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




[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the fiscal quarter ended March 31, 2002


[x]  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.)

        120 Montgomery Street,
     Suite 1350, San Francisco, CA                          94104
         (Address of principal                           (Zip code)
          executive offices)


       Registrant's telephone number, including area code: (415) 445-3201
                             -----------------------


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)
                            CONDENSED BALANCE SHEETS
                 (in thousands of dollars, except unit amounts)
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                             March 31,          December 31,
                                                                               2002                2001
                                                                         -----------------------------------
ASSETS

<S>                                                                      <C>                   <C>
Equipment held for operating leases, at cost                             $       79,947        $       79,955
Less accumulated depreciation                                                   (44,518)              (42,910)
                                                                         ---------------------------------------
  Net equipment                                                                  35,429                37,045

Cash and cash equivalents                                                         4,774                 3,129
Restricted cash                                                                     317                    75
Accounts receivable, less allowance for doubtful accounts
    of $551 in 2002 and $306 in 2001                                              2,033                 1,764
Investments in unconsolidated special-purpose entities                            7,927                 8,351
Deferred charges, net of accumulated amortization
    of $354 in 2002 and $324 in 2001                                                200                   229
Prepaid expenses and other assets                                                   113                    91
                                                                         ---------------------------------------

      Total assets                                                       $       50,793        $       50,684
                                                                         =======================================

LIABILITIES AND PARTNERS' CAPITAL

Liabilities:
Accounts payable and accrued expenses                                    $          402        $          959
Due to affiliates                                                                   628                   551
Lessee deposits and reserve for repairs                                           1,043                   945
Notes payable                                                                    14,000                14,000
                                                                         ---------------------------------------
  Total liabilities                                                              16,073                16,455
                                                                         ---------------------------------------

Partners' capital:
Limited partners (4,981,450 limited partnership units as of
    March 31, 2002 and 5,041,936 as of December 31, 2001)                        34,720                34,229
General Partner                                                                      --                    --
                                                                         ---------------------------------------
  Total partners' capital                                                        34,720                34,229
                                                                         ---------------------------------------

      Total liabilities and partners' capital                            $       50,793        $       50,684
                                                                         =======================================

</TABLE>
















       See accompanying notes to unaudited condensed financial statements.


<PAGE>



                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A Limited Partnership)
                       CONDENSED STATEMENTS OF OPERATIONS
         (in thousands of dollars, except weighted-average unit amounts)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                   For the Three Months
                                                                                      Ended March 31,
                                                                                   2002            2001
                                                                               ------------------------------
REVENUES

<S>                                                                            <C>             <C>
Lease revenue                                                                  $    3,941      $     3,991
Interest and other income                                                              17               77
Net gain on disposition of equipment                                                    3                2
                                                                               ------------------------------
  Total revenues                                                                    3,961            4,070
                                                                               ------------------------------

EXPENSES

Depreciation and amortization                                                       1,639            2,025
Repairs and maintenance                                                               479              368
Equipment operating expenses                                                          444              372
Insurance expenses                                                                    142              164
Management fees to affiliate                                                          197              208
Interest expense                                                                      252              324
General and administrative expenses to affiliates                                      68              183
Other general and administrative expenses                                             109              233
Provision for bad debts                                                               246               23
                                                                               ------------------------------
  Total expenses                                                                    3,576            3,900
                                                                               ------------------------------

Equity in net income (loss) of unconsolidated special-purpose entities                 22             (372)
                                                                               ------------------------------

Net income (loss)                                                              $      407      $      (202)
                                                                               ==============================

PARTNERS' SHARE OF NET INCOME (LOSS)

Limited partners                                                               $      407      $      (328)
General Partner                                                                        --              126
                                                                               ------------------------------

Total                                                                          $      407      $      (202)
                                                                               ==============================

Limited partners' net income (loss) per weighted-average
    limited partnership unit                                                   $     0.08      $     (0.06 )
                                                                               ==============================

Cash distribution                                                              $       --      $     1,422
                                                                               ==============================

 Cash distribution per weighted-average limited partnership unit               $       --      $      0.24
                                                                               ==============================
</TABLE>












       See accompanying notes to unaudited condensed financial statements.

                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                            ( A Limited Partnership)
              CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
            For the period from December 31, 2000 to March 31, 2002
                            (in thousands of dollars)
                                   (unaudited)
<TABLE>
<CAPTION>

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

<S>                                                       <C>                   <C>                 <C>
  Partners' capital as of December 31, 2000               $   36,715            $    --             $   36,715

Net income                                                     2,021                126                  2,147

Purchase of limited partnership units                         (3,211)                --                 (3,211)

Cash distribution                                             (1,296)              (126)                (1,422)
                                                          -------------------------------------------------------

  Partners' capital as of December 31, 2001                   34,229                 --                 34,229

Net income                                                       407                 --                    407

Canceled purchase of limited partnership units                    84                 --                     84
                                                          -------------------------------------------------------

  Partners' capital as of March 31, 2002                  $   34,720            $    --             $   34,720
                                                          =======================================================

</TABLE>
































       See accompanying notes to unaudited condensed financial statements.



<PAGE>




                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A Limited Partnership)
                       CONDENSED STATEMENTS OF CASH FLOWS
                            (in thousands of dollars)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                        For the Three Months
                                                                                           Ended March 31,
                                                                                         2002            2001
                                                                                     -----------------------------

OPERATING ACTIVITIES

<S>                                                                                   <C>             <C>
Net income (loss)                                                                     $      407      $     (202)
Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
  Depreciation and amortization                                                            1,639           2,025
  Provision for bad debts                                                                    246              23
  Net gain on disposition of equipment                                                        (3)             (2)
  Equity in net (income) loss from unconsolidated special-purpose entities                   (22)            372
  Changes in operating assets and liabilities:
    Restricted cash                                                                         (242)             (9)
    Accounts receivable, net                                                                (433)            (49)
    Prepaid expenses and other assets                                                        (22)             (3)
    Accounts payable and accrued expenses                                                    221              96
    Due to affiliates                                                                         77              24
    Lessee deposits and reserve for repairs                                                   98              57
                                                                                      ----------------------------
      Net cash provided by operating activities                                            1,966           2,332
                                                                                      ----------------------------

INVESTING ACTIVITIES

Payments for purchase of equipment and capitalized repairs                                    --          (8,009)
Investment in and equipment purchased and placed in
    unconsolidated special purpose entities                                                   --             (86)
Distribution from unconsolidated special-purpose entities                                    448             399
Payments for acquisition fees to affiliate                                                    --            (135)
Payments for lease negotiation fees to affiliate                                              --             (50)
Proceeds from disposition of equipment                                                         9              19
                                                                                      ----------------------------
      Net cash provided by (used in) investing activities                                    457          (7,862)
                                                                                      ----------------------------

FINANCING ACTIVITIES

Purchase of limited partnership units                                                       (778 )            --
Proceeds from short-term notes payable to affiliate                                           --           5,500
Cash distribution paid to limited partners                                                    --          (1,296)
Cash distribution paid to General Partner                                                     --            (126)
                                                                                      ----------------------------
      Net cash (used in) provided by financing activities                                   (778 )         4,078
                                                                                      ----------------------------

Net increase (decrease) in cash and cash equivalents                                       1,645          (1,452)
Cash and cash equivalents at beginning of period                                           3,129           2,941
                                                                                      ----------------------------
Cash and cash equivalents at end of period                                            $    4,774      $    1,489
                                                                                      ============================

Supplemental information

Non cash cancellation of purchase of limited partnership units                        $       84      $       --
                                                                                      ============================
</TABLE>






       See accompanying notes to unaudited condensed financial statements.


<PAGE>


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

1.   OPINION OF MANAGEMENT

In the opinion of the  management  of PLM Financial  Services,  Inc. (FSI or the
General Partner),  the accompanying  unaudited  condensed  financial  statements
contain all  adjustments  necessary,  consisting  primarily of normal  recurring
accruals,  to present fairly the unaudited  condensed  financial position of PLM
Equipment  Growth & Income Fund VII (the  Partnership)  as of March 31, 2002 and
December 31, 2001,  the unaudited  condensed  statements  of operations  for the
three months ended March 31, 2002 and 2001, the unaudited  condensed  statements
of changes in partners'  capital for the period from  December 31, 2000 to March
31,  2002 and the  unaudited  condensed  statements  of cash flows for the three
months ended March 31, 2002 and 2001.  Certain  information and note disclosures
normally included in financial statements prepared in accordance with accounting
principles  generally  accepted  in the  United  States  of  America  have  been
condensed or omitted from the accompanying  condensed financial statements.  For
further  information,  reference should be made to the financial  statements and
notes thereto included in the  Partnership's  Annual Report on Form 10-K for the
year ended December 31, 2001, on file at the Securities and Exchange Commission.

2.   SCHEDULE OF PARTNERSHIP PHASES

The  Partnership  is  currently  in  its  investment   phase  during  which  the
Partnership  uses a portion of the cash generated  from  operations and proceeds
from asset sales to purchase additional equipment.  The General Partner believes
these acquisitions may cause the Partnership to generate additional earnings and
cash flow for the Partnership.

The  Partnership  may reinvest its cash flow,  surplus cash and  equipment  sale
proceeds  in  additional  equipment,  consistent  with  the  objectives  of  the
Partnership, until December 31, 2004. The Partnership will terminate on December
31, 2013,  unless  terminated  earlier upon sale of all equipment and by certain
other events.

3.   RECLASSIFICATION

Certain  amounts in the 2001  financial  statements  have been  reclassified  to
conform to the 2002 presentations.

4.   CASH DISTRIBUTIONS

Cash  distributions  are recorded when paid and may include amounts in excess of
net income that are  considered a return of capital.  For the three months ended
March 31, 2001, cash distributions  totaled $1.4 million.  Cash distributions of
$1.3  million to the limited  partners for the three months ended March 31, 2001
were deemed to be a return of capital.  No cash  distributions  were paid to the
limited partners during the three months ended March 31, 2002.

5.   TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES

The balance due to  affiliates as of March 31, 2002 included $0.1 million due to
FSI and its affiliates  for  management  fees and $0.5 million due to affiliated
unconsolidated  special-purpose  entities (USPEs). The balance due to affiliates
as of December 31, 2001 includes $0.2 million due to FSI and its  affiliates for
management fees and $0.4 million due to affiliated USPEs.

The  Partnership's  proportional  share of the affiliated  expenses  incurred by
USPEs  during 2002 and 2001 is listed in the  following  table (in  thousands of
dollars):

                                                     For the Three Months
                                                        Ended March 31,
                                                     2002            2001
                                                   --------------------------
Management fees                                    $     25       $     59
Data processing and administrative
   expenses                                               7             41


<PAGE>



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

5.   TRANSACTIONS WITH GENERAL PARTNER AND AFFILIATES (continued)

These affiliate  expenses reduced the  Partnership's  proportional  share of the
equity interest in the income in USPEs.

The  Partnership  and  USPEs  accrued  or paid FSI $0.3  million  for  equipment
acquisition and lease  negotiation  fees during the three months ended March 31,
2001. No fees were paid or accrued during the three months ended March 31, 2002.

6.   EQUIPMENT

Owned  equipment held for operating  leases is stated at cost. The components of
owned equipment were as follows (in thousands of dollars):

                                                 March 31,          December 31,
                                                 2002                 2001
                                             -----------------------------------

Marine containers                            $    38,907          $   38,915
Marine vessels                                    22,212              22,212
Rail equipment                                     9,602               9,602
Aircraft                                           5,483               5,483
Trailers                                           3,743               3,743
                                             ------------         -----------
                                                  79,947              79,955
Less accumulated depreciation                    (44,518)            (42,910)
                                             ------------         -----------
    Net equipment                            $    35,429          $   37,045
                                             ============         ===========

As of March 31, 2002, all owned equipment in the Partnership's  portfolio was on
lease except for 11 railcars.  As of December 31, 2001,  all owned  equipment in
the  Partnership's  portfolio  was on lease except for 8 railcars.  The net book
value of the  equipment  off lease  was $0.1  million  as of March 31,  2002 and
December 31, 2001.

During the three months ended March 31, 2001, the Partnership  purchased  marine
containers for $8.0 million and paid acquisition fees of $0.1 million to FSI for
this  purchase.  No equipment was purchased  during the three months ended March
31, 2002.

During the three months ended March 31, 2002, the Partnership disposed of marine
containers  with a net book value of $6,000 for $9,000.  During the three months
ended March 31, 2001, the Partnership  disposed of a marine container with a net
book value of $2,000 for $4,000.

7.   INVESTMENTS IN UNCONSOLIDATED SPECIAL-PURPOSE ENTITIES

The  Partnership  owns equipment  jointly with  affiliated  programs.  These are
single  purpose   entities  that  do  not  have  any  debt  or  other  financial
encumbrances.  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,
                                                                                        2002             2001
                                                                                   ------------------------------

<S>                                                                                <C>               <C>
     38% interest in a trust owning a stage III commercial aircraft                $    5,308        $    5,564
     50% interest in a trust owning a stage III commercial aircraft                     2,674             2,845
     80% interest in an entity that owned a dry bulk-carrier marine vessel                (14)              (14)
     50% interest in a trust that owned a stage III commercial aircraft                   (41)              (44)
                                                                                    ----------       -----------
         Net investments                                                            $   7,927        $    8,351
                                                                                    ==========       ===========
</TABLE>


<PAGE>


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

7.   INVESTMENTS IN UNCONSOLIDATED SPECIAL-PURPOSE ENTITIES (continued)

As of March 31, 2002 and December 31, 2001, all  jointly-owned  equipment in the
Partnership's USPE portfolio was on lease.

8.   OPERATING SEGMENTS

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

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

                                            Marine                                    Marine
     For the three months ended             Vessel   Trailer    Aircraft  Railcar    Container
             March 31, 2002                Leasing   Leasing    Leasing   Leasing    Leasing    Other(1)    Total
     ----------------------------------    --------- ---------  --------- ---------  --------- ---------  -----------

     REVENUES
<S>                                        <C>       <C>        <C>       <C>        <C>       <C>        <C>
       Lease revenue                       $  1,305  $    195   $    271  $    612   $  1,558  $     --   $  3,941
       Interest income and other                 --        --         --        --         --        17         17
       Gain on disposition of equipment          --        --         --        --          3        --          3
                                           ------------------------------------------------------------------------
         Total revenues                       1,305       195        271       612      1,561        17      3,961
                                           ------------------------------------------------------------------------

     COSTS AND EXPENSES
       Operations support                       793        98          2       138         18        16      1,065
       Depreciation and amortization            310        52         --       118      1,152         7      1,639
       Interest expense                          --        --         --        --         --       252        252
       Management fees to affiliate              65         9         --        45         78        --        197
       General and administrative expenses       13        27         (2)       22         --       117        177
       Provision for (recovery of) bad           --        10        271       (35)        --        --        246
     debts
                                           ------------------------------------------------------------------------
         Total costs and expenses             1,181       196        271       288      1,248       392      3,576
                                           ------------------------------------------------------------------------
     Equity in net income (loss) of USPEs        25        --         (3 )      --         --        --         22
                                           ------------------------------------------------------------------------
     Net income (loss)                     $    149  $     (1)  $     (3) $    324   $    313  $   (375)  $    407
                                           ========================================================================

     Total assets as of March 31, 2002     $  5,255  $    962   $  8,346  $  3,501   $ 27,483  $  5,246   $ 50,793
                                           ========================================================================
</TABLE>
<TABLE>
<CAPTION>


                                            Marine                                    Marine
     For the three months ended             Vessel   Trailer    Aircraft  Railcar    Container
             March 31, 2001                Leasing   Leasing    Leasing   Leasing    Leasing    Other(1)    Total
     ----------------------------------    --------- ---------  --------- ---------  --------- ---------  -----------

     REVENUES
<S>                                        <C>       <C>        <C>       <C>        <C>       <C>        <C>
       Lease revenue                       $  1,463  $    170   $    271  $    611   $  1,476  $     --   $  3,991
       Interest income and other                 --        --         --        --         --        77         77
       Gain on disposition of equipment          --        --         --        --          2        --          2
                                           ------------------------------------------------------------------------
         Total revenues                       1,463       170        271       611      1,478        77      4,070
                                           ------------------------------------------------------------------------

     COSTS AND EXPENSES
       Operations support                       596        63          4       163         18        60        904
       Depreciation and amortization            310        52        154       135      1,367         7      2,025
       Interest expense                          --        --         --        --         --       324        324
       Management fees to affiliate              73         9         14        39         73        --        208
       General and administrative expenses       14        22          4        16         --       360        416
       Provision for (recovery of) bad           --        (3 )       --        18          8        --         23
     debts
                                           ------------------------------------------------------------------------
         Total costs and expenses               993       143        176       371      1,466       751      3,900
                                           ------------------------------------------------------------------------
     Equity in net income (loss) of USPEs       107        --       (479)       --         --        --       (372)
                                           ------------------------------------------------------------------------
     Net income (loss)                     $    577  $     27   $   (384) $    240   $     12  $   (674)  $   (202)
                                           ========================================================================
</TABLE>

(1)  Includes  certain  assets not  identifiable  to a specific  segment such as
     cash, certain restricted cash and accounts receivable, deferred charges and
     prepaid expenses.  Also includes interest income and costs not identifiable
     to  a  particular   segment,   such  as  interest   expense,   and  certain
     amortization, general and administrative and operations support expenses.


<PAGE>


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

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

Net income (loss) per weighted-average partnership unit was computed by dividing
net income  (loss)  attributable  to limited  partners  by the  weighted-average
number  of  partnership  units  deemed   outstanding   during  the  period.  The
weighted-average number of partnership units deemed outstanding during the three
months ended March 31, 2002 and 2001 was 5,002,284 and 5,323,569, respectively.

10.  LIMITED PARTNERSHIP UNITS

During 2001, the General Partner agreed to purchase 351,290 limited  partnership
units  and  paid or  accrued  $3.2  million  to the  purchasing  agent  for this
purchase.

The purchasing  agent purchased 60,486 units during the three months ended March
31, 2002 and 281,633  units as of December  31,  2001,  which is  reflected as a
reduction in Partnership units. Under the terms of the purchase agreement,  only
the units held by the owner on the date of the  agreement  were  eligible  to be
purchased. The General Partner has not been able to purchase the remaining 9,171
units due to the  eligible  owners  selling  the units in the open  market.  The
General  Partner has determined  that the remaining  units will not be purchased
and has submitted a $0.1 million refund  request from the purchasing  agent that
is included in  accounts  receivable  on the  accompanying  unaudited  condensed
balance sheet as of March 31, 2002.

11.  SUBSEQUENT EVENT

In April  2002,  PLM  International,  Inc.  (PLMI)  extended  the $10.0  million
warehouse  facility,  which is shared by the  Partnership,  PLM Equipment Growth
Fund V, PLM Equipment Growth Fund VI, and Professional  Lease Management  Income
Fund I, LLC and  Acquisub  LLC, a wholly owned  subsidiary  of PLMI which is the
parent  company of FSI.  The facility  provides for  financing up to 100% of the
cost of the equipment.  Outstanding borrowings by one borrower reduce the amount
available  to  each  of the  other  borrowers  under  the  facility.  Individual
borrowings may be outstanding  for no more than 270 days,  with all advances due
no later than July 11, 2002.  Interest accrues either at the prime rate or LIBOR
plus  2.0% at the  borrower's  option  and is set at the time of an  advance  of
funds.  Borrowings by the Partnership are guaranteed by PLMI. The Partnership is
not liable for the advances made to the other  borrowers.  This facility expires
on July 11,  2002.  The General  Partner is currently in the process of renewing
the warehouse facility.







                      (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 THE PLM EQUIPMENT  GROWTH & Income Fund VII's (the  Partnership's)
Operating Results for the Three Months Ended March 31, 2002 and 2001

(A)  Owned Equipment Operations

Lease  revenues  less  direct  expenses  (defined  as repairs  and  maintenance,
equipment operating,  and asset-specific  insurance expenses) on owned equipment
decreased  during the three  months  ended March 31,  2002  compared to the same
period of 2001.  Gains or losses from the sale of equipment,  interest and other
income, and certain expenses such as management fees to affiliate,  depreciation
and  amortization  and  general  and  administrative  expenses  relating  to the
operating segments (see Note 8 to the unaudited condensed 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,
                                                  2002             2001
                                                ---------------------------

Marine containers                               $ 1,540          $ 1,458
Marine vessels                                      512              867
Railcars                                            474              448
Aircraft                                            269              267
Trailers                                             97              107

Marine containers: Lease revenues and direct expenses for marine containers were
$1.6  million and $18,000  respectively,  for the three  months  ended March 31,
2002, compared to $1.5 million and $18,000, respectively, during the same period
of 2001.  An increase in lease  revenues of $0.1 million was due to the purchase
of additional equipment during the first quarter of 2001.

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $1.3
million and $0.8  million,  respectively,  for the three  months ended March 31,
2002, compared to $1.5 million and $0.6 million,  respectively,  during the same
period of 2001.  The decrease in lease revenues of $0.2 million during the first
quarter of 2002  compared  to 2001 was due to lower  lease  rates  earned on the
Partnership's  marine  vessels.  The increase in direct expenses of $0.2 million
was  caused by higher  repair  and  operating  costs to one of the owned  marine
vessels during 2002 compared to 2001.

Railcars:  Railcar lease revenues and direct expenses were $0.6 million and $0.1
million,  respectively,  for the three months ended March 31, 2002,  compared to
$0.6 million and $0.2 million,  respectively,  during the same period of 2001. A
decrease in railcar  repairs of $25,000 was due to lower repair costs during the
three months ending March 31, 2002 compared to the same period of 2001.

Aircraft:  Aircraft  lease  revenues and direct  expenses  were $0.3 million and
$2,000,  respectively,  for the three months  ended March 31, 2002,  compared to
$0.3 million and $4,000, respectively, during the same period of 2001.

Trailers:  Trailer lease revenues and direct expenses were $0.2 million and $0.1
million, respectively, for the three months ended March 31, 2002 and 2001.

(B) Indirect Expenses Related to Owned Equipment Operations

Total  indirect  expenses of $2.5  million for the three  months ended March 31,
2002  decreased  from $3.0  million  for the same  period  in 2001.  Significant
variances are explained as follows:

     (i) A $0.4 million decrease in depreciation and amortization  expenses from
2001 levels  reflects the decrease of  approximately  $0.2 million caused by the
double-declining  balance  method  of  depreciation  which  results  in  greater
depreciation in the first years an asset is owned and a decrease of $0.2 million
resulting from certain assets being fully depreciated during 2001;

     (ii) A $0.2 million decrease in general and administrative  expenses during
the three  months ended March 31, 2002 was due to a decrease of $0.1 million due
to lower professional costs and $0.1 million resulting from lower allocations by
the General Partner for office services and data processing services;

     (iii)  A $0.1  million  decrease  in  interest  expense  was due to a lower
average  outstanding  debt balance in the first  quarter of 2002 compared to the
same period of 2001; and

     (iv) A $0.2 million  increase in the  provision  for bad debts was based on
the Manager's  evaluation of the collectability of receivables compared to 2001.
The provision for bad debt expense recorded in the first quarter of 2002 of $0.2
million was primarily related to one aircraft lessee

(C) Interest and Other Income

Interest and other  income  decreased  $0.1 million due to a one time  insurance
settlement of $36,000  received  during the three months ended March 31, 2001. A
similar   settlement   was  not  received   during  the  same  period  of  2002.
Additionally,  interest  income  decreased  $24,000  due  to a  decrease  in the
interest rate earned on cash balances.

(D) Net Gain on Disposition of Owned Equipment

The net gain on  disposition  of equipment for the first quarter of 2002 totaled
$3,000 and resulted from the sale of marine  containers with a net book value of
$6,000  for  $9,000.  The net gain on  disposition  of  equipment  for the first
quarter of 2001 totaled $2,000 and resulted from the sale of a marine  container
with an aggregate net book value of $2,000 for $4,000.

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

Equity in net income (loss) of USPEs represents the  Partnership's  share of the
net income (loss) generated from the operation of jointly owned assets accounted
for under the equity method of accounting. These entities are single purpose and
have no debt or other  financial  encumbrances.  The  following  table  presents
equity in net income (loss) by equipment type (in thousands of dollars):
<TABLE>
<CAPTION>
                                                             For the Three Months
                                                                Ended March 31,
                                                             2002             2001
                                                          ----------------------------

<S>                                                       <C>               <C>
Marine vessels                                            $     25          $   107
Aircraft                                                        (3)            (479)
                                                          -----------       ----------
  Equity in net income (loss) of USPEs                    $     22          $  (372)
                                                          ===========       ==========
</TABLE>

Marine  vessels:  As of March 31, 2002, the Partnership had sold all interest in
entities that owned marine vessels.  As of March 31, 2001, the Partnership owned
an interest in two entities that owned marine  vessels.  During the three months
ended March 31, 2002, revenues of $27,000 were offset by administrative expenses
of  $2,000.   During  the  three  months  ended  March  31,  2002,  one  of  the
Partnership's  interests  in an entity  that owned a marine  vessel  received an
insurance settlement of $25,000.  During the same period of 2001, lease revenues
of $0.5  million  were offset by  depreciation  expense,  direct  expenses,  and
administrative expenses of $0.4 million.

The  decrease  in  marine  vessel  contribution  was  due  to  the  sale  of the
Partnership interests in entities that owned marine vessels during 2001.

Aircraft:  As of March 31, 2002 and 2001, the  Partnership  owned an interest in
entities  that owned three  commercial  aircraft.  During the three months ended
March 31,  2002,  lease  revenues of $0.5  million  were offset by  depreciation
expense,  direct expenses, and administrative  expenses of $0.5 million.  During
the same  period  of  2001,  lease  revenues  of $0.7  million  were  offset  by
depreciation  expense,  direct  expenses,  and  administrative  expenses of $1.1
million.

Lease  revenues  decreased  $0.2  million  due to the leases for two  commercial
aircraft in the trusts being  renegotiated  at a lower rate.  This  decrease was
offset,  in part,  by an increase of $0.1  million  earned by the trust owning a
Boeing  737-300  commercial  aircraft  due to a new lease going into effect at a
higher rate.

The  decrease  in  expenses  of $0.6  million  was due to  required  repairs and
maintenance of $0.3 million to the Boeing 737-300 that were not required  during
2002 and by $0.3  million  in lower  depreciation  expense  as the result of the
double  declining-balance  method  of  depreciation  which  results  in  greater
depreciation in the first years an asset is owned.

(F) Net Income (Loss)

As a result of the foregoing,  the  Partnership had a net income of $0.4 million
for the three months ended March 31, 2002,  compared to net loss of $0.2 million
during the same period of 2001. 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 2002 is not necessarily indicative of future periods.

(II) CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires the General Partner
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent  assets and liabilities at the date
of the financial  statements  and the reported  amounts of revenues and expenses
during the reporting  period.  On a regular basis,  the General  Partner reviews
these estimates including those related to asset lives and depreciation methods,
impairment  of long-lived  assets,  allowance  for doubtful  accounts,  reserves
related to legally mandated  equipment repairs and contingencies and litigation.
These estimates are based on the General Partner's historical  experience and on
various other  assumptions  believed to be reasonable  under the  circumstances.
Actual results may differ from these estimates  under  different  assumptions or
conditions. The General Partner believes, however, that the estimates, including
those for the  above-listed  items,  are reasonable and that actual results will
not vary significantly from the estimated amounts.

The General Partner believes the following critical  accounting  policies affect
the more  significant  judgments and estimates  used in the  preparation  of the
Partnership's financial statements:

Asset  lives  and  depreciation  methods:  The  Partnership's  primary  business
involves the purchase and  subsequent  lease of  long-lived  transportation  and
related  equipment.  The General Partner has chosen asset lives that it believes
correspond to the economic life of the related  asset.  The General  Partner has
chosen  a  deprecation  method  that it  believes  matches  the  benefit  to the
Partnership from the asset with the associated costs.  These judgments have been
made based on the General Partner's expertise in each equipment segment that the
Partnership  operates. If the asset life and depreciation method chosen does not
reduce the book value of the asset to at least the  potential  future cash flows
from the asset to the Partnership, the Partnership would be required to record a
loss on revaluation. Likewise, if the net book value of the asset was reduced by
an amount greater than the economic value has deteriorated,  the Partnership may
record a gain on sale upon final disposition of the asset.

Impairment of long-lived assets: On a regular basis, the General Partner reviews
the carrying value of its equipment and investments in USPEs to determine if the
carrying  value of the assets  may not be  recoverable  due to current  economic
conditions.  This  requires  the General  Partner to make  estimates  related to
future  cash  flows  from  each  asset  as  well  as  the  determination  if the
deterioration  is  temporary  or  permanent.  If these  estimates or the related
assumptions  change in the  future,  the  Partnership  may be required to record
additional impairment charges.

Allowance  for doubtful  accounts:  The  Partnership  maintains  allowances  for
doubtful  accounts for  estimated  losses  resulting  from the  inability of the
lessees to make the lease  payments.  These estimates are primarily based on the
amount of time that has lapsed  since the related  payments  were due as well as
specific  knowledge  related to the ability of the lessees to make the  required
payments.  If the  financial  condition  of the  Partnership's  lessees  were to
deteriorate,  additional  allowances could be required that would reduce income.
Conversely,  if the  financial  condition  of the lessees  were to improve or if
legal  remedies to collect past due amounts were  successful,  the allowance for
doubtful accounts may need to be reduced and income would be increased.

Reserves for repairs:  The Partnership  accrues for legally  required repairs to
equipment  such as dry  docking  for  marine  vessels  and engine  overhauls  to
aircraft engines over the period prior to the required repairs.  The amount that
is  reserved  is based on the  General  Partner's  expertise  in each  equipment
segment, the past history of such costs for that specific piece of equipment and
discussions  with  independent,  third party  equipment  brokers.  If the amount
reserved for is not adequate to cover the cost of such repairs or if the repairs
must be performed  earlier than the General Partner  estimated,  the Partnership
would incur additional repair and maintenance or equipment operating expenses.

Contingencies  and litigation:  The Partnership is subject to legal  proceedings
involving  ordinary and routine  claims  related to its  business.  The ultimate
legal and financial  liability  with respect to such matters cannot be estimated
with  certainty and requires the use of estimates in recording  liabilities  for
potential litigation settlements.  Estimates for losses from litigation are made
after  consultation  with outside  counsel.  If  estimates  of potential  losses
increase  or the  related  facts and  circumstances  change in the  future,  the
Partnership may be required to record additional litigation expense.

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

For the three months ended March 31, 2002, the Partnership  generated  operating
cash  of  $2.4  million  (net  cash  provided  by  operating   activities   plus
non-liquidating distributions from USPEs) to meet its operating obligations, pay
debt and interest payments and maintain working capital reserves.

During the three months ended March 31, 2002, the Partnership disposed of marine
containers for proceeds of $9,000.

Restricted  cash  increased  during the three months ended March 31, 2002 due to
the deposit of $0.2 million into an escrow account related to collection efforts
from an aircraft lessee.

Accounts  receivable  increased $0.3 million during the three months ended March
31, 2002. The increase was due to the accrual of a $0.1 million  receivable from
the purchasing agent resulting from  Partnership  units that cannot be purchased
and by a increase of $0.2 million due to the timing of cash receipts.

Investments in USPEs  decreased $0.4 million during the three months ended March
31,  2002  due to cash  distributions  of $0.4  million  from  the  USPEs to the
Partnership.

Accounts payable  decreased $0.6 million during the three months ended March 31,
2002.  The decrease was due to the payment of $0.8 million due to the purchasing
agent that was  accrued at  December  31, 2001  resulting  from the  purchase of
Partnership  units.  This  decrease was offset,  in part, by the accrual of $0.3
million in interest  expense due to the lender of the notes payable that is paid
semi-annually.

During the three months ended March 31,  2002,  lessee  deposits and reserve for
repairs  increased  $0.1  million due to an increase in the reserve for a marine
vessel dry docking.

The  Partnership  is scheduled to make an annual debt payment of $3.0 million to
the lenders of the notes payable on December 31, 2002. The cash for this payment
will come from operations and proceeds from equipment dispositions.

In April  2002,  PLM  International,  Inc.  (PLMI)  extended  the $10.0  million
warehouse  facility,  which is shared by the  Partnership,  PLM Equipment Growth
Fund V, PLM Equipment Growth Fund VI, and Professional  Lease Management  Income
Fund I, LLC and  Acquisub  LLC, a wholly owned  subsidiary  of PLMI which is the
parent  company of PLM  Financial  Services,  Inc..  The  facility  provides for
financing up to 100% of the cost of the equipment. Outstanding borrowings by one
borrower  reduce the amount  available to each of the other  borrowers under the
facility.  Individual  borrowings may be outstanding  for no more than 270 days,
with all advances due no later than July 11, 2002.  Interest  accrues  either at
the prime  rate or LIBOR  plus 2.0% at the  borrower's  option and is set at the
time of an advance of funds.  Borrowings by the  Partnership  are  guaranteed by
PLMI.  The  Partnership  is not  liable  for  the  advances  made  to the  other
borrowers.  This  facility  expires on July 11,  2002.  The  General  Partner is
currently in the process of renewing the warehouse facility.




<PAGE>


(IV) OUTLOOK FOR THE FUTURE

Several factors may affect the Partnership's  operating  performance  during the
remainder  of  2002  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.

Other factors affecting the Partnership's  contribution  during the remainder of
2002 and beyond include:

(1) The cost of new marine  containers  have been at historic  lows for the past
several  years  which has caused  downward  pressure on per diem lease rates for
this type of equipment;

(2) Railcar  loadings in North  America for the first quarter of 2002 were below
those of 2001. This decrease has led to lower utilization and lower contribution
to the Partnership as existing leases expire and renewal leases are negotiated;

(3) Marine vessel freight rates are dependent upon the overall condition of the
international economy. Freight rates earned by the Partnership's marine vessel
began to decrease during the later half of 2001. This trend is expected to
continue during the first half of 2002;

(4) Industry wide utilization of inter-modal  trailers decreased 8% in the first
quarter of 2002  compared to the first  quarter of 2001.  This may lead to lower
utilization of the Partnership's trailers as existing leases expire; and

(5) The airline  industry began to see lower  passenger  travel during 2001. The
tragic events on September 11, 2001 worsened the situation.  As a result of this
and general  uncertainty in the airline  industry,  the  Partnership  has had to
renegotiate  leases  on its owned  aircraft  during  2001 that will  result in a
decrease in revenues  during 2002.  During 2001, the lessee of a Stage II Boeing
737-200  commercial  aircraft  notified the General  Partner of its intention to
return this  aircraft.  As of March 31, 2002,  the lessee has not remitted seven
lease payments due to the  Partnership.  The Partnership has a security  deposit
from this lessee  that could be used to pay a portion of the amount due.  During
October 2001, the General  Partner sent a notification of default to the lessee.
The lease, with an expiration date of October 2002, has certain return condition
requirements  for each aircraft.  The General  Partner has recorded an allowance
for bad debts for the amount due less the security deposit.

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  may reinvest its cash flow,  surplus cash,  and equipment sale
proceeds  in  additional  equipment,  consistent  with  the  objectives  of  the
Partnership,  until December 31, 2004. The General  Partner  believes that these
acquisitions may cause the Partnership to generate  additional earnings and cash
flow for the Partnership.  Surplus funds, if any, less reasonable reserves,  may
be distributed to the partners.  The Partnership  will terminate on December 31,
2013, unless terminated  earlier upon sale of all equipment and by certain other
events.

(V) FORWARD-LOOKING INFORMATION

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


<PAGE>



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,  2002,  84% of the  Partnership's
total lease  revenues  from  wholly-  and  partially-owned  equipment  came from
non-United States domiciled  lessees.  Most of the Partnership's  leases require
payment in United States (US)  currency.  If these  lessees'  currency  devalues
against the US dollar,  the lessees could  potentially  encounter  difficulty in
making the US dollar denominated lease payments.


















                      (This space intentionally left blank)


<PAGE>



                          PART II -- OTHER INFORMATION


ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

           (a)    Exhibits

           10.1     Second amendment to the Warehouse Credit Agreement, dated
                    April 12, 2002.

           (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:  May 7, 2002         By:   /s/ Stephen M. Bess
                                 -------------------
                                 Stephen M. Bess
                                 President and Current Chief Accounting Officer