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 For the fiscal quarter ended September 30, 2000


[ ]       Transition  Report  Pursuant to Section 13 or 15(d) of the  Securities
          Exchange Act of 1934 For the transition period from to


                         Commission file number 0-26594
                             _______________________




                     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 ____








                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A Limited Partnership)
                                 BALANCE SHEETS
                 (in thousands of dollars, except unit amounts)
<TABLE>
<CAPTION>



                                                                             September 30,        December 31,
                                                                                2000                1999
                                                                           -----------------------------------


<S>                                                                        <C>                  <C>
  ASSETS

  Equipment held for operating lease, at cost                              $       71,658       $       70,579
  Less accumulated depreciation                                                   (33,265)             (36,466)
                                                                           --------------------------------------
    Net equipment                                                                  38,393               34,113

  Cash and cash equivalents                                                         6,589                2,495
  Restricted cash                                                                      36                  111
  Accounts receivable, less allowance for doubtful accounts
      of $37 in 2000 and $382 in 1999                                               1,286                1,099
  Investments in unconsolidated special-purpose entities                           15,826               27,843
  Deferred charges, net of accumulated amortization
      of $176 in 2000 and $125 in 1999                                                296                  251
  Prepaid expenses and other assets                                                     2                   54
                                                                           --------------------------------------

        Total assets                                                       $       62,428       $       65,966
                                                                           ======================================

  LIABILITIES AND PARTNERS' CAPITAL

  Liabilities:
  Accounts payable and accrued expenses                                    $          677       $        1,267
  Due to affiliates                                                                 1,207                  560
  Lessee deposits and reserve for repairs                                           1,183                1,392
  Notes payable                                                                    20,000               20,000
                                                                           --------------------------------------
    Total liabilities                                                              23,067               23,219

  Partners' capital:
  Limited partners (5,323,569 limited partnership units as of
      September 30, 2000 and 5,323,819 as of December 31, 1999)                    39,361               42,747
  General Partner                                                                      --                   --
                                                                           --------------------------------------
    Total partners' capital                                                        39,361               42,747
                                                                           --------------------------------------

        Total liabilities and partners' capital                            $       62,428       $       65,966
                                                                           ======================================
</TABLE>



                 See accompanying notes to financial statements.



                     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 Nine Months
                                                       Ended September 30,                Ended September 30,
                                                       2000           1999               2000            1999
                                                    --------------------------------------------------------------
<S>                                                 <C>            <C>              <C>             <C>
Revenues

  Lease revenue                                     $   4,226      $   5,041        $   11,931      $   15,507
  Interest and other income                                55             35               154              95
  Net gain on disposition of equipment                  2,520            153             3,605             157
                                                    --------------------------------------------------------------
      Total revenues                                    6,801                           15,690          15,759
                                                    --------------------------------------------------------------

  Expenses

  Depreciation and amortization                         1,854          2,456             4,826           7,358
  Repairs and maintenance                                 661          1,068             1,807           2,307
  Equipment operating expense                             483            674             1,343           2,174
  Insurance expense                                       105             55               296             298
  Management fees to affiliate                            240            266               651             786
  Interest expense                                        367            427             1,094           1,263
  General and administrative expenses
        to affiliates                                     263            156               719             537
  Other general and administrative expenses               234            135               589             423
  Provision for bad debts                                  44            181               113             897
                                                    --------------------------------------------------------------
      Total expenses                                    4,251          5,418            11,438          16,043
                                                    --------------------------------------------------------------

  Minority interests                                       --             23                --             114

  Equity in net income (loss) of unconsolidated
        special-purpose entities                          776           (767)              (69)          7,133
                                                    --------------------------------------------------------------

  Net income (loss)                                 $   3,326      $    (933)       $    4,183      $    6,963

  Partners' share of net income (loss)

  Limited partners                                  $   3,200      $  (1,059)       $    3,805      $    6,585
  General Partner                                         126            126               378             378
                                                    --------------------------------------------------------------

  Total                                             $   3,326      $    (933)       $    4,183      $    6,963
                                                    ==============================================================

  Limited partners' net income (loss) per
      weighted-average limited partnership unit     $    0.60      $   (0.20)       $     0.71      $     1.24
                                                    ==============================================================

  Cash distributions                                $   2,523      $   2,522        $    7,566      $    7,571
                                                    ==============================================================

  Cash distributions per weighted-average
      limited partnership unit                      $    0.45      $    0.45        $     1.35      $     1.35
                                                    ==============================================================
</TABLE>



                 See accompanying notes to financial statements.



                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                            ( A Limited Partnership)
                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
           For the period from December 31, 1998 to September 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                                                    3,805                378                  4,183

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

  Cash distribution                                            (7,188)              (378)                (7,566)
                                                           -------------------------------------------------------

    Partners' capital as of September 30, 2000             $   39,361            $    --             $   39,361
                                                           =======================================================

</TABLE>


                 See accompanying notes to financial statements.





                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A Limited Partnership)
                            STATEMENTS OF CASH FLOWS
                            (in thousands of dollars)
<TABLE>
<CAPTION>

                                                                                       For the Nine Months
                                                                                       Ended September 30,
                                                                                        2000            1999
                                                                                    -----------------------------

<S>                                                                                  <C>             <C>
  OPERATING ACTIVITIES

 Net income                                                                          $    4,183      $   6,963
 Adjustments to reconcile net income
       to net cash provided by (used in) operating activities:
   Depreciation and amortization                                                          4,826          7,358
   Net gain on disposition of equipment                                                  (3,605)          (157)
   Equity in net (income) loss from unconsolidated special-purpose entities                  69         (7,133)
   Changes in operating assets and liabilities:
     Restricted cash                                                                         75           (200)
     Accounts receivable, net                                                              (164)           840
     Prepaid expenses and other assets                                                       52              5
     Accounts payable and accrued expenses                                                  337             88
     Due to affiliates                                                                      262            202
     Lessee deposits and reserve for repairs                                               (209)           283
     Minority interests                                                                      --           (443)
                                                                                     ----------------------------
       Net cash provided by operating activities                                          5,826          7,806
                                                                                     ----------------------------

 INVESTING ACTIVITIES

 Payments for purchase of equipment and capitalized improvements                        (10,823)        (8,211)
 Investment in and equipment purchased and placed in
     unconsolidated special-purpose entities                                                 --         (8,974)
 Distribution from unconsolidated special-purpose entities                                3,827          2,619
 Distribution from liquidation of unconsolidated special-purpose entities                 2,433         15,855
 Payments of acquisition fees to affiliate                                                 (125)          (342)
 Payments of lease negotiation fees to affiliate                                            (28)           (76)
 Proceeds from disposition of equipment                                                  10,554          5,248
                                                                                     --------------------------
       Net cash provided by investing activities                                          5,837          6,119
                                                                                     ---------------------------

 FINANCING ACTIVITIES

 Cash distribution paid to limited partners                                              (7,188)        (7,193)
 Cash distribution paid to General Partner                                                 (378)          (378)
 Purchase of limited partnership units                                                       (3)          (125)
                                                                                     ----------------------------
       Net cash used in financing activities                                             (7,569)        (7,696)
                                                                                     ----------------------------

 Net increase in cash and cash equivalents                                                4,094          6,229
 Cash and cash equivalents at beginning of period                                         2,495            404
                                                                                     ----------------------------

 Cash and cash equivalents at end of period                                          $    6,589      $   6,633
                                                                                     ============================

 SUPPLEMENTAL INFORMATION

 Interest paid                                                                       $      727      $     836
                                                                                     ============================
 Noncash transfer of equipment at net book value from
   unconsolidated special-purpose entities                                           $    5,688      $      --
                                                                                     ============================
</TABLE>


                 See accompanying notes to financial statements.



                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                               September 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 September 30, 2000 and December 31, 1999, the statements
of operations  for the three and nine months ended  September 30, 2000 and 1999,
the statements of changes in partners'  capital for the period from December 31,
1998 to September 30, 2000, and the statements of cash flows for the nine months
ended  September 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/A 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 nine months ended September 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 each of the
three months ended September 30, 2000 and 1999, cash distributions  totaled $2.5
million.  For each of the nine months ended  September  30, 2000 and 1999,  cash
distributions  totaled $7.6 million. Cash distributions of $3.2 million and $0.6
million to the limited  partners during the nine months ended September 30, 2000
and 1999, respectively, were deemed to be a return of capital.

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

5.   TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES

The balance due to affiliates as of September 30, 2000 included $0.2 million due
to FSI and its  affiliates  for  management  fees,  $0.4  million due to FSI for
acquisition  and lease  negotiation  fees,  and $0.7  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 September 30, 2000 and December 31, 1999.




                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                               September 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 Nine Months
                                                       Ended September 30,                Ended September 30,
                                                       2000           1999               2000           1999
                                                    --------------------------------------------------------------
<S>                                                 <C>            <C>                <C>              <C>
  Management fees                                   $      62      $      45          $    230         $   150
  Data processing and administrative
     expenses                                              15             14                56              52
</TABLE>

The  Partnership and USPEs accrued or paid FSI $0.5 million and $0.8 million for
equipment  acquisition and lease  negotiation  fees during the nine months ended
September 30, 2000 and 1999, respectively.

6.   EQUIPMENT

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

                                            September 30,         December 31,
                                               2000                1999
                                           ----------------------------------

  Marine containers                        $   30,605          $    12,498
  Marine vessels                               22,212               22,212
  Railcars                                      9,600                9,677
  Aircraft                                      5,483                9,297
  Trailers                                      3,758               16,895
                                           -----------         ------------
                                               71,658
  Less accumulated depreciation               (33,265)             (36,466)
                                           -----------         ------------
      Net equipment                        $   38,393          $    34,113
                                           ===========         ============

As of September 30, 2000, all owned equipment in the Partnership's portfolio was
on lease except for 18 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 September 30, 2000 and December 31, 1999, respectively.

During the nine months ended  September  30,  2000,  the  Partnership  purchased
marine  containers for $9.8 million and accrued or paid acquisition fees of $0.4
million to FSI. In addition,  the General Partner  transferred marine containers
with an original  equipment  cost of $7.9  million from the  Partnership's  USPE
portfolio to owned equipment.

During the nine months ended September 30, 2000, the  Partnership  disposed of a
commuter aircraft,  trailers, marine containers,  and railcars with an aggregate
net book value of $6.9 million for $10.5  million.  During the nine months ended
September 30, 1999, the Partnership  disposed of commercial  aircraft,  portable
heaters,  trailers,  modular buildings,  and railcars with an aggregate net book
value of $5.1 million for $5.2 million.




                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                               September 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>

                                                                                September 30,       December 31,
                                                                                      2000              1999
                                                                                ----------------------------------

<S>                                                                                 <C>               <C>
       38% interest in a trust owning a Boeing 737-300 Stage III commercial
                 aircraft                                                           $    6,834        $    7,974
       50% interest in a trust owning a MD-82 Stage III commercial aircraft              4,079             5,066
       80% interest in an entity owning a dry bulk-carrier marine vessel                 3,631             4,224
       50% interest in a trust owning a MD-82 Stage III commercial aircraft              1,126             1,808
       44% interest in an entity that owned a dry bulk-carrier marine vessel               152             1,917
       50% interest in a trust that owned four Boeing 737-200A Stage II
                 commercial aircraft                                                         2               122
       25% interest in a trust that owned four Boeing 737-200A Stage II
                 commercial aircraft                                                         2                79
       24% interest in a trust that owned a Boeing 767-200ER Stage III
                 commercial aircraft                                                        --                (3)
       75% interest in an entity that owned marine containers                               --             6,656
                                                                                ---------------       -----------
           Net investments                                                          $   15,826        $   27,843
                                                                                ===============       ===========
</TABLE>

As of September 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 nine months ended  September 30, 2000, all  jointly-owned  equipment was
accounted for under the equity method of  accounting.  For the nine months ended
September 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.

During the nine months ended  September 30, 2000,  the General  Partner sold the
Partnership's interest in an entity that owned a dry bulk-carrier marine vessel.
The  Partnership's  interest in this trust was sold for proceeds of $2.4 million
for its investment of $1.7 million.  The General  Partner also  transferred  the
Partnership's  interest  in an entity  that  owned  marine  containers  to owned
equipment.

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)



                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2000

8.   OPERATING SEGMENTS (CONTINUED)

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

                                            Marine                                    Marine
     For the quarter ended                  Vessel   Trailer    Aircraft  Railcar    Container
         September 30, 2000                Leasing   Leasing    Leasing   Leasing    Leasing    Other(1)    Total
     ----------------------------------    --------- ---------  --------- ---------  --------- ---------  -----------
     <S>                                        <C>       <C>        <C>       <C>        <C>       <C>        <C>
     REVENUES
       Lease revenue                       $  1,472  $    898   $    271  $    610   $    975  $     --   $  4,226
       Interest income and other                 --        --         --        --         --        55         55
       Gain (loss) on disposition of             --     2,521         --        (2 )        1        --      2,520
       equipment
                                           ------------------------------------------------------------------------
         Total revenues                       1,472     3,419        271       608        976        55      6,801

     COSTS AND EXPENSES
       Operations support                       807       323          2       105          2        10      1,249
       Depreciation and amortization            341       313        154       156        884         6      1,854
       Interest expense                          --        --         --        --         --       367        367
       Management fees to affiliate              74        52         13        52         49        --        240
       General and administrative expenses       19       230          3        14         --       231        497
       Provision for (recovery of) bad           --        57         --       (13)        --        --         44
     debts
                                           ------------------------------------------------------------------------
         Total costs and expenses             1,241       975        172       314        935       614      4,251
                                           ------------------------------------------------------------------------
     Equity in net income (loss) of USPEs       897        --       (141)       --         20        --        776
                                           ------------------------------------------------------------------------
     Net income (loss)                     $  1,128  $  2,444   $    (42) $    294   $     61  $   (559)  $  3,326
                                           ========================================================================

     Total assets as of September 30, 2000 $ 11,166  $  1,304   $ 12,644  $  4,388   $ 26,056  $  6,870   $ 62,428
                                           ========================================================================

                                            Marine                                    Marine
     For the quarter ended                  Vessel   Trailer    Aircraft  Railcar    Container
         September 30, 1999                Leasing   Leasing    Leasing   Leasing    Leasing    Other(2)    Total
     ----------------------------------    --------- ---------  --------- ---------  --------- ---------  -----------

     REVENUES
       Lease revenue                       $  2,095  $  1,052   $    271  $    663   $    845  $    115   $  5,041
       Interest income and other                 --        --         --        --         --        35         35
       Gain (loss) on disposition of             --        14         --        (1)        --       140        153
     equipment
                                           ------------------------------------------------------------------------
         Total revenues                       2,095     1,066        271       662        845       290

     COSTS AND EXPENSES
       Operations support                       932       234        486       135         --        10      1,797
       Depreciation and amortization            690       388        344       183        738       113      2,456
       Interest expense                          --        --         --        --         --       427        427
       Management fees to affiliate             104        52         17        46         43         4        266
       General and administrative expenses       20       105         13        14          9       130        291
       Provision for bad debts                   --        75         --        15         --        91        181
                                           ------------------------------------------------------------------------
         Total costs and expenses             1,746       854        860       393        790       775
                                           ------------------------------------------------------------------------
     Minority interests                          25        --         --        --         (2)       --         23
     Equity in net income (loss) of USPEs        (1)       --       (813)       --         --        47       (767)
                                           ------------------------------------------------------------------------
     Net income (loss)                     $    373  $    212   $ (1,402) $    269   $     53  $   (438)  $   (933)
                                           ========================================================================

     Total assets as of September 30, 1999 $ 15,347  $  8,465   $ 20,945  $  4,950   $ 13,088  $  8,337   $ 71,132
                                           ========================================================================
</TABLE>


(1)  Includes  interest  income  and  costs  not  identifiable  to a  particular
     segment,  such as,  interest  expense,  certain  amortization,  general and
     administrative, and operations support expenses.

(2)  Includes  interest  income  and  costs  not  identifiable  to a  particular
     segment,  such as  interest  expense,  certain  amortization,  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.



                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2000

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

                                             Marine                                    Marine
     For the nine months ended               Vessel    Trailer    Aircraft  Railcar    Container
         September 30, 2000                  Leasing   Leasing    Leasing   Leasing    Leasing    Other(1)    Total
     ------------------------------------    --------  ---------  --------  ---------  --------  ---------  ----------
     <S>                                     <C>       <C>        <C>       <C>        <C>       <C>        <C>
     REVENUES
       Lease revenue                         $ 4,155   $  2,694   $   814   $  1,861   $ 2,407   $     --   $ 11,931
       Interest income and other                  --         --        --         --        --        154        154
       Gain (loss) on disposition of              --      2,462     1,118         (3)       28         --      3,605
       equipment
                                             ------------------------------------------------------------------------
         Total revenues                        4,155      5,156     1,932      1,858     2,435        154     15,690

     COSTS AND EXPENSES
       Operations support                      2,183        813        28        386         6         30      3,446
       Depreciation and amortization           1,023        944       507        470     1,863         19      4,826
       Interest expense                           --         --        --         --        --      1,094      1,094
       Management fees to affiliate              208        149        41        133       120         --        651
       General and administrative expenses        51        604         9         60        --        584      1,308
       Provision for (recovery of) bad debts      --        128        --        (15)       --         --        113
                                             ------------------------------------------------------------------------
         Total costs and expenses              3,465      2,638       585      1,034     1,989      1,727     11,438
                                             ------------------------------------------------------------------------
     Equity in net income (loss) of USPEs        756         --      (953)        --       129         (1)       (69)
                                             ------------------------------------------------------------------------
     Net income (loss)                       $ 1,446   $  2,518   $   394   $    824   $   575   $ (1,574) $  4,183
                                             ========================================================================

     Total assets as of September 30, 2000   $11,166   $  1,304   $12,644   $  4,388   $26,056   $  6,870   $ 62,428
                                             ========================================================================



                                             Marine                                    Marine
     For the nine months ended               Vessel    Trailer    Aircraft  Railcar    Container
         September 30, 1999                  Leasing   Leasing    Leasing   Leasing    Leasing    Other(2)    Total
     ------------------------------------    --------  ---------  --------  ---------  --------  ---------  ----------


       Lease revenue                         $ 6,324   $  3,084   $ 1,246   $  2,003   $ 2,111   $    739   $ 15,507
       Interest income and other                  --         --        --         --         1         94         95
       Gain (loss) on disposition of              --         22         2        (31)       --        164        157
     equipment
                                             ------------------------------------------------------------------------
         Total revenues                        6,324      3,106     1,248      1,972     2,112        997     15,759

     COSTS AND EXPENSES
       Operations support                      3,137        686       496        428        --         32      4,779
       Depreciation and amortization           2,072      1,178     1,034        554     2,066        454      7,358
       Interest expense                           --         --        --         --        --      1,263      1,263
       Management fees to affiliate              316        160        62        141       106          1        786
       General and administrative expenses        70        358        34         41        19        438        960
       Provision for bad debts                    --        170        --          6        --        721        897
                                             ------------------------------------------------------------------------
         Total costs and expenses              5,595      2,552     1,626      1,170     2,191      2,909     16,043
                                             ------------------------------------------------------------------------
     Minority interests                          116         --        --         --        (2)        --        114
     Equity in net income (loss) of USPEs        (22)        --     7,011         --        --        144      7,133
                                             ------------------------------------------------------------------------
                                             ------------------------------------------------------------------------
     Net income (loss)                       $   823   $    554   $ 6,633   $    802   $   (81)  $ (1,768)  $  6,963
                                             ========================================================================

     Total assets as of September 30, 1999   $15,347   $  8,465   $20,945   $  4,950   $13,088   $  8,337   $ 71,132
                                             ========================================================================
</TABLE>


(1)  Includes  interest  income  and  costs  not  identifiable  to a  particular
     segment,  such as,  interest  expense,  certain  amortization,  general and
     administrative,  and operations  support  expenses.  Also includes expenses
     from an investment in an entity that owned a mobile offshore drilling unit.

(2)  Includes  interest  income  and  costs  not  identifiable  to a  particular
     segment,  such as  interest  expense,  certain  amortization,  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.


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2000

9.   DEBT

The Partnership's warehouse facility, which was 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,  expired on
September  30, 2000.  The General  Partner is currently  negotiating  with a new
lender for a $15.0 million  warehouse  credit facility with similar terms as the
facility  that  expired.  The General  Partner  believes  the  facility  will be
completed during the fourth quarter of 2000.

10.  NET INCOME (LOSS) PER WEIGHTED-AVERAGE PARTNERSHIP UNIT

Net income (loss) per weighted-average Partnership unit was computed by dividing
net income  (loss)  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  nine  months  ended   September  30,  2000  was  5,323,569  and  5,323,624,
respectively.   The   weighted-average   number  of  Partnership   units  deemed
outstanding  during  the three and nine  months  ended  September  30,  1999 was
5,324,262 and 5,326,951, respectively.

11.  CONTINGENCIES

PLM International (the Company) and various of its wholly owned subsidiaries are
defendants in a class action  lawsuit filed in January 1997 and which is pending
in the United  States  District  Court for the  Southern  District  of  Alabama,
Southern  Division  (Civil  Action  No.  97-0177-BH-C)  (the  court).  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.

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 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

                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 2000

11.  CONTINGENCIES (CONTINUED)

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 August 30, 2000. 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  fund'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 Fund's limited  partnership
agreement  if less than 50% of the limited  partners  of each Fund vote  against
such  amendments.   The  equitable  settlement  also  provides  for  payment  of
additional  attorneys' fees to the plaintiffs' attorneys from the Funds 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 August 30, 2000 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
August 2000, and information regarding each of the settlements was sent to class
members in September  2000. The monetary  settlement  remains subject to certain
conditions,  including  final  approval by the court  following a final fairness
hearing.  The  equitable  settlement  remains  subject  to  certain  conditions,
including  disapproval  of  the  proposed  amendments  to the  fund  partnership
agreements  by less than 50% of the limited  partners in one or more of Funds V,
VI, and VII, judicial approval of the proposed  amendments and final approval of
the equitable  settlement by the court  following a final  fairness  hearing.  A
final  fairness  hearing has been  scheduled for November 29, 2000.  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 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)



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
nine months ended  September 30, 1999 and were included with the owned equipment
operations.  For the three and nine and months ended  September 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
SEPTEMBER 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 September 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 September 30,
                                                       2000             1999
                                                    ----------------------------

  Marine containers                                 $    973          $   845
  Marine vessels                                         665            1,163
  Trailers                                               575              818
  Railcars                                               505              528
  Aircraft                                               269             (215)
  Portable heaters                                        --              122
  Modular buildings                                       --               (7)

Marine containers: Lease revenues and direct expenses for marine containers were
$1.0 million and $2,000  respectively,  for the three months ended September 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  September  30, 2000,
lease revenues  decreased $0.5 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.  In addition,  lease  revenues also
increased  $0.2 million during the third quarter 2000 due to the transfer of the
Partnership's  investment in an entity that owned marine  containers from a USPE
to owned equipment.

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $1.5
million and $0.8 million, respectively, for the three months ended September 30,
2000, compared to $2.1 million and $0.9 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
September 30, 2000,  lease revenues  decreased $0.6 million and direct  expenses
decreased $0.4 million when compared to the same period of 1999.

Marine vessel direct  expenses  increased  $0.3 million  during the three months
ended  September  30, 2000 due to increases in repairs and  maintenance  of $0.1
million,  equipment operating expenses of $0.1 million, and insurance expense of
$0.1 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 September 30, 2000, compared
to $1.1 million and $0.2 million, respectively,  during the same period of 1999.
A  decrease  in  trailer  lease  revenues  of  $0.2  million  was  due to  lower
utilization.

Railcars:  Railcar lease revenues and direct expenses were $0.6 million and $0.1
million,  respectively,  for the three months ended September 30, 2000, compared
to $0.7 million and $0.1 million, respectively,  during the same period of 1999.
A decrease  in railcar  lease  revenues of $27,000 was due to an increase in the
number of off-lease  railcars  during the three months ended  September 30, 2000
when  compared  to the same  period of 1999 and a decrease of $21,000 was due to
lower  re-lease  rates earned on existing  railcars  whose leases expired during
2000.

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $0.3 million and
$2,000, respectively, for the three months ended September 30, 2000, compared to
$0.3  million and $0.5  million,  respectively,  during the same period of 1999.
During the three months ended September 30, 1999, an off-lease commuter aircraft
required  repairs of $0.5 million which were not required during the same period
of 2000.

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

(B)  Indirect Expenses Related to Owned Equipment Operations

Total indirect expenses of $3.0 million for the three months ended September 30,
2000  decreased  from $3.6  million  for the same  period  in 1999.  Significant
variances are explained as follows:

     (i) A $0.6 million decrease in depreciation and amortization  expenses from
1999 levels reflects the decrease of $0.4 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 $0.1  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 $0.4 million
in  depreciation  and  amortization  expenses  resulting  from the  purchase  of
additional  equipment  during  2000  and 1999 and an  increase  of $0.2  million
resulting  from the  transfer  of the  Partnership's  interest in an entity that
owned marine containers from a USPE to owned equipment during 2000.

     (ii) A $0.1 million  decrease in the  provision  for bad debts based on the
General Partner's  evaluation of the collectability of receivables 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.

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

     (iv) A $0.2 million increase in general and administrative expenses was due
to $0.1 million  increase in costs  associated  with the  transition of trailers
into and the  operations of three new PLM short-term  trailer rental  facilities
and an increase of $49,000 in the costs  associated with  professional  services
during the three  months  ended  September  30,  2000 when  compared to the same
period of 1999.

(C)  Net Gain on Disposition of Owned Equipment

The net gain on  disposition  of equipment for the third quarter of 2000 totaled
$2.5  million,  and  resulted  from the sale of trailers,  railcars,  and marine
containers with an aggregate net book value of $5.5 million for proceeds of $8.0
million.  The net gain on disposition of equipment for the third quarter of 1999
totaled $0.2 million, and resulted from the sale of trailers,  railcars, and all
of the portable  heaters  with an  aggregate  net book value of $3.4 million for
proceeds of $3.6 million.

(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 September 30,
                                                      2000              1999
                                                    ----------------------------

  Marine vessels                                    $    897         $     (1)
  Marine containers                                       20               --
  Mobile offshore drilling unit                           --               47
  Aircraft                                              (141)            (813)
                                                    ----------       -----------
    Equity in net income (loss) of USPEs            $    776         $   (767)
                                                    ==========       ===========

Marine vessels: During the three months ended September 30, 2000, lease revenues
of $0.6 million and the gain from the sale of the  Partnership's  interest in an
entity that owned a marine  vessel of $0.9 million  were offset by  depreciation
expense,  direct expenses, and administrative  expenses of $0.6 million.  During
the same  period  of  1999,  lease  revenues  of $0.3  million  were  offset  by
depreciation  expense,  direct  expenses,  and  administrative  expenses of $0.3
million.

An increase in marine  vessel lease  revenues of $0.5  million and  depreciation
expense, direct expenses, and administrative expenses of $0.5 million during the
three months ended  September  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 September 30, 1999.

The increase in marine vessel lease revenues and  depreciation  expense,  direct
expenses, and administrative  expenses caused by the Amendment,  were off set in
part by lower lease  revenues of $0.2  million and lower  depreciation  expense,
direct expenses, and administrative  expenses of $0.1 million due to the sale of
a marine vessel during the third quarter of 2000.

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 September 30, 2000 when compared
to the same period of 1999.  During the three months ended  September  30, 2000,
lease  revenues of $0.1  million  were offset by  depreciation  expense,  direct
expenses,  and administrative  expenses of $0.1 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  September 30, 1999,  lease revenues of $0.1 million were
offset by depreciation expense,  direct expenses, and administrative expenses of
$0.1 million.

Aircraft:  During the three months ended  September 30, 2000,  lease revenues of
$0.8  million  were  offset  by  depreciation  expense,   direct  expenses,  and
administrative  expenses of $0.9 million.  During the same period of 1999, lease
revenues of $0.5 million were offset by depreciation  expense,  direct expenses,
and  administrative  expenses of $1.3 million.  Lease  revenues  increased  $0.3
million due to a Boeing 737-300 being on-lease in the third quarter of 2000 that
was off-lease  during the same period of 1999.  The decrease in expenses of $0.4
million was  primarily  due to lower  depreciation  expense as the result of the
double  declining-balance  method  of  depreciation  which  results  in  greater
depreciation in the first years an asset is owned.

(E)  Net Income (Loss)

As a result of the foregoing,  the  Partnership had a net income of $3.3 million
for the three months ended  September  30, 2000,  compared to a net loss of $0.9
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 third quarter of 2000 is not necessarily indicative of future
periods. In the third quarter of 2000, 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 NINE MONTHS  ENDED
SEPTEMBER 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 nine months ended September 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 Nine Months
                                                        Ended September 30,
                                                       2000             1999
                                                    ----------------------------

  Marine containers                                 $  2,401          $ 2,111
  Marine vessels                                       1,972            3,187
  Trailers                                             1,881            2,398
  Railcars                                             1,475            1,575
  Aircraft                                               786              750
  Portable heaters                                        --              736
  Modular buildings                                       --                3

Marine containers: Lease revenues and direct expenses for marine containers were
$2.4 million and $6,000,  respectively,  for the nine months ended September 30,
2000, compared to $2.1 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 nine months  ended  September  30, 2000,
lease revenues  decreased $1.3 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 $1.4 million caused by the purchase of
additional equipment during 1999 and 2000 and an increase of $0.2 million caused
by the  transfer of the  Partnership's  interest in an entity that owned  marine
containers from a USPE to owned equipment during 2000.

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $4.2
million and $2.2 million,  respectively, for the nine months ended September 30,
2000, compared to $6.3 million and $3.1 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 nine months ended
September 30, 2000,  lease revenues  decreased $1.8 million and direct  expenses
decreased $1.4 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. Marine vessel direct expenses also increased $0.4 million during
the nine  months  ended  September  30,  2000 due to  increases  in repairs  and
maintenance of $0.2 million,  equipment operating expenses of $0.1 million,  and
insurance expense of $0.1 million.

Trailers:  Trailer lease revenues and direct expenses were $2.7 million and $0.8
million, respectively, for the nine months ended September 30, 2000, compared to
$3.1 million and $0.7 million, respectively, during the same period of 1999. The
decrease in trailer lease revenues was due to lower utilization. The increase in
direct  expenses  was due to higher  repair  costs  during the nine months ended
September 30, 2000, when compared to the same period of 1999.

Railcars:  Railcar lease revenues and direct expenses were $1.9 million and $0.4
million, respectively, for the nine months ended September 30, 2000, compared to
$2.0 million and $0.4 million, respectively, during the same period of 1999. The
decrease in railcar  lease  revenues of $0.1 million was  primarily due to lower
re-lease rates earned on existing railcars whose leases expired during 2000.

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $0.8 million and
$28,000, respectively, for the nine months ended September 30, 2000, compared to
$1.2 million and $0.5 million, 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 and a commuter aircraft during 2000. During the
nine months ended September 30, 1999, an off-lease  commuter  aircraft  required
repairs of $0.5 million which were not required during the same period of 2000.

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

(B)  Indirect Expenses Related to Owned Equipment Operations

Total  indirect  expenses were $8.0 million for the nine months ended  September
30, 2000 decreased  from $11.3 million for the same period in 1999.  Significant
variances are explained as follows:

     (i) A $2.5 million decrease in depreciation and amortization  expenses from
1999 levels reflects the decrease of $0.7 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 $0.8  million due to the sale of
equipment  during 2000 and 1999,  and a decrease of $2.1  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 $0.8 million
in  depreciation  and  amortization  expenses  resulting  from the  purchase  of
additional  equipment  during  2000  and 1999 and an  increase  of $0.2  million
resulting  from the  transfer  of the  Partnerships  interest in an entity that
owned marine containers from a USPE to owned equipment during 2000.

     (ii) A $0.8 million  decrease in the  provision  for bad debts based on the
General Partner's evaluation of the collectability of receivables.  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.

     (iii)A $0.2  million  decrease  in  interest  expense  was due to a lower
average  outstanding  debt balance in the third quarter of 2000 when compared to
the same period of 1999.

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

     (v)  A $0.3 million  increase in  administrative expenses was due to higher
costs associated with the transition of Partnership
trailers and operations of 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 nine months ended September 30,
2000 totaled $3.6 million,  and resulted  from the sale of a commuter  aircraft,
railcars,  marine  containers,  and trailers with an aggregate net book value of
$6.9  million for  proceeds of $10.5  million.  The net gain on  disposition  of
equipment for the nine months ended September 30, 1999 totaled $0.2 million, and
resulted  from the sale of  commercial  aircraft,  portable  heaters,  trailers,
modular buildings, and railcars with an aggregate net book value of $5.1 million
for proceeds of $5.2 million.

(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 Nine Months
                                                       Ended September 30,
                                                     2000              1999
                                                   ----------------------------

  Marine vessels                                   $    756         $    (22 )
  Marine containers                                     129               --
  Mobile offshore drilling unit                          (1 )            144
  Aircraft                                             (953 )          7,011
                                                   ----------       -----------
    Equity in net income (loss) of USPEs           $    (69 )       $  7,133
                                                   ==========       ===========

Marine vessels:  During the nine months ended September 30, 2000, lease revenues
of $2.2 million and the gain from the sale of the  Partnership's  interest in an
entity that owned a marine  vessel of $0.9 million  were offset by  depreciation
expense,  direct expenses, and administrative  expenses of $2.4 million.  During
the same  period  of  1999,  lease  revenues  of $0.6  million  were  offset  by
depreciation  expense,  direct  expenses,  and  administrative  expenses of $0.7
million.

The increase in marine  vessel lease  revenues of $1.7 million and  depreciation
expense, direct expenses, and administrative expenses of $1.7 million during the
nine months ended  September  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 nine months ended September 30, 1999.

The increase in marine vessel lease revenues and  depreciation  expense,  direct
expenses, and administrative  expenses caused by the Amendment,  were off set in
part by lower lease  revenues of $0.2  million and lower  depreciation  expense,
direct  expenses,  and  administrative  expenses of $27,000 due to the sale of a
marine vessel during the third quarter of 2000.

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 nine months ended September 30, 2000 when compared
to the same period of 1999.  During the nine months  ended  September  30, 2000,
lease  revenues of $0.8  million  were offset by  depreciation  expense,  direct
expenses,  and administrative  expenses of $0.7 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 nine months ended  September 30, 1999,  lease  revenues of $0.4 million were
offset by depreciation expense,  direct expenses, and administrative expenses of
$0.2 million.

Aircraft:  During the nine months ended  September 30, 2000,  lease  revenues of
$2.0  million  were  offset  by  depreciation  expense,   direct  expenses,  and
administrative  expenses of $2.9 million.  During the same period of 1999, lease
revenues  of $2.0  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 $3.9 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 $0.4 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 $1.0 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   $1.1   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 $0.5 million.

(E)  Net Income

As a result of the foregoing,  the  Partnership had a net income of $4.2 million
for the nine months ended  September 30, 2000,  compared to a net income of $7.0
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 nine months  ended  September  30,  2000 is not  necessarily
indicative of future  periods.  In the nine months ended September 30, 2000, the
Partnership  distributed  $7.2  million to the  limited  partners,  or $1.35 per
weighted-average limited partnership unit.

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

For the  nine  months  ended  September  30,  2000,  the  Partnership  generated
operating cash of $9.7 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 nine  months  ended
September 30, 2000 of approximately $7.6 million) to the partners.

During the nine  months  ended  September  30,  2000,  the  Partnership  sold or
disposed of  wholly-owned  equipment  and received  aggregate  proceeds of $10.5
million.

The  Partnership   purchased  marine  containers  for  $10.2  million  including
acquisition fees of $0.4 million to the General Partner for this equipment.

During the nine months ended September 30, 2000, the General Partner transferred
the  Partnership's  investment in an entity that owned marine  containers to the
Partnership's  owned  equipment.  The  original  equipment  cost  of the  marine
containers transferred to owned equipment was $7.9 million.

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

Investments in USPEs  decreased  $12.0 million due to sale of the  Partnership's
interest in an entity that owned a marine vessel with an  investment  book value
of $1.7 million for proceeds of $2.4 million,  the transfer of the Partnership's
interest in an entity that owned marine containers with a net book value of $5.7
million  to  owned  equipment,   cash  distributions  of  $3.6  million  to  the
Partnership  from the USPEs,  and a $0.1  million  loss that was  recorded  from
operations  from its  equity  interests  in  USPEs  for the  nine  months  ended
September 30, 2000.

Accounts  payable  decreased $0.7 million during the nine months ended September
30, 2000 due to the  payment of $0.9  million  for marine  containers  that were
purchased  in 1999 and  included  as a payable  at  December  31,  1999 and $0.3
million increase of trade payables.

During the nine months ended  September 30, 2000,  due to  affiliates  increased
$0.6 million  resulting  from the receipt an additional  deposit of $0.2 million
that is due to an  affiliated  USPE for engine  reserves,  an  increase  of $0.4
million due to FSI for acquisition and lease  negotiation  fees, and an increase
of $50,000 due to PLM  Investment  Management  Inc., an affiliate of the General
Partner, for management fees.

During the nine months ended September 30, 2000, lessee deposits and reserve for
deposits  decreased $0.2 million.  Marine vessel dry docking reserves  decreased
$0.2 million due to the payment of dry docking  expenses of $0.5 million  offset
in part,  by an increase in the reserve for a marine  vessel dry docking of $0.3
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's warehouse facility, which was 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,  expired on
September  30,  2000.  Borrowings  under  this  facility  by the other  eligible
borrowers  reduced the amount available to be borrowed by the  Partnership.  All
borrowings  under this facility  were  guaranteed  by the General  Partner.  The
General Partner is currently  negotiating  with a new lender for a $15.0 million
warehouse  credit facility with similar terms as the facility that expired.  The
General  Partner  believes  the  facility  will be  completed  during the fourth
quarter of 2000.

(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 nine months ended September 30, 2000, 74% 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.






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                          PART II -- OTHER INFORMATION


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

           (a)    Exhibits

                  None.

           (b)    Reports on Form 8-K

                  None.





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:  November 10, 2000                By:      /s/ Richard K Brock
                                                 Richard K Brock
                                                 Vice President and
                                                 Chief Financial Officer