six months ended June 30, 2000
totaled $1.1  million,  and  resulted  from the sale of a commuter  aircraft,  a
railcar,  marine  containers,  and trailers  with an aggregate net book value of
$1.4  million  for  proceeds of $2.5  million.  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,  railcars, modular buildings, and trailers
with an aggregate net book value of $1.7 million for proceeds of $1.7 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,
                                            2000              1999
                                          ----------------------------

Marine containers $ 109 $ -- Mobile offshore drilling unit (1) 98 Marine vessels
(141) (22) Aircraft (812) 7,824 ------------- ------------- Equity in net income
(loss) of USPEs $ (845) $ 7,900 ============= =============

Marine containers:  The September 30, 1999 Amendment that changed the accounting
method of majority held equipment from the consolidation method of accounting to
the equity method of accounting, affected the lease revenues and direct expenses
of marine containers for the six months ended June 30, 2000 when compared to the
same period of 1999.  During the six months ended June 30, 2000,  lease revenues
of $0.7  million  were offset by  depreciation  expense,  direct  expenses,  and
administrative  expenses of $0.6 million.  Marine  container  lease revenues and
depreciation expense,  direct expenses, and administrative expenses for the same
period of 1999 were reported under the consolidation  method of accounting under
Owned Equipment Operations.

Mobile offshore drilling unit: The Partnership's  interest in an entity owning a
mobile offshore drilling unit was sold during the fourth quarter of 1999. 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.

Marine  vessels:  During the six months ended June 30, 2000,  lease  revenues of
$1.6  million  were  offset  by  depreciation  expense,   direct  expenses,  and
administrative  expenses of $1.8 million.  During the same period of 1999, lease
revenues of $0.4 million were offset by depreciation  expense,  direct expenses,
and administrative expenses of $0.4 million.

The increase in marine  vessel lease  revenues of $1.2 million and  depreciation
expense, direct expenses, and administrative expenses of $1.3 million during the
six months ended June 30, 2000,  was caused by the September 30, 1999  Amendment
that  changed  the  accounting  method  of  majority  held  equipment  from  the
consolidation  method of accounting  to the equity method of accounting  for one
marine vessel. The lease revenues and depreciation expense, direct expenses, and
administrative expenses for the majority owned marine vessel were reported under
the consolidation  method of accounting under Owned Equipment  Operations during
the six months ended June 30, 1999.

Aircraft:  During the six months  ended June 30,  2000,  lease  revenues of $1.2
million were offset by depreciation expense, direct expenses, and administrative
expenses of $2.0 million. During the same period of 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.

Lease  revenues  decreased  $0.4  million  due to the sale of the  Partnership's
investment in a trust that owned a Boeing 767-200ER  commercial  aircraft during
the second  quarter 1999.  This decrease in lease revenues was partially off set
by an increase of $0.1 million in lease  revenues due to a Boeing  737-300 being
on-lease in 2000 that was off-lease during the same period of 1999.

The decrease in expenses of $0.6 million was primarily due to lower depreciation
expense.  The sale of the  Partnership's  interest in three  trusts  during 1999
caused  depreciation  expense to decrease  $0.4  million.  Depreciation  expense
decreased   an   additional   $0.7   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. The decreases were offset, in part, by the
Partnership's  investment  in an additional  trust during the second  quarter of
1999 which increased depreciation expense $0.3 million.

(E)  Net Income

As a result of the foregoing,  the  Partnership had a net income of $0.9 million
for the six months ended June 30, 2000, compared to a net income of $7.9 million
during the same period of 1999. 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 six  months  ended June 30,  2000 is not  necessarily  indicative  of future
periods. In the six months ended June 30, 2000, the Partnership distributed $4.8
million  to  the  limited  partners,  or  $0.90  per  weighted-average   limited
partnership unit.

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

For the six months ended June 30, 2000, the Partnership generated operating cash
of $5.7 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,  2000 of
approximately $5.0 million) to the partners.

During the six months ended June 30, 2000, the  Partnership  sold or disposed of
wholly-owned equipment and received aggregate proceeds of $2.6 million.

The  Partnership   purchased  marine   containers  for  $2.9  million  including
acquisition  fees of $0.1 million to PLM Financial  Services,  Inc., (FSI or the
General Partner), a wholly-owned subsidiary of PLM International, Inc., for this
equipment.

Accounts receivable  increased $0.2 million during the six months ended June 30,
2000 due to the timing of cash receipts.

Investments in USPEs  decreased $3.3 million due to cash  distributions  of $2.5
million  to the  Partnership  from the  USPEs and a $0.8  million  loss that was
recorded from operations  from its equity  interests in USPEs for the six months
ended June 30, 2000.

Accounts  payable  decreased  $1.0 million  during the six months ended June 30,
2000 due to the payment of $0.9 million accrual for marine  containers that were
purchased  in 1999 and  included  as a payable  at  December  31,  1999 and $0.3
million reduction of trade payables.

During the six months  ended June 30, 2000,  due to  affiliates  increased  $0.2
million resulting from the receipt an additional deposit of $0.1 million that is
due to an affiliated  USPE for engine reserves and an increase of $37,000 due to
PLM  Investment  Management  Inc.,  an  affiliate  of the General  Partner,  for
management fees.

During the six months  ended June 30,  2000,  lessee  deposits  and  reserve for
deposits  decreased $0.3 million.  Marine vessel dry docking reserves  decreased
$0.3 million due to the payment of dry docking  expenses of $0.4 million  offset
in part,  by an increase in the reserve for a marine  vessel dry docking of $0.1
million.

The  Partnership  is scheduled to make an annual debt payment of $3.0 million to
the lenders of the notes payable on December 29, 2000.

The  Partnership  has a warehouse  facility,  which is shared with PLM Equipment
Growth  Fund VI,  Professional  Lease  Management  Income  Fund I, LLC,  and TEC
Acquisub,  Inc., an indirect  wholly-owned  subsidiary  of the General  Partner.
Borrowings  under this  facility  by the other  eligible  borrowers  reduces the
amount  available to be borrowed by the  Partnership.  All borrowings under this
facility are guaranteed by the General Partner.  On June 30, 2000, this facility
was extended to September 30, 2000 and the amount available to be borrowed under
the facility was reduced from $24.5 million to $9.5 million. The General Partner
has been  notified by the lender that this facility will not be renewed upon its
expiration.  The General  Partner is currently  negotiating  with a lender for a
warehouse credit facility of $10.0-$15.0 million with similar terms. The General
Partner believes the facility will be in place by September 30, 2000.

As of  August  7,  2000,  the  PLM  Equipment  Growth  Fund  VI had  outstanding
borrowings of $0.6 million and TEC Acquisub, Inc. had borrowings of $8.9 million
under the short term Committed Bridge Facility.  No other eligible  borrower had
any outstanding borrowings under the short term Committed Bridge Facility.

(III)    OUTLOOK FOR THE FUTURE

Several factors may affect the Partnership's  operating  performance in 2000 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.

Factors  affecting the Partnership's  contribution  during the remainder of 2000
and beyond include:

1. Depressed economic  conditions in Asia during most of 1999 led to low freight
rates for dry bulk marine vessels.  As Asia began its economic recovery later in
1999  freight  rates  began to increase  and,  in the absence of new  additional
orders,  this market  would be expected  to  continue  to show  improvement  and
stabilize over the next one to two years.

2.  Railcar  loadings in North  America  have  continued  to be high,  however a
softening  in the market is  expected  which may lead to lower  utilization  and
lower  contribution  to the  Partnership  as existing  leases expire and renewal
leases are negotiated.

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  unpredictability  of some of these
factors,  or of their occurrence,  makes it difficult for the General Partner to
clearly  define  trends or  influences  that may impact the  performance  of the
Partnership's  equipment.  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.

The  Partnership  intends to use  excess  cash flow,  if any,  after  payment of
operating  expenses,  pay principal and interest on debt, 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.

Beginning in the  Partnership's  seventh year of operations,  which commences on
January 1, 2002,  the General  Partner  will stop  reinvesting  excess cash into
additional  equipment.  Surplus cash, if any, 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 eleventh year of operations. The Partnership will terminate on
December 31, 2013, unless  terminated  earlier upon sale of all equipment and by
certain other events.

(IV) FORWARD-LOOKING INFORMATION

Except for the historical  information contained herein, this Form 10-Q 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  should  be read as  being
applicable  to all related  forward-looking  statements  wherever they appear in
this Form 10-Q. 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, 2000, 76% 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.





<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: August 7, 2000       By:   /s/ Richard K Brock
                                 -------------------
                                 Richard K Brock
                                 Vice President and
                                 Chief Financial Officer