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




[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
       EXCHANGE ACT OF 1934
       FOR THE FISCAL QUARTER ENDED MARCH 31, 1999


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


                         COMMISSION FILE NUMBER 33-55796
                             -----------------------




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


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

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


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


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








<PAGE>



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


<TABLE>
<CAPTION>

                                                                               March 31,          December 31,
                                                                                1999                1998
                                                                           -----------------------------------
  ASSETS

  <S>                                                                      <C>                  <C>
  Equipment held for operating lease, at cost                              $      104,438       $       97,404
  Less accumulated depreciation                                                   (48,601)             (46,578)
                                                                           --------------------------------------
    Net equipment                                                                  55,837               50,826

  Cash and cash equivalents                                                           830                  404
  Restricted cash                                                                     269                  219
  Accounts receivable, less allowance for doubtful accounts
      of $286 in 1999 and $251 in 1998                                              2,297                1,893
  Investments in unconsolidated special-purpose entities                           17,632               22,817
  Deferred charges, net of accumulated amortization
      of $264 in 1999 and $231 in 1998                                                333                  293
  Prepaid expenses and other assets                                                   146                   85
                                                                           --------------------------------------

        Total assets                                                       $       77,344       $       76,537
                                                                           ======================================

  LIABILITIES AND PARTNERS' CAPITAL

  Liabilities:
  Accounts payable and accrued expenses                                    $          896       $          657
  Due to affiliates                                                                 1,572                1,318
  Lessee deposits and reserve for repairs                                           1,400                1,530
  Notes payable                                                                    23,000               23,000
                                                                           --------------------------------------
    Total liabilities                                                              26,868               26,505

  Minority interests                                                                3,660                3,785

  Partners' capital:
  Limited partners (5,326,819 limited partnership units as of
      March 31, 1999 and 5,334,211 as of December 31, 1998)                        46,816               46,247
  General Partner                                                                      --                   --
                                                                           --------------------------------------
    Total partners' capital                                                        46,816               46,247
                                                                           --------------------------------------

        Total liabilities and partners' capital                            $       77,344       $       76,537
                                                                           ======================================




</TABLE>










                 See accompanying notes to financial statements.


<PAGE>



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


                                                                                    For the Three Months
                                                                                       Ended March 31,
                                                                                    1999            1998
                                                                                ------------------------------
  REVENUES

  <S>                                                                           <C>               <C>
  Lease revenue                                                                 $    5,259        $   3,986
  Interest and other income                                                             40               53
  Net gain (loss) on disposition of equipment                                          (14)              33
                                                                                -----------------------------
    Total revenues                                                                   5,285            4,072
                                                                                ------------------------------
  Expenses

  Depreciation and amortization                                                      2,293            2,277
  Repairs and maintenance                                                              631              538
  Equipment operating expenses                                                         746              317
  Insurance expenses                                                                   135               62
  Management fees to affiliate                                                         282              221
  Interest expense                                                                     413              410
  General and administrative expenses to affiliates                                    190              180
  Other general and administrative expenses                                            138              131
  Provision for bad debts                                                               35               19
                                                                                -----------------------------
    Total expenses                                                                   4,863            4,155
                                                                                -----------------------------
  Minority interests                                                                    37               13

  Equity in net income of unconsolidated special-purpose entities                    2,726            5,712
                                                                                -----------------------------
  Net income                                                                    $    3,185            5,642
                                                                                ==============================

  Partners' share of net income

  Limited partners                                                              $    3,059        $   5,515
  General Partner                                                                      126              127
                                                                                ------------------------------

  Total                                                                         $    3,185        $   5,642
                                                                                ==============================

  Net income per weighted-average limited partnership unit                      $     0.57        $    1.03
                                                                                ==============================
  Cash distribution                                                             $    2,526        $   2,542
                                                                                ==============================

  Cash distribution per weighted-average
      limited partnership unit                                                  $     0.45        $    0.45
                                                                                ==============================




</TABLE>





                 See accompanying notes to financial statements.


<PAGE>



                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                            ( A LIMITED PARTNERSHIP)
                 STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
            FOR THE PERIOD FROM DECEMBER 31, 1997 TO MARCH 31, 1999
                            (in thousands of dollars)

<TABLE>
<CAPTION>


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

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

  Net income                                                    5,317                507                  5,824

  Repurchase of limited partnership units                        (512)                --                   (512)

  Cash distribution                                            (9,620)              (507)               (10,127)
                                                           -------------------------------------------------------

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

  Net income                                                    3,059                126                  3,185

  Repurchase of limited partnership units                         (90)                --                    (90)

  Cash distribution                                            (2,400)              (126)                (2,526)
                                                           -------------------------------------------------------

    Partners' capital as of March 31, 1999                 $   46,816            $    --             $   46,816
                                                           =======================================================
</TABLE>






























                 See accompanying notes to financial statements.



<PAGE>




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

                                                                                      For the Three Months
                                                                                         Ended March 31,
                                                                                    1999            1998
                                                                                 ------------------------------

  Operating activities

 <S>                                                                             <C>             <C>
 Net income                                                                      $    3,185      $    5,642
 Adjustments to reconcile net income
       to net cash provided by (used in) operating activities:
   Depreciation and amortization                                                      2,293           2,277
   Net (gain) loss on disposition of equipment                                           14             (33)
   Equity in net income from unconsolidated special-purpose entities                 (2,726)         (5,712)
   Changes in operating assets and liabilities:
     Restricted cash                                                                    (50)           (202)
     Accounts receivable, net                                                          (404)             51
     Prepaid expenses and other assets                                                  (61)             (6)
     Accounts payable and accrued expenses                                              239             210
     Due to affiliates                                                                  179              11
     Lessee deposits and reserve for repairs                                           (130)            (59)
     Minority interests                                                                (125)            (22)
                                                                                 -----------------------------
       Net cash provided by operating activities                                      2,414           2,157
                                                                                 -----------------------------

 INVESTING ACTIVITIES

 Payments for purchase of equipment and capitalized improvements                     (7,182)         (3,013)
 Investment in and equipment purchased and placed in
     unconsolidated special-purpose entities                                             --          (6,518)
 Distribution from unconsolidated special-purpose entities                              965           4,942
 Distributions from liquidation of unconsolidated special-purpose entities            7,021          10,443
 Payments of acquisition fees to affiliate                                             (322)           (135)
 Payments of lease negotiation fees to affiliate                                        (72)            (30)
 Proceeds from disposition of equipment                                                 218             217
                                                                                 -------------------------------
       Net cash provided by investing activities                                        628           5,906
                                                                                 -------------------------------
 Financing activities

 Payments due to affiliates                                                              --          (3,582)
 Cash distribution paid to limited partners                                          (2,400)         (2,415)
 Cash distribution paid to General Partner                                             (126)           (127)
 Repurchase of limited partnership units                                                (90)           (415)
                                                                                 -----------------------------
       Net cash used in financing activities                                         (2,616)         (6,539)
                                                                                 -----------------------------
 Net increase in cash and cash equivalents                                              426           1,524
 Cash and cash equivalents at beginning of period                                       404           9,327
                                                                                 -----------------------------
 Cash and cash equivalents at end of period                                      $      830      $   10,851
                                                                                 =============================
 SUPPLEMENTAL INFORMATION

 Interest paid                                                                   $       --      $       29
                                                                                 =============================
</TABLE>

                 See accompanying notes to financial statements.



                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

1.   OPINION OF MANAGEMENT

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

2.   SCHEDULE OF PARTNERSHIP PHASES

Beginning in the  Partnership's  seventh year of operations,  which commences on
January 1, 2002, the General Partner will stop reinvesting  excess cash, if any,
which, less reasonable reserves, will be distributed to the partners.  Beginning
in the  Partnership's  ninth year of operations,  which  commences on January 1,
2004,  the  General  Partner  intends  to begin an  orderly  liquidation  of the
Partnership's  assets.  The General Partner  anticipates that the liquidation of
the  assets  will be  completed  by the end of the  Partnership's  tenth year of
operations.  The  Partnership  will  terminate  on  December  31,  2013,  unless
terminated earlier upon sale of all equipment or by certain other events.

3.   REPURCHASE OF LIMITED PARTNERSHIP UNITS

In 1998,  the  Partnership  agreed to repurchase  approximately  60,800  limited
partnership units in 1999 for an aggregate purchase price of up to $0.8 million.
During the three months ended March 31, 1999, the  Partnership  had  repurchased
7,392  limited  partnership  units for $0.1  million.  The  General  Partner may
repurchase additional units in the future.

4.   CASH DISTRIBUTIONS

Cash  distributions  are recorded when paid and may include amounts in excess of
net income that are  considered to represent a return of capital.  For the three
months ended March 31, 1999 and 1998, cash  distributions  totaled $2.5 million,
respectively.  None of the cash distributions to the limited partners during the
three  months  ended  March  31,  1999 and 1998  were  deemed  to be a return of
capital.

Cash  distributions  related to the results from the first  quarter of 1999,  of
$1.2 million, will be paid during the second quarter of 1999.

5.   TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES

The balance due to  affiliates as of March 31, 1999 included $0.2 million due to
FSI and its affiliates  for  management  fees and $1.4 million due to affiliated
unconsolidated  special-purpose  entities (USPEs). The balance due to affiliates
as of December 31, 1998 included $0.1 million due to FSI and its  affiliates for
management fees and $1.2 million due to an affiliated USPE.

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



<PAGE>



                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

5.       TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES (CONTINUED)

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

                                                      For the Three Months
                                                         Ended March 31,
                                                          1999       1998
                                                     ---------------------------
  Management fees                                   $      59      $      78
  Data processing and administrative
     expenses                                              24             33
  Insurance expense                                        --              2

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

The  Partnership  and USPEs paid FSI $0.4 million and $0.6 million for equipment
acquisition and lease  negotiation  fees during the three months ended March 31,
1999 and 1998, respectively.

6.   EQUIPMENT

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

                                                March 31,           December 31,
                                                   1999                1998
                                              ----------------------------------

  Marine vessels                               $   39,977          $    39,977
  Marine containers                                17,230                9,957
  Trailers                                         17,203               17,280
  Aircraft                                         15,933               15,933
  Railcars                                          9,794               10,084
  Portable heaters                                  4,301                4,085
  Modular buildings                                    --                   88
                                               -----------         ------------
                                                  104,438               97,404
  Less accumulated depreciation                   (48,601)             (46,578)
                                               -----------         ------------
      Net equipment                            $   55,837          $    50,826
                                               ===========         ============

As of March 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 two commuter aircraft and four railcars.  As of December
31, 1998, all owned equipment in the Partnership's portfolio was either on lease
or operating in PLM-affiliated short-term trailer rental facilities,  except for
two commuter  aircraft and three  railcars.  The net book value of the equipment
off lease was $3.2  million and $3.3  million as of March 31, 1999 and  December
31, 1998, respectively.

During the three  months  ended  March 31,  1999,  the  Partnership  purchased a
portfolio of portable  heaters for $0.2 million,  including  acquisition fees of
$9,000,  and marine containers for $7.3 million,  including  acquisition fees of
$0.3 million. All acquisition fees were paid to FSI.

During the three  months ended March 31, 1999,  the  Partnership  disposed of or
sold railcars,  modular buildings, and trailers with an aggregate net book value
of $0.2 million for $0.2 million.

During the three  months ended March 31, 1998,  the  Partnership  disposed of or
sold trailers with a net book value of $0.2 million for $0.2 million.


<PAGE>


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

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>


                                                                                  March 31,       December 31,
                                                                                     1999             1998
                                                                                ------------------------------

<S>                                                                             <C>              <C>
50% interest in a trust owning a MD-82 Stage III commercial aircraft            $    6,370       $    6,804
24% interest in a trust owning a 767-200ER Stage III commercial aircraft             4,167            4,341
50% interest in a trust owning a MD-82 Stage III commercial aircraft                 3,186            3,546
44% interest in an entity owning a dry bulk-carrier marine vessel                    2,198            2,211
10% interest in an entity owning a mobile offshore drilling unit                     1,393            1,450
50% interest in a trust that owned four 737-200A Stage II commercial
    aircraft                                                                           193              222
25% interest in a trust that owned four 737-200A Stage II commercial
    aircraft                                                                           125              141
33% interest in two trusts that owned a total of three 737-200A Stage II
    commercial aircraft, two stage II aircraft engines, and
    a portfolio of aircraft rotables                                                    --            4,102
                                                                                -------------    -------------
 Net investments                                                                $   17,632       $   22,817
                                                                                =============    =============
</TABLE>

During the three  months  ended March 31,  1999,  the General  Partner  sold the
Partnership's  33%  interest in two trusts that owned a total of three  737-200A
Stage II commercial aircraft,  two stage II aircraft engines, and a portfolio of
aircraft  rotables.  The  Partnership's  interest  in the  trusts  were sold for
proceeds of $7.0 million for its net investment of $4.0 million.

8.   OPERATING SEGMENTS

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









                      (This space intentionally left blank)


<PAGE>


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

8.   OPERATING SEGMENTS (CONTINUED)

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

                                            Marine                                    Marine
                                            Vessel   Trailer    Aircraft  Railcar    Container  All
     For the quarter ended March 31,       Leasing   Leasing    Leasing   Leasing    Leasing    Other<F1>1   Total     1999
     ----------------------------------    --------- ---------  --------- ---------  --------- ---------  -----------

     REVENUES
       <S>                                 <C>       <C>        <C>       <C>        <C>       <C>        <C>
       Lease revenue                       $  2,304  $    983   $    505  $    692   $    458  $    317   $  5,259
       Interest income and other                 --        --         --        --         --        40         40
       Gain (loss) on disposition of             --         4         --       (42)        --        24        (14)
         equipment
                                           ------------------------------------------------------------------------
         Total revenues                       2,304       987        505       650        458       381      5,285

     COSTS AND EXPENSES
       Operations support                     1,150       205          5       141         --        11      1,512
       Depreciation and amortization            690       390        345       188        507       173      2,293
       Interest expense                          --        --         --        --         --       413        413
       Management fees to affiliate             115        54         25        49         22        17        282
       General and administrative expenses       18       112          8        13          6       171        328
       Provision for (recovery of) bad           --        42         --        (4)        --        (3)        35
     debts
                                           ------------------------------------------------------------------------
         Total costs and expenses             1,973       803        383       387        535       782      4,863
                                           ------------------------------------------------------------------------
     Minority interests                          37        --         --        --         --        --         37
     Equity in net income (loss) of USPEs       (22)       --      2,700        --         --        48      2,726
                                           ------------------------------------------------------------------------
     Net income (loss)                     $    346  $    184   $  2,822  $    263   $    (77) $   (353)  $  3,185
                                           ========================================================================

     Total assets as of March 31, 1999     $ 18,490  $  8,845   $ 20,055  $  5,304   $ 16,683  $  7,967   $ 77,344
                                           =========================================================================


                                            Marine                                   Portable
                                            Vessel   Trailer    Aircraft  Railcar     Heater
For the quarter ended March 31, 1999       Leasing   Leasing    Leasing   Leasing    Leasing   Other<F2>2  Total
   ----------------------------------    --------- ---------  --------- ---------  --------- ---------  -----------
     Revenues
       <S>                                 <C>       <C>        <C>       <C>        <C>       <C>        <C>
       Lease revenue                       $  1,557  $  1,200   $    505  $    691   $     18  $     15   $  3,986
       Interest income and other                 --        --         --        --         --        53         53
       Gain on disposition of equipment          --        33         --        --         --        --         33
                                           ------------------------------------------------------------------------
         Total revenues                       1,557     1,233        505       691         18        68      4,072

     Costs and expenses
       Operations support                       444       193        113       157         --        10        917
       Depreciation and amortization            829       498        634       217         88        11      2,277
       Interest expense                          --        --         --        --         --       410        410
       Management fees to affiliate              78        69         25        47          1         1        221
       General and administrative expenses       34       119         10        16         --       132        311
       Provision for (recovery of) bad           --         5         --        30         --       (16)        19
     debts
                                           ------------------------------------------------------------------------
         Total costs and expenses             1,385       884        782       467         89       548      4,155
                                           ------------------------------------------------------------------------
     Minority interests                          13        --         --        --         --        --         13
     Equity in net income (loss) of USPEs       (62)       --      5,752        --         --        22      5,712
                                           ------------------------------------------------------------------------
     Net income (loss)                     $    123  $    349   $  5,475  $    224   $    (71) $   (458)  $  5,642
                                           ========================================================================

     Total assets as of March 31, 1998     $ 21,582  $ 10,809   $ 26,096  $  6,281   $  3,048  $ 14,049   $ 81,865
                                           ========================================================================


<FN>
--------------------------
<F1>
1 Includes  interest income and costs not identifiable to a particular  segment,
such as general and  administrative,  interest expense,  and certain  operations
support.  Also  includes  lease  revenues  from  portable  heaters  and  modular
buildings and aggregate net income (loss) from an investment in an entity owning
a mobile offshore drilling unit.
<F2>
2 Includes  interest income and costs not identifiable to a particular  segment,
such as general and  administrative,  interest expense,  and certain  operations
support.  Also includes lease revenues from modular  buildings and aggregate net
income (loss) from an investment in an entity owning a mobile offshore  drilling
unit and an investment in an entity owning marine containers.
</FN>
</TABLE>


<PAGE>


                          PLM EQUIPMENT GROWTH FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

9.   DEBT

The General  Partner has entered into a short-term,  joint $24.5 million  credit
facility (the Committed  Bridge  Facility) on behalf of the Partnership  that is
due to expire on December  14, 1999.  Among the other  eligible  borrowers,  PLM
Equipment Growth Fund VI had borrowings of $3.7 million and TEC Acquisub,  Inc.,
an indirect wholly-owned  subsidiary of PLM International,  Inc., had borrowings
of $11.3 million under the short-term joint, $24.5 million credit facility as of
March 31, 1999. No other eligible borrower had any outstanding borrowings.

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

10.  NET INCOME PER WEIGHTED-AVERAGE PARTNERSHIP UNIT

Net income per  weighted-average  Partnership  unit was computed by dividing net
income  attributable  to  limited  partners  by the  weighted-average  number of
Partnership units deemed  outstanding  during the period.  The  weighted-average
number of  Partnership  units deemed  outstanding  during the three months ended
March 31, 1999 and 1998 was 5,331,432 and 5,359,061, respectively.

11.  CONTINGENCIES

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

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



<PAGE>


                          PLM EQUIPMENT GROWTH FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

11.  CONTINGENCIES (CONTINUED)

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

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

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

In May 1998, all parties to the Koch and Romei actions entered into a memorandum
of understanding  (MOU) related to the settlement of those actions (the monetary
settlement).  The  monetary  settlement  contemplated  by the MOU  provides  for
stipulating to a class for settlement purposes,  and a settlement and release of
all claims  against  defendants  and third party brokers in exchange for payment
for the benefit of the class of up to $6.0 million.  The final settlement amount
will  depend on the  number  of claims  filed by  authorized  claimants  who are
members  of the  class,  the  amount of the  administrative  costs  incurred  in
connection with the settlement, and the amount of attorneys' fees awarded by the
Alabama  district court. The Company will pay up to $0.3 million of the monetary
settlement, with the remainder being funded by an insurance policy.

The  parties  to the  monetary  settlement  have  also  agreed  to an  equitable
settlement (the equitable  settlement) which provides,  among other things:  (a)
for the extension of the operating  lives of the Partnership and Funds V and VII
by judicial  amendment to each of their partnership  agreements,  such that FSI,
the general partner of each such partnership, will be permitted to reinvest cash
flow,  surplus  partnership funds or retained  proceeds in additional  equipment
into the year 2004, and will liquidate the partnerships'  equipment in 2006; (b)
that FSI is entitled to earn front-end  fees  (including  acquisition  and lease
negotiation  fees) in excess of the  compensatory  limitations  set forth in the
North American Securities Administrators Association, Inc.'s Statement of Policy
by judicial  amendment to the  partnership  agreements for the  Partnership  and
Funds V and VI; (c) for a one-time redemption of up to


<PAGE>


                          PLM EQUIPMENT GROWTH FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

11.  CONTINGENCIES (CONTINUED)

10% of the  outstanding  units of the  Partnership  and Funds V and VI at 80% of
such  partnership's  net asset  value;  and (d) for the deferral of a portion of
FSI's management fees. The equitable settlement also provides for payment of the
equitable  class  attorneys'  fees  from  partnership  funds in the  event  that
distributions paid to investors in the Partnership and Funds V and VI during the
extension period reach a certain internal rate of return.

Defendants will continue to deny each of the claims and contentions and admit no
liability in connection with the proposed settlements. The parties completed the
documentation  of the  monetary and  equitable  settlements  in April 1999.  The
monetary  settlement remains subject to numerous  conditions,  including but not
limited to, notice to and  certification  of the monetary  class for purposes of
the monetary  settlement,  and  preliminary  and final  approval of the monetary
settlement  by the Alabama  district  court.  The equitable  settlement  remains
subject to numerous conditions,  including but not limited to: (a) notice to the
current  unitholders in the Partnership and Funds V and VI (the equitable class)
and  certification  of  the  equitable  class  for  purposes  of  the  equitable
settlement,  (b) preparation,  review by the Securities and Exchange  Commission
(SEC),  and  dissemination to the members of the equitable class of solicitation
statements regarding the proposed  extensions,  (c) disapproval by less than 50%
of the limited  partners in the  Partnership  and Funds V and VI of the proposed
amendments to the limited partnership  agreements,  (d) judicial approval of the
proposed amendments to the limited partnership  agreements,  and (e) preliminary
and final approval of the equitable settlement by the Alabama district court. If
the district court grants  preliminary  approval,  notices to the monetary class
and equitable class will be sent following review by the SEC of the solicitation
statements  to be prepared in  connection  with the  equitable  settlement.  The
monetary  settlement,  if approved,  will go forward  regardless  of whether the
equitable  settlement is approved or not. The Company  continues to believe that
the  allegations of the Koch and Romei actions are completely  without merit and
intends to continue to defend this matter vigorously if the monetary  settlement
is not consummated.

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

12.  Restatement

The financial  statements have been restated to reflect the consolidation of the
Partnership's  majority  interests in greater  than 50% owned USPE's  previously
reported  under the equity method of accounting  for the period ending March 31,
1999.

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



                                 1999                            1998
                        As reported      Amended       As reported    Amended
                        ---------------------------   --------------------------
Total assets           $ 73,190        $ 77,344      $ 72,174       $ 76,537
Total liabilities        26,374          26,868        25,927         26,505
Minority interests           --           3,660            --          3,785



<PAGE>


                          PLM EQUIPMENT GROWTH FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                                 MARCH 31, 1999

12.  RESTATEMENT (CONTINUED)

Additionally, as a result of the consolidation,  total revenues, total expenses,
minority  interests,  and  equity in net income of USPEs  changed  for the three
months ended March 31, 1999 and 1998 as follows:

                                     1999                            1998
                          As reported      Amended      As reported     Amended
                          ---------------------------   ------------------------
Total revenues            $  4,214       $  5,285       $  3,307       $  4,072
Total expenses               3,604          4,863          3,325          4,155
Minority interests              --             37             --             13
Equity in net income
  of USPEs                   2,575          2,726          5,660          5,712
Net income                $  3,185       $  3,185       $  5,642       $  5,642

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




















                      (this space intentionally left blank)



<PAGE>


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

(I)  RESULTS OF OPERATIONS

COMPARISON  OF PLM  EQUIPMENT  GROWTH & INCOME  FUND VII'S  (THE  PARTNERSHIP'S)
OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998

(A)  Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as repairs  and  maintenance,
equipment operating,  and asset-specific  insurance expenses) on owned equipment
increased  during the three months ended March 31,  1999,  when  compared to the
same period of 1998.  Gains or losses from the sale of  equipment,  interest and
other income,  and certain  expenses such as depreciation  and  amortization and
general and administrative expenses relating to the operating segments (see Note
8 to  the  financial  statements),  are  not  included  in the  owned  equipment
operation  discussion  because  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 March 31,
                                            1999             1998
                                         ----------------------------

  Marine vessels                         $  1,154         $  1,113
  Trailers                                    778            1,007
  Railcars                                    551              534
  Aircraft                                    500              392
  Marine containers                           458               --
  Portable heaters                            312               18
  Modular buildings                             5               15

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $2.3
million and $1.2  million,  respectively,  for the three  months ended March 31,
1999, compared to $1.6 million and $0.4 million,  respectively,  during the same
period of 1998.  Lease revenues and direct expenses  increased  during the first
quarter of 1999,  when  compared to the same period of 1998,  due to a change in
the lease  arrangement for the  Partnership's  marine vessels.  During the first
quarter of 1998, the marine vessels were  operating  under bareboat  charters in
which the  lessee  pays a flat lease  rate and also pays for  certain  operating
expenses  while on lease.  During the first quarter of 1999,  the marine vessels
were operating under a lease arrangement in which the lessee pays a higher lease
rate, however, the Partnership now pays for all operating expenses. The increase
in marine  vessel  contribution  was due to the  increase in the lease  revenues
exceeding the increase in operating expenses.

Trailers:  Trailer lease revenues and direct expenses were $1.0 million and $0.2
million,  respectively,  for the three months ended March 31, 1999,  compared to
$1.2 million and $0.2 million, respectively, during the same period of 1998. The
decrease in trailer  contribution  was due to lower  utilization and the sale of
trailers during 1999 and 1998.

Railcars:  Railcar lease revenues and direct expenses were $0.7 million and $0.1
million,  respectively,  for the three months ended March 31, 1999,  compared to
$0.7 million and $0.2 million, respectively, during the same period of 1998. The
increase in railcar  contribution during 1999 was due to an decrease in required
repairs during 1999 when compared to the same period of 1998.

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $0.5 million and
$5,000,  respectively,  for the three months  ended March 31, 1999,  compared to
$0.5 million and $0.1 million, respectively, during the same period of 1998. The
increase  in  aircraft  contribution  was due to lower  repairs to the  commuter
aircraft  that were  off-lease  during the three months ended March 31, 1999 and
1998.

Portable  heaters:  Lease revenues and direct expenses for portable heaters were
$0.3  million and $0,  respectively,  for the three months ended March 31, 1999,
compared to $18,000 and $0,  respectively,  during the same period of 1998.  The
increase in portable heater  contribution  was due to the purchase of additional
equipment during 1999 and throughout 1998.

Marine containers: Lease revenues and direct expenses for marine containers were
$0.5  million and $0,  respectively,  for the three months ended March 31, 1999.
The increase in marine containers  contribution was due entirely to the purchase
of equipment during March 1999.

(B)  Indirect Expenses Related to Owned Equipment Operations

Total  indirect  expenses were $3.4 million for the three months ended March 31,
1999, a increase from $3.2 million for the same period in 1998. The $0.1 million
increase in indirect  expenses was primary due to an increase in management fees
to affiliate due to higher lease revenues earned during 1999.

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

The net loss on  disposition  of equipment for the first quarter of 1999 totaled
$14,000,  and  resulted  from  the sale of a  railcars,  modular  buildings  and
trailers  with an aggregate  net book value of $0.2 million for proceeds of $0.2
million.  The net gain on disposition of equipment for the first quarter of 1998
totaled $33,000, and resulted from the sale of trailers with a net book value of
$0.2 million for proceeds of $0.2 million.

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

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

<TABLE>
<CAPTION>
                                                                              For the Three Months
                                                                                 Ended March 31,
                                                                             1999              1998
                                                                           ----------------------------

  <S>                                                                      <C>              <C>
  Aircraft, rotable components, and aircraft engines                       $  2,700         $  5,752
  Mobile offshore drilling unit                                                  48               22
  Marine vessels                                                                (22)             (62)
                                                                           ---------        ----------
    Equity in net income of USPEs                                          $  2,726         $  5,712
                                                                           =========        ==========
</TABLE>


Aircraft,  rotable  components,  and aircraft  engines:  During the three months
ended March 31, 1999,  lease revenues of $0.9 million and the gain from the sale
of the  Partnership's  interest  in two trusts of $3.1  million  were  offset by
depreciation  expense,  direct  expenses,  and  administrative  expenses of $1.3
million.  During the same period of 1998, lease revenues of $1.9 million and the
gain from the sale of the  Partnership's  interest in two trusts of $5.9 million
were  offset  by  depreciation  expense,  direct  expenses,  and  administrative
expenses of $2.0 million.  Lease revenues decreased $1.0 million due to the sale
of  the  Partnership's  investment  in  two  trusts  containing  ten  commercial
aircraft,  the sale of the  Partnership's  investment in two trusts that owned a
total of three  737-200A  Stage II  commercial  aircraft,  two stage II aircraft
engines, and a portfolio of aircraft rotables,  and a lower lease rate earned on
certain  equipment.  The  decrease in lease  revenues  caused by these sales was
offset,  in part,  by the purchase of two  additional  trusts each  containing a
MD-82 commercial  aircraft during 1998. The decrease in expenses of $0.7 million
was  primarily  due to lower  depreciation  expense  relating to the sale of the
Partnership's   interest   in  four   trusts   and  the  result  of  the  double
declining-balance  method of depreciation which results in greater  depreciation
in the  first  years an asset is owned  offset,  in part,  by the  Partnership's
investment in two additional trusts during 1998.

Mobile offshore  drilling unit: During the three months ended March 31, 1999 and
1998, lease revenues of $0.1 million were offset by depreciation expense, direct
expenses,  and administrative  expenses of $0.1 million.  The increase in mobile
offshore  drilling  unit  contribution  is due to an  increase in the lease rate
during  1999  and  lower  depreciation   expense  as  a  result  of  the  double
declining-balance  method of depreciation which results in greater  depreciation
in the first years an asset is owned.

Marine  vessels:  During the three months  ended March 31, 1999 and 1998,  lease
revenues of $0.2 million were offset by depreciation  expense,  direct expenses,
and  administrative  expenses of $0.2  million.  The  increase in marine  vessel
contribution was lower depreciation  expense as a 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

As a result of the foregoing,  the  Partnership had a net income of $3.2 million
for the three  months  ended  March 31,  1999,  compared to a net income of $5.6
million  during the same period of 1998. The  Partnership's  ability to acquire,
operate,  and liquidate assets,  secure leases,  and re-lease those assets whose
leases  expire  is  subject  to  many  factors.   Therefore,  the  Partnership's
performance in the first quarter of 1999 is not necessarily indicative of future
periods. In the first quarter of 1999, the Partnership  distributed $2.4 million
to the limited partners, or $0.45 per weighted-average limited partnership unit.

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

For the three months ended March 31, 1999, the Partnership  generated  operating
cash  of  $3.4  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 three months ended March
31, 1999 of approximately $2.5 million) to the partners.

During the three months ended March 31, 1999, PLM Financial Services,  Inc. (FSI
or the General Partner), a wholly-owned  subsidiary of PLM International,  Inc.,
sold or disposed of  Partnership  owned  equipment and  investments in USPEs and
received aggregate proceeds of $7.2 million.

The Partnership  purchased a portfolio of portable  heaters for $0.2 million and
marine  containers for $7.0 million and paid  acquisition and lease  negotiation
fees of $0.4 million to FSI for this equipment.

As of March 31, 1999, $1.4 million in engine reserves and security  deposits was
due to an affiliated USPE.

The General  Partner has entered into a short-term  joint $24.5  million  credit
facility.  As of April 30, 1999,  TEC Acquisub,  Inc., an indirect  wholly-owned
subsidiary of PLM  International,  Inc., had borrowings of $14.8 million and PLM
Equipment  Growth Fund VI had  borrowings of $3.7 million  under the  short-term
joint  $24.5  million  credit  facility.  No  other  eligible  borrower  had any
outstanding  borrowings.  The General Partner  believes it will be able to renew
the Committed Bridge Facility upon its expiration with similar terms as those in
the current Committed Bridge Facility.

(III) EFFECTS OF YEAR 2000

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

The General Partner has  established a special Year 2000 oversight  committee to
review  the  impact  of Year  2000  issues on its  software  products  and other
business  systems  in  order to  determine  whether  such  systems  will  retain
functionality  after  December  31, 1999.  The General  Partner (a) is currently
integrating Year  2000-compliant  programming code into its existing  internally
customized and internally developed transaction  processing software systems and
(b) the General Partner's  accounting and asset management software systems have
either already been made Year 2000-compliant or Year 2000-compliant  upgrades of
such systems are planned to be implemented by the General Partner before the end
of  fiscal  1999.  Although  the  General  Partner  believes  that its Year 2000
compliance  program  can be  completed  by  the  end of  1999,  there  can be no
assurance that the  compliance  program will be completed by that date. To date,
the  costs  incurred  and  allocated  to the  Partnership  to  become  Year 2000
compliant have not been material.  Also, the General Partner believes the future
cost  allocable to the  Partnership  to become Year 2000  compliant  will not be
material.

It is possible that certain of the  Partnership's  equipment lease portfolio may
not be  Year  2000  compliant.  The  General  Partner  is  currently  contacting
equipment  manufacturers  of the  Partnership's  leased  equipment  portfolio to
assure Year 2000 compliance or to develop  remediation  strategies.  The General
Partner does not expect that  non-Year 2000  compliance of its leased  equipment
portfolio will have an adverse material impact on its financial statements.

Some risks  associated  with the Year 2000 problem are beyond the ability of the
Partnership  or the General  Partner to control,  including  the extent to which
third  parties  can  address  the Year 2000  problem.  The  General  Partner  is
communicating with vendors, services providers, and customers in order to assess
the Year 2000  compliance  readiness of such parties and the extent to which the
Partnership is vulnerable to any third-party  Year 2000 issues.  There can be no
assurance  that the  software  systems of such parties will be converted or made
Year 2000  compliant in a timely manner.  Any failure by the General  Partner or
such other parties to make their  respective  systems Year 2000 compliant  could
have a material adverse effect on the business,  financial position, and results
of operations  from the  Partnership.  The General  Partner will make an ongoing
effort to recognize and evaluate potential exposure relating to third-party Year
2000  noncompliance,  and will develop a contingency plan if the General Partner
determines that third-party noncompliance will have a material adverse effect on
the Partnership's business, financial position, or results of operation.

The General  Partner is currently  developing a contingency  plan to address the
possible  failure of any  systems  due to the Year 2000  problems.  The  General
Partner anticipates these plans will be completed by September 30, 1999.

(IV)  ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial  Accounting  Standards Board issued  "Accounting for
Derivative   Instruments   and  Hedging   Activities",   (SFAS  No.  133)  which
standardizes  the  accounting  for  derivative  instruments,  including  certain
derivative instruments embedded in other contracts,  by requiring that an entity
recognize  those items as assets or  liabilities  in the  statement of financial
position and measure  them at fair value.  This  statement is effective  for all
quarters of fiscal years  beginning  after June 15, 1999.  As of March 31, 1999,
the  General  Partner is  reviewing  the effect this  standard  will have on the
Partnership's financial statements.

(V)   OUTLOOK FOR THE FUTURE

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

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

The  ability  of the  Partnership  to  realize  acceptable  lease  rates  on its
equipment in the different equipment markets is contingent on many factors, such
as specific market conditions and economic activity, technological obsolescence,
and  government  or other  regulations.  The  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.


<PAGE>



(VI)  FORWARD-LOOKING INFORMATION

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

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Partnership's  primary market risk exposure is that of currency  devaluation
risk.  During the three months ended March 31,  1999,  65% of the  Partnership's
total lease  revenues  from  wholly-  and  partially-owned  equipment  came from
non-United States domiciled lessee's.  Most of the Partnership's  leases require
payment in United States (U.S.)  currency.  If these lessees  currency  devalues
against the U.S. dollar, the lessees could potentially  encounter  difficulty in
making the U.S. dollar denominated lease payments.




<PAGE>



                          PART II -- OTHER INFORMATION


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

           (a)    Exhibits

                  None.

           (b)    Reports on Form 8-K

                  None.





<PAGE>







Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                          PLM EQUIPMENT GROWTH & INCOME FUND VII

                          By:      PLM Financial Services, Inc.
                                   General Partner



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