----

| **UNITED                STATES**                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **SECURITIES                AND EXCHANGE COMMISSION**                                                                                                                                                                                                                                                                                                                                                                                                                            |
| **Washington,                D.C. 20549**                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| **___________________**                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **FORM                10-QSB**                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **[X]                Quarterly Report Pursuant to Section 13 or 15(d) of the Securities                Exchange Act of 1934**                                                                                                                                                                                                                                                                                                                                                    |
| **For                the fiscal quarter ended March 31, 2006.**                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **[                ] 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.)                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **405                Lexington Avenue, 67th floor**                                                                                                                                                                                                                                                                                                                                                                                                                              |
| **New                York, NY         10174**                                                                                                                                                                                                                                                                                                                                                                                       |
| (Address                of principal executive offices) (Zip code)                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Registrant's                telephone number, including area code: (212) 682-3344                                                                                                                                                                                                                                                                                                                                                                                                |
| _______________________                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Securities                registered under Section 12(b) of the Exchange Act:                                                                                                                                                                                                                                                                                                                                                                                                    |
| Limited                Partnership Units                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (Title                of class)                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Check                whether the Registrant is not required to file reports pursuant to                Section                13 or 15(d) of the Exchange Act. [ ]                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Check                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 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 [ ]             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Check                if there is no disclosure of delinquent filers in response to Item                405 of                Regulation S-B contained in this form, and no disclosure will be                contained, to the best of the Registrant's knowledge, in definitive                proxy                or information statements incorporated by reference in Part III of                this                Form 10-QSB or any amendment to this Form 10-QSB. [ ] |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Indicate                by check mark whether the Registrant is a shell company (as defined                in                Rule 12b-2 of the Exchange Act). [ ]                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Registrant's                aggregate market value of voting stock: N/A                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Registrant's                Limited Partnership units outstanding as of March 31, 2006 were                4,981,450.                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Registrant's                revenues for the period ended March 31, 2006 was                $4,727,000.                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Transitional                Small Business Disclosure Format: Yes [ ] No [ X                ]                                                                                                                                                                                                                                                                                                                                                                                    |

----

**PART      I**

| **PLM                EQUIPMENT GROWTH & INCOME FUND VII**                |
|------------------------------------------------------------------------------|
| **(A                Limited Partnership)**                                   |
| **CONDENSED                BALANCE SHEETS**                                  |
| (in                thousands of dollars, except unit                amounts) |

|                                                                              |   |                     |    |                        |   |
|-----------------------------------------------------------------------------------|--------|--------------------------|---------|-----------------------------|--------|
|                                                                              |   | March                31, |    | December                31, |   |
| **Assets**                                                                        |   | 2006                     |    | 2005                        |   |
|                                                                              |   |                     |    |                        |   |
| Equipment                held for operating leases, at cost                       |   | $                        | 56,995  |                        | $      | 60,143 |   |
| Less                accumulated depreciation                                      |   |                     | (45,332 | )                           |   | (46,815 | ) |
| Net                equipment                                                      |   |                     | 11,663  |                        |   | 13,328 |   |
|                                                                              |   |                     |    |                        |   |   |   |
| Cash                and cash equivalents                                          |   |                     | 11,284  |                        |   | 6,779 |   |
| Accounts                and other receivables                                     |   |                     | 1,423   |                        |   | 1,760 |   |
| Equity                investments in affiliated entities                          |   |                     | 8,971   |                        |   | 9,668 |   |
| Other                assets, net of accumulated amortization of                   |   |                     |    |                        |   |   |   |
| $19                in 2005                                                        |   |                     | 167     |                        |   | 228 |   |
| Assets                held for sale                                               |   |                     | 22      |                        |   | 23 |   |
|                                                                              |   |                     |    |                        |   |   |   |
| Total                assets                                                       |   | $                        | 33,530  |                        | $      | 31,786 |   |
|                                                                              |   |                     |    |                        |   |   |   |
| **Liabilities                and partners’ capital**                        |   |                     |    |                        |   |   |   |
|                                                                              |   |                     |    |                        |   |   |   |
| Liabilities                                                                       |   |                     |    |                        |   |   |   |
|                                                                              |   |                     |    |                        |   |   |   |
| Accounts                payable and accrued expenses                              |   | $                        | 158     |                        | $      | 199 |   |
| Due                to affiliates                                                  |   |                     | 882     |                        |   | 866 |   |
| Reserve                for repairs                                                |   |                     | 1,039   |                        |   | 921 |   |
| Lessee                deposits and prepaid revenues                               |   |                     | 506     |                        |   | 540 |   |
| Liabilities                held for sale                                          |   |                     | 39      |                        |   | 62 |   |
| Total                liabilities                                                  |   |                     | 2,624   |                        |   | 2,588 |   |
|                                                                              |   |                     |    |                        |   |   |   |
| Commitments                and contingencies                                      |   |                     |    |                        |   |   |   |
|                                                                              |   |                     |    |                        |   |   |   |
| Partners'                capital                                                  |   |                     |    |                        |   |   |   |
|                                                                              |   |                     |    |                        |   |   |   |
| Limited                partners (4,981,450 limited partnership units outstanding) |   |                     | 30,906  |                        |   | 29,198 |   |
| General                Partner                                                    |   |                     | --      |                        |   | -- |   |
| Total                partners' capital                                            |   |                     | 30,906  |                        |   | 29,198 |   |
|                                                                              |   |                     |    |                        |   |   |   |
| Total                liabilities and partners' capital                            |   | $                        | 33,530  |                        | $      | 31,786 |   |

----

| **PLM                EQUIPMENT GROWTH & INCOME FUND VII**                                                                    |
|----------------------------------------------------------------------------------------------------------------------------------|
| **(A                Limited Partnership)**                                                                                       |
| **CONDENSED                STATEMENTS OF INCOME**                                                                                |
| (in                thousands of dollars, except weighted-average limited partnership                unit                amounts) |

|                                                             |   | For                the Three Months |   |
|------------------------------------------------------------------|--------|-------------------------------------|--------|
|                                                             |   | Ended                March 31,      |   |
|                                                             |   | 2006                                |   | 2005 |   |
| **Revenues**                                                     |   |                                |   |   |   |
| Lease                revenue                                     |   | $                                   | 4,226  |   | $ | 4,006 |   |
| Interest                and other income                         |   |                                | 68     |   |   | 29 |   |
| Gain                on disposition of equipment                  |   |                                | 433    |   |   | 34 |   |
| Total                revenues                                    |   |                                | 4,727  |   |   | 4,069 |   |
|                                                             |   |                                |   |   |   |   |   |
| **Expenses**                                                     |   |                                |   |   |   |   |   |
| Depreciation                and amortization                     |   |                                | 878    |   |   | 960 |   |
| Operations                support                                |   |                                | 1,494  |   |   | 943 |   |
| Management                fees to affiliate                      |   |                                | 171    |   |   | 158 |   |
| Interest                expense                                  |   |                                | 6      |   |   | 78 |   |
| General                and administrative expenses to affiliates |   |                                | --     |   |   | 31 |   |
| Other                general and administrative expenses         |   |                                | 245    |   |   | 140 |   |
| Total                expenses                                    |   |                                | 2,794  |   |   | 2,310 |   |
|                                                             |   |                                |   |   |   |   |   |
| Equity                in net loss of equity investments          |   |                                | (225   | ) |   | (560 | ) |
|                                                             |   |                                |   |   |   |   |   |
| Income                from continuing operations                 |   |                                | 1,708  |   |   | 1,199 |   |
|                                                             |   |                                |   |   |   |   |   |
| Discontinued                operations:                          |   |                                |   |   |   |   |   |
| Income                from operation of discontinued operations  |   |                                | --     |   |   | 204 |   |
|                                                             |   |                                |   |   |   |   |   |
| Net                income                                        |   | $                                   | 1,708  |   | $ | 1,403 |   |
|                                                             |   |                                |   |   |   |   |   |
| **Partners’                share of net income**           |   |                                |   |   |   |   |   |
|                                                             |   |                                |   |   |   |   |   |
| Limited                partners                                  |   | $                                   | 1,708  |   | $ | 1,403 |   |
| General                Partner                                   |   |                                | --     |   |   | -- |   |
|                                                             |   |                                |   |   |   |   |   |
| Total                                                            |   | $                                   | 1,708  |   | $ | 1,403 |   |
|                                                             |   |                                |   |   |   |   |   |
| Limited                partners' basic earnings per              |   |                                |   |   |   |   |   |
| weighted-average                limited partnership unit:        |   |                                |   |   |   |   |   |
| Income                from continuing operations                 |   | $                                   | 0.34   |   | $ | 0.24 |   |
| Income                from operation of discontinued operations  |   |                                | --     |   |   | 0.04 |   |
|                                                             |   | $                                   | 0.34   |   | $ | 0.28 |   |

----

| **PLM                EQUIPMENT GROWTH & INCOME FUND VII**                             |
|-------------------------------------------------------------------------------------------|
| **(A                Limited Partnership)**                                                |
| **CONDENSED                STATEMENTS OF CHANGES IN PARTNERS' CAPITAL**                   |
| **For                the Period from December 31, 2005 to March 31,                2006** |
| (in                thousands of dollars)                                                  |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |    | Limited  |   |   | General |   |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------|---------------|--------|--------|---------|--------|--------|--------|--------|
|                                                                         Partners |   | Partner |          |   | Total  |    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |    |          |   |   |    |   |   |   |   |
| Partners'                capital as of December 31, 2005                                                                                                                                                                                                                                                                                                                                                                                                 |   | $       | 29,198        |   | $      | --      |   | $      | 29,198 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |    |          |   |   |    |   |   |   |   |
| Net                income                                                                                                                                                                                                                                                                                                                                                                                                                                |   |    | 1,708         |   |   | --      |   |   | 1,708  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |    |          |   |   |    |   |   |   |   |
| Partners'                capital as of March 31, 2006                                                                                                                                                                                                                                                                                                                                                                                                    |   | $       | 30,906        |   | $      | --      |   | $      | 30,906 |   |

----

| **PLM                EQUIPMENT GROWTH & INCOME FUND VII** |
|---------------------------------------------------------------|
| **(A                Limited Partnership)**                    |
| **CONDENSED                STATEMENTS OF CASH FLOWS**         |
| (in                thousands of dollars)                      |
| (unaudited)                                                   |

|                                                                                      |   | For                  the Three Months |
|-------------------------------------------------------------------------------------------|--------|---------------------------------------|
| ,                                                                                         |   | Ended                March 31    |
|                                                                                      |   |                                  | 2006 |   |   | 2005 |   |
|                                                                                      |   |                                  |   |   |   |   |   |
| **Operating                activities**                                                   |   |                                  |   |   |   |   |   |
| Income                from continuing operations                                          |   | $                                     | 1,708 |   | $ | 1,199 |   |
| Adjustments                to reconcile income from continuing operations                 |   |                                  |   |   |   |   |   |
| to                net cash provided by (used in) operating activities:                    |   |                                  |   |   |   |   |   |
| Depreciation                                                                              |   |                                  | 864 |   |   | 959 |   |
| Amortization                                                                              |   |                                  | 14 |   |   | 1 |   |
| Amortization                of debt placement costs                                       |   |                                  | -- |   |   | 6 |   |
| Gain                on disposition of equipment                                           |   |                                  | (433 | ) |   | (34 | ) |
| Equity                in net loss from equity investments                                 |   |                                  | 225 |   |   | 560 |   |
| Distributions                from equity investments                                      |   |                                  | 472 |   |   | 405 |   |
| Changes                in operating assets and liabilities:                               |   |                                  |   |   |   |   |   |
| Accounts                and other receivables                                             |   |                                  | 337 |   |   | 46 |   |
| Other                assets                                                               |   |                                  | 47 |   |   | (90 | ) |
| Accounts                payable and accrued expenses                                      |   |                                  | (41 | ) |   | 18 |   |
| Due                to affiliates                                                          |   |                                  | 16 |   |   | (191 | ) |
| Reserve                for repairs                                                        |   |                                  | 118 |   |   | (566 | ) |
| Lessee                deposits and prepaid revenues                                       |   |                                  | (34 | ) |   | (21 | ) |
| Cash                provided by operating activities of continuing operations             |   |                                  | 3,293 |   |   | 2,292 |   |
| Cash                (used in) provided by operating activities of discontinued operations |   |                                  | (22 | ) |   | 46 |   |
| Net                cash provided by operating activities                                  |   |                                  | 3,271 |   |   | 2,338 |   |
|                                                                                      |   |                                  |   |   |   |   |   |
| **Investing                activities**                                                   |   |                                  |   |   |   |   |   |
| Increase                in restricted cash                                                |   |                                  | -- |   |   | (5 | ) |
| Collections                on finance lease receivable                                    |   |                                  | -- |   |   | 33 |   |
| Proceeds                from disposition of equipment                                     |   |                                  | 1,234 |   |   | 64 |   |
| Net                cash provided by investing activities                                  |   |                                  | 1,234 |   |   | 92 |   |
|                                                                                      |   |                                  |   |   |   |   |   |
| Net                increase in cash and cash equivalents                                  |   |                                  | 4,505 |   |   | 2,430 |   |
| Cash                and cash equivalents at beginning of period                           |   |                                  | 6,779 |   |   | 4,635 |   |
| Cash                and cash equivalents at end of period                                 |   | $                                     | 11,284 |   | $ | 7,065 |   |
|                                                                                      |   |                                  |   |   |   |   |   |
| **Supplemental                information**                                               |   |                                  |   |   |   |   |   |
| Interest                paid                                                              |   | $                                     | 6 |   | $ | -- |   |

----

**PLM      EQUIPMENT GROWTH & INCOME FUND VII**

**(A      Limited Partnership)**

**NOTES      TO CONDENSED FINANCIAL STATEMENTS**

**(unaudited)**

----

**PLM      EQUIPMENT GROWTH & INCOME FUND VII**

**NOTES      TO CONDENSED FINANCIAL STATEMENTS**

**(unaudited)**

| Revenues                                                         |   |   |   |
|------------------------------------------------------------------|--------|--------|--------|
| Lease                revenue                                     |   | $      | 43     |   |
| Interest                and other income                         |   |   | 7      |   |
| Total                revenues                                    |   |   | 50     |   |
|                                                             |   |   |   |   |
| Expenses                                                         |   |   |   |   |
| Depreciation                and amortization                     |   |   | 13     |   |
| Operations                support                                |   |   | 16     |   |
| Management                fees to affiliate                      |   |   | 3      |   |
| General                and administrative expenses to affiliates |   |   | 6      |   |
| General                and administrative expenses               |   |   | 4      |   |
| Recovery                of bad debts                             |   |   | (9     | ) |
| Total                expenses                                    |   |   | 33     |   |
|                                                             |   |   |   |   |
| Equity                in net income of equity investment         |   |   | 187    |   |
|                                                             |   |   |   |   |
| Income                from operation of discontinued operations  |   | $      | 204    |   |

|                                                 |   | March                31, |   | December                31, |   |
|------------------------------------------------------|--------|--------------------------|--------|-----------------------------|--------|
| **Assets**                                           |   | 2006                     |   | 2005                        |   |
| Accounts                receivable, net              |   | $                        | 22     |                        | $      | 23 |   |
| Total                assets held for sale            |   | $                        | 22     |                        | $      | 23 |   |
| **Liabilities**                                      |   |                     |   |                        |   |   |   |
| Account                payable and other liabilities |   | $                        | 39     |                        | $      | 62 |   |
| Total                liabilities held for sale       |   | $                        | 39     |                        | $      | 62 |   |

|                                              |   |   | Owned                Equipment  |   |   | Equity                Investments |   |
|---------------------------------------------------|--------|--------|--------------------------------------|--------|--------|-----------------------------------|--------|
|                                              |   |   | 2005                                 |   |   | 2005                              |   |
| Management                fees                    |   | $      | 3                                    |   | $      | 34                                |   |
| Data                processing and administrative |   |   |                                 |   |   |                              |   |
| expenses                                          |   |   | 6                                    |   |   | 35                                |   |

----

**PLM      EQUIPMENT GROWTH & INCOME FUND VII**

**(A      Limited Partnership)**

**NOTES      TO CONDENSED FINANCIAL STATEMENTS**

**(unaudited)**

|                                              |   | Owned                Equipment  | Equity                Investments |
|---------------------------------------------------|--------|--------------------------------------|-----------------------------------|
|                                              |   |                                 | 2006                              |   |   | 2005 |   |   | 2006 |   |   | 2005 |   |
| Management                fees                    |   | $                                    | 171                               |   | $ | 158 |   | $ | 30 |   | $ | 39 |   |
| Data                processing and administrative |   |                                 |                              |   |   |   |   |   |   |   |   |   |   |
| expenses                                          |   |                                 | --                                |   |   | 31 |   |   | -- |   |   | 9 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | March                31,  |   |   | December                31, |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------|--------|--------|-----------------------------|--------|
|                                                                                           2006 |   | 2005   |                           |
| Marine                containers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $      | 34,783                         |   | $      | 37,931                      |   |
| Marine                vessels                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 22,212                         |   |   | 22,212                      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 56,995                         |   |   | 60,143                      |   |
| Less                accumulated depreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | (45,332                        | )      |   | (46,815                     | )      |
| Net                equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $      | 11,663                         |   | $      | 13,328                      |   |

----

**PLM      EQUIPMENT GROWTH & INCOME FUND VII**

**(A      Limited Partnership)**

**NOTES      TO CONDENSED FINANCIAL STATEMENTS**

**(unaudited)**

|                                           |   |   | TWA                 |   |   | TWA    |   |   | Boeing  |   |
|-------------------------------------------|--------|--------|--------------------------|--------|--------|--------|--------|--------|---------|--------|
| For                the three months ended |   |   | S/N                49183 |   |   | MD-82  |   |   | 737-300 |   |
| March                31, 2006             |   |   | Trust1                   |   |   | Trust2 |   |   | Trust3  |   |

| Lease                revenues and interest and other income   |   | $      | 301    |   | $      | 301    |   | $      | 343    |   |
|---------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Less:                Depreciation and amortization expense    |   |   | --     |   |   | 314    |   |   | 299    |   |
| Operations                support                             |   |   | 4      |   |   | 3      |   |   | 10     |   |
| General                and administrative expenses            |   |   | 8      |   |   | 8      |   |   | 24     |   |
| Net                income (loss)                              |   | $      | 289    |   | $      | (24    | )      | $      | 10     |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |
| Partnership’s                share of net income (loss) |   | $      | 145    |   | $      | (15    | )      | $      | 2      |   |

| For                the three months ended |   |   | PLM                CAL I |   |   | PLM                CAL II |   |   |   |   |   |   |   |
|-------------------------------------------|--------|--------|--------------------------|--------|--------|---------------------------|--------|--------|--------|--------|--------|--------|--------|
| March                31, 2006 (continued) |   |   | LLC4                     |   |   | LLC5                      |   |   | CFHS6  |   |   | Total  |   |

| Lease                revenues and interest and other income |   | $      | 977    |   | $      | 968    |   | $      | 790    |   |   |   |   |
|-------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Less:                Depreciation and amortization expense  |   |   | 1,030  |   |   | 1,029  |   |   | 998    |   |   |   |   |
| Interest                expense                             |   |   | 456    |   |   | 455    |   |   | --     |   |   |   |   |
| General                and administrative expenses          |   |   | 23     |   |   | 23     |   |   | 27     |   |   |   |   |
| Net                loss                                     |   | $      | (532   | )      | $      | (539   | )      | $      | (235   | )      |   |   |   |
|                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Partnership’s                share of net loss        |   | $      | (136   | )      | $      | (138   | )      | $      | (83    | )      | $      | (225   | )      |

| 1  | The                Partnership owns a 50% interest in the TWA S/N 49183 Trust that was                formed                in 1998 that owns a MD-82 stage III commercial                aircraft. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3  | The                Partnership owns a 38% interest in the Boeing 737-300 Trust that                was                formed in 1999 that owns a Boeing 737-300 stage III commercial                aircraft. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4  | The                Partnership owns a 26% interest in the PLM CAL I LLC that was formed                in                2004 that owns two Boeing 737-500 stage III commercial                aircraft. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5  | The                Partnership owns a 26% interest in the PLM CAL II LLC that was formed                in                2004 that owns two Boeing 737-500 stage III commercial                aircraft. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6  | The                Partnership owns a 36% interest in CFHS that was formed in 2004 that                owns                various types of machinery and                equipment. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**PLM      EQUIPMENT GROWTH & INCOME FUND VII**

**(A      Limited Partnership)**

**NOTES      TO CONDENSED FINANCIAL STATEMENTS**

**(unaudited)**

|                                      |   |   | TWA                 |   |   | TWA    |   |   | Boeing  |   |   | PLM                           |   |
|-------------------------------------------|--------|--------|--------------------------|--------|--------|--------|--------|--------|---------|--------|--------|-------------------------------|--------|
| For                the three months ended |   |   | S/N                49183 |   |   | MD-82  |   |   | 737-300 |   |   | Worldwide                     |   |
| March                31, 2005             |   |   | Trust1                   |   |   | Trust2 |   |   | Trust3  |   |   | Leasing                Corp.4 |   |

| Lease                revenues and interest and other income   |   | $      | 308    |   | $      | 308    |   | $      | 390    |   | $      | 317    |   |
|---------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Less:                Depreciation and amortization expense    |   |   | --     |   |   | 314    |   |   | 320    |   |   | --     |   |
| Operations                support                             |   |   | --     |   |   | --     |   |   | 6      |   |   | --     |   |
| General                and administrative expenses            |   |   | 19     |   |   | 20     |   |   | 23     |   |   | 308    |   |
| Net                income (loss)                              |   | $      | 289    |   | $      | (26    | )      | $      | 41     |   | $      | 9      |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Partnership’s                share of net income (loss) |   | $      | 144    |   | $      | (16    | )      | $      | 14     |   | $      | 2      |   |

| For                the three months ended |   |   | PLM                CAL I |   |   | PLM                CAL II |   |   |   |   |   |   |   |
|-------------------------------------------|--------|--------|--------------------------|--------|--------|---------------------------|--------|--------|--------|--------|--------|--------|--------|
| March                31, 2005 (continued) |   |   | LLC5                     |   |   | LLC6                      |   |   | CFHS7  |   |   | Total  |   |

| Lease                revenues and interest and other income |   | $      | 967    |   | $      | 958    |   | $      | 571    |   |   |   |   |
|-------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Less:                Depreciation and amortization expense  |   |   | 1,235  |   |   | 1,234  |   |   | 1,380  |   |   |   |   |
| Interest                expense                             |   |   | 490    |   |   | 489    |   |   | --     |   |   |   |   |
| General                and administrative expenses          |   |   | 27     |   |   | 27     |   |   | 24     |   |   |   |   |
| Net                loss                                     |   | $      | (785   | )      | $      | (792   | )      | $      | (833   | )      |   |   |   |
|                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Partnership’s                share of net loss        |   | $      | (202   | )      | $      | (203   | )      | $      | (299   | )      | $      | (560   | )      |

| 1  | The                Partnership owns a 50% interest in the TWA S/N 49183 Trust that was                formed                in 1998 that owns a MD-82 stage III commercial                aircraft. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3  | The                Partnership owns a 38% interest in the Boeing 737-300 Trust that                was                formed in 1999 that owns a Boeing 737-300 stage III commercial                aircraft. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4  | The                Partnership owned a 25% interest in PLM Worldwide Leasing Corp. that                was                formed in 1995 and dissolved in 2005 that owned aircraft related                assets. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5  | The                Partnership owns a 26% interest in the PLM CAL I LLC that was formed                in                2004 that owns two Boeing 737-500 stage III commercial                aircraft. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 6  | The                Partnership owns a 26% interest in the PLM CAL II LLC that was formed                in                2004 that owns two Boeing 737-500 stage III commercial                aircraft. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7  | The                Partnership owns a 36% interest in CFHS that was formed in 2004 that                owns                various types of machinery and                equipment. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**PLM      EQUIPMENT GROWTH & INCOME FUND VII**

**(A      Limited Partnership)**

**NOTES      TO CONDENSED FINANCIAL STATEMENTS**

**(unaudited)**

|                                                    |   | Marine  |   |     |   | Machinery                |   | Marine    |   |   |   |   |   |
|---------------------------------------------------------|--------|---------|--------|----------|--------|--------------------------|--------|-----------|--------|--------|--------|--------|--------|
| For                the three months ended               |   | Vessel  |   | Aircraft |   | And                Other |   | Container |   |   |   |   |   |
| March                31, 2006                           |   | Leasing |   | Leasing  |   | Equipment                |   | Leasing   |   | Other1 |   | Total  |   |
|                                                    |   |    |   |     |   |                     |   |      |   |   |   |   |   |
| Revenues                                                |   |    |   |     |   |                     |   |      |   |   |   |   |   |
| Lease                revenue                            |   | $       | 2,936  |     | $      | 1                        |   | $         | --     |   | $      | 1,289  |   | $ | -- |   | $ | 4,226 |   |
| Interest                and other income                |   |    | --     |     |   | --                       |   |      | --     |   |   | --     |   |   | 68 |   |   | 68 |   |
| Gain                on disposition of equipment         |   |    | --     |     |   | --                       |   |      | --     |   |   | 433    |   |   | -- |   |   | 433 |   |
| Total                revenues                           |   |    | 2,936  |     |   | 1                        |   |      | --     |   |   | 1,722  |   |   | 68 |   |   | 4,727 |   |
|                                                    |   |    |   |     |   |                     |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                                                |   |    |   |     |   |                     |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                and amortization            |   |    | 310    |     |   | --                       |   |      | --     |   |   | 568    |   |   | -- |   |   | 878 |   |
| Operations                support                       |   |    | 1,493  |     |   | 1                        |   |      | --     |   |   | --     |   |   | -- |   |   | 1,494 |   |
| Management                fees to affiliate             |   |    | 110    |     |   | --                       |   |      | --     |   |   | 48     |   |   | 13 |   |   | 171 |   |
| Interest                expense                         |   |    | --     |     |   | --                       |   |      | --     |   |   | --     |   |   | 6 |   |   | 6 |   |
| General                and administrative expenses      |   |    | 36     |     |   | --                       |   |      | --     |   |   | --     |   |   | 209 |   |   | 245 |   |
| Total                expenses                           |   |    | 1,949  |     |   | 1                        |   |      | --     |   |   | 616    |   |   | 228 |   |   | 2,794 |   |
| Equity                in net loss of equity             |   |    |   |     |   |                     |   |      |   |   |   |   |   |   |   |   |   |   |   |
| investments                                             |   |    | --     |     |   | (142                     | )      |      | (83    | )      |   | --     |   |   | -- |   |   | (225 | ) |
| Income                (loss) from continuing operations |   | $       | 987    |     | $      | (142                     | )      | $         | (83    | )      | $      | 1,106  |   | $ | (160 | ) | $ | 1,708 |   |
|                                                    |   |    |   |     |   |                     |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Total                assets as of March 31, 2006        |   | $       | 591    |     | $      | 3,266                    |   | $         | 5,710  |   | $      | 12,539 |   | $ | 11,424 |   | $ | 33,530 |   |

|                                                    |   | Marine  |   |     |   | Machinery                |   | Marine    |   |   |   |   |   |
|---------------------------------------------------------|--------|---------|--------|----------|--------|--------------------------|--------|-----------|--------|--------|--------|--------|--------|
| For                the three months ended               |   | Vessel  |   | Aircraft |   | And                Other |   | Container |   |   |   |   |   |
| March                31, 2005                           |   | Leasing |   | Leasing  |   | Equipment                |   | Leasing   |   | Other1 |   | Total  |   |
|                                                    |   |    |   |     |   |                     |   |      |   |   |   |   |   |
| Revenues                                                |   |    |   |     |   |                     |   |      |   |   |   |   |   |
| Lease                revenue                            |   | $       | 2,364  |     | $      | 97                       |   | $         | --     |   | $      | 1,545  |   | $ | -- |   | $ | 4,006 |   |
| Interest                and other income                |   |    | --     |     |   | 3                        |   |      | --     |   |   | --     |   |   | 26 |   |   | 29 |   |
| Gain                on disposition of equipment         |   |    | --     |     |   | --                       |   |      | --     |   |   | 34     |   |   | -- |   |   | 34 |   |
| Total                revenues                           |   |    | 2,364  |     |   | 100                      |   |      | --     |   |   | 1,579  |   |   | 26 |   |   | 4,069 |   |
|                                                    |   |    |   |     |   |                     |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Expenses                                                |   |    |   |     |   |                     |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                and amortization            |   |    | 310    |     |   | --                       |   |      | --     |   |   | 650    |   |   | -- |   |   | 960 |   |
| Operations                support                       |   |    | 926    |     |   | 2                        |   |      | --     |   |   | 15     |   |   | -- |   |   | 943 |   |
| Management                fees to affiliate             |   |    | 89     |     |   | 5                        |   |      | --     |   |   | 58     |   |   | 6 |   |   | 158 |   |
| Interest                expense                         |   |    | --     |     |   | --                       |   |      | --     |   |   | --     |   |   | 78 |   |   | 78 |   |
| General                and administrative expenses      |   |    | 26     |     |   | 4                        |   |      | --     |   |   | --     |   |   | 141 |   |   | 171 |   |
| Total                expenses                           |   |    | 1,351  |     |   | 11                       |   |      | --     |   |   | 723    |   |   | 225 |   |   | 2,310 |   |
| Equity                in net loss of equity             |   |    |   |     |   |                     |   |      |   |   |   |   |   |   |   |   |   |   |   |
| investments                                             |   |    | --     |     |   | (261                     | )      |      | (299   | )      |   | --     |   |   | -- |   |   | (560 | ) |
| Income                (loss) from continuing operations |   | $       | 1,013  |     | $      | (172                     | )      | $         | (299   | )      | $      | 856    |   | $ | (199 | ) | $ | 1,199 |   |

| 1 | Includes                certain assets not identifiable to a specific segment such as cash,                certain other assets and assets held for sale. Also includes certain                interest income and interest income related to trailer leasing, management                fees related to trailer leasing and costs not identifiable to a particular                segment, such as interest expense, certain amortization general and                administrative expenses. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**PLM      EQUIPMENT GROWTH & INCOME FUND VII**

**(A      Limited Partnership)**

**NOTES      TO CONDENSED FINANCIAL STATEMENTS**

**(unaudited)**

|                                                                                       |   | 2006   |      | 2005   |   |
|--------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|
| Attributable                to limited partners:                                           |   |   |      |   |   |   |   |
| Basic                income from continuing operations                                     |   | $      | 1,708     |   | $      | 1,199 |   |
| Special                allocation of income                                                |   |   | --        |   |   | -- |   |
| Income                from continuing operations                                           |   |   |      |   |   |   |   |
| attributable                to limited partners                                            |   |   | 1,708     |   |   | 1,199 |   |
|                                                                                       |   |   |      |   |   |   |   |
| Income                from operation of discontinued operations                            |   |   | --        |   |   | 204 |   |
| Net                income                                                                  |   | $      | 1,708     |   | $      | 1,403 |   |
|                                                                                       |   |   |      |   |   |   |   |
| Weighted                average limited partnership units                                  |   |   |      |   |   |   |   |
| outstanding                                                                                |   |   | 4,981,450 |   |   | 4,981,450 |   |
| Basic                earnings per weighted average limitedpartnership                unit: |   |   |      |   |   |   |   |
| Income                from continuing operations                                           |   | $      | 0.34      |   | $      | 0.24 |   |
| Income                from operation of discontinued operations                            |   |   | --        |   |   | 0.04 |   |
| Net                income per weighted average limited                                     |   |   |           |   |   |   |   |
| partnership                unit                                                            |   | $      | 0.34      |   | $      | 0.28 |   |

|                                     |   | March                31, |   | December                31, |   |
|------------------------------------------|--------|--------------------------|--------|-----------------------------|--------|
|                                     |   |                     | 2006   |                        |   | 2005 |   |
| Trade                accounts receivable |   | $                        | 1,306  |                        | $      | 1,573 |   |
| Insurance                receivables     |   |                     | 117    |                        |   | 187 |   |
|                                     |   | $                        | 1,423  |                        | $      | 1,760 |   |

----

**PLM      EQUIPMENT GROWTH & INCOME FUND VII**

**(A      Limited Partnership)**

**NOTES      TO CONDENSED FINANCIAL STATEMENTS**

**(unaudited)**

|                                 |   |   | March                31,  |   |   | December                31, |   |
|---------------------------------|--------|--------|--------------------------------|--------|--------|-----------------------------|--------|
|                            |   |   | 2006                           |   |   | 2005                        |   |
| Prepaid                expenses |   | $      | 162                            |   | $      | 223                         |   |
| Other                assets     |   |   | 5                              |   |   | 5                           |   |
|                            |   | $      | 167                            |   | $      | 228                         |   |

----

**PLM      EQUIPMENT GROWTH & INCOME FUND VII**

**(A      Limited Partnership)**

**NOTES      TO CONDENSED FINANCIAL STATEMENTS**

**(unaudited)**

----

| ,                                |   | For                the Three Months                   Ended March 31  |
|----------------------------------|--------|-------------------------------------------------------------------------------------------|
|                             |   |                                                                                      | 2006 |   |   | 2005 |   |
| Marine                vessels    |   | $                                                                                         | 1,443 |   | $ | 1,438 |   |
| Marine                containers |   |                                                                                      | 1,289 |   |   | 1,530 |   |
| Aircraft                         |   |                                                                                      | -- |   |   | 95 |   |

|                                                         |   | For                the Three MonthsEnded                March 31,  |
|---------------------------------------------------------|--------|-------------------------------------------------------------------------|
|                                                    |   |                                                                    | 2006 |   |   | 2005 |   |
| Aircraft                                                |   | $                                                                       | (142 | ) | $ | (261 | ) |
| Machinery                and other equipment            |   |                                                                    | (83 | ) |   | (299 | ) |
| Equity                in net loss of equity investments |   | $                                                                       | (225 | ) | $ | (560 | ) |

----

**PART      II -- OTHER INFORMATION**

|   | 31.1 | Certificate                of President of the General Partner pursuant to Section 302 of Sarbanes                -                Oxley Act of 2002. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.2 | Certificate                of Chief Financial Officer of the General Partner pursuant to Section                302                of Sarbanes - Oxley Act of 2002. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.1 | Certificate                of President of the General Partner pursuant to Section 906 of Sarbanes                -                Oxley Act of 2002. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.2 | Certificate                of Chief Financial Officer of the General Partner pursuant to Section                906                of Sarbanes - Oxley Act of 2002. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----