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




     [X]  QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15(D) OF THE  SECURITIES
          EXCHANGE ACT OF 1934 FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 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 0-26594
                             -----------------------




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


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

            One Market, Steuart Street Tower
              Suite 800, San Francisco, CA                 94105-1301
                  (Address of principal                    (Zip code)
                   executive offices)


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


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








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



                                                                             September 30,        December 31,
                                                                                1999                1998
                                                                           -----------------------------------
  ASSETS

  <S>                                                                      <C>                  <C>
  Equipment held for operating lease, at cost                              $       65,435       $       69,682
  Less accumulated depreciation                                                   (34,910)             (35,000)
                                                                           --------------------------------------
                                                                                   30,525               34,682
  Equipment held for sale                                                           1,802                   --
                                                                           --------------------------------------
    Net equipment                                                                  32,327               34,682

  Cash and cash equivalents                                                         6,633                  404
  Restricted cash                                                                     200                  219
  Accounts receivable, less allowance for doubtful accounts
      of $1,135 in 1999 and $251 in 1998                                              881                1,130
  Investments in unconsolidated special-purpose entities                           30,859               35,452
  Deferred charges, net of accumulated amortization
      of $275 in 1999 and $215 in 1998                                                227                  214
  Prepaid expenses and other assets                                                     5                   73
                                                                           --------------------------------------

        Total assets                                                       $       71,132       $       72,174
                                                                           ======================================

  Liabilities and partners' capital

  Liabilities:
  Accounts payable and accrued expenses                                    $          666       $          388
  Due to affiliates                                                                   510                1,282
  Lessee deposits and reserve for repairs                                           1,442                1,257
  Notes payable                                                                    23,000               23,000
                                                                           --------------------------------------
    Total liabilities                                                              25,618               25,927

  Partners' capital:
  Limited partners (5,323,819 limited partnership units as of
      September 30, 1999 and 5,334,211 as of December 31, 1998)                    45,514               46,247
  General Partner                                                                      --                   --
                                                                           --------------------------------------
    Total partners' capital                                                        45,514               46,247
                                                                           --------------------------------------

        Total liabilities and partners' capital                            $       71,132       $       72,174
                                                                           ======================================

</TABLE>







                 See accompanying notes to financial statements.




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

                                                       For the Three Months               For the Nine Months
                                                       Ended September 30,                Ended September 30,
                                                       1999           1998               1999            1998
                                                    --------------------------------------------------------------
  REVENUES

  <S>                                               <C>            <C>              <C>             <C>
  Lease revenue                                     $   3,944      $   3,800        $   12,419      $    10,424
  Interest and other income                                35            145                94             285
  Net gain on disposition of equipment                    153              3               157              35
                                                    --------------------------------------------------------------
      Total revenues                                    4,132          3,948            12,670          10,744
                                                    --------------------------------------------------------------

  EXPENSES

  Depreciation and amortization                         1,746          1,841             5,269           5,685
  Repairs and maintenance                                 969            642             1,995           1,477
  Equipment operating expense                             385            409             1,238             515
  Insurance expense                                        13            130               181             191
  Management fees to affiliate                            211            212               632             588
  Interest expense                                        427            427             1,263           1,259
  General and administrative expenses
        to affiliates                                     146            166               503             517
  Other general and administrative expenses               122            100               402             367
  Provision for (recovery of) bad debts                   182            (42)              897               1
                                                    --------------------------------------------------------------
      Total expenses                                    4,201          3,885            12,380          10,600
                                                    --------------------------------------------------------------

  Equity in net income (loss) of unconsolidated
        special-purpose entities                         (864)          (848)            6,673           6,922
                                                    --------------------------------------------------------------

  Net income (loss)                                 $    (933)    $     (785)       $    6,963      $    7,066
                                                    ==============================================================

  PARTNERS' SHARE OF NET INCOME (LOSS)

  Limited partners                                  $  (1,059)    $     (912)       $    6,585      $     6,686
  General partner                                         126            127               378              380
                                                    --------------------------------------------------------------

  Total                                             $    (933)    $     (785)       $    6,963      $     7,066
                                                    ==============================================================
  Net income (loss) per weighted-average
        limited partnership unit                    $   (0.20)    $    (0.17)       $     1.24      $      1.25
                                                    ==============================================================
  Cash distributions                                $   2,522      $   2,529        $    7,571      $     7,600
                                                    ==============================================================
  Cash distributions per weighted-average
        limited partnership unit                    $    0.45      $    0.45        $     1.35      $      1.35
                                                    ==============================================================





</TABLE>




                 See accompanying notes to financial statements.

                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                            ( A LIMITED PARTNERSHIP)
                 STATEMENTS OF CHANGES IN PARTNERS' CAPITAL FOR
             THE PERIOD FROM DECEMBER 31, 1997 TO SEPTEMBER 30, 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

  Purchase 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                                                    6,585                378                  6,963

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

  Cash distribution                                            (7,193)              (378)                (7,571)
                                                           -------------------------------------------------------

    Partners' capital as of September 30, 1999             $   45,514            $    --             $   45,514
                                                           =======================================================

</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 Nine Months
                                                                                       Ended September 30,
                                                                                    1999            1998
                                                                                 ------------------------------

  OPERATING ACTIVITIES

 <S>                                                                             <C>             <C>
 Net income                                                                      $    6,963      $    7,066
 Adjustments to reconcile net income
       to net cash provided by (used in) operating activities:
   Depreciation and amortization                                                      5,269           5,685
   Net gain on disposition of equipment                                                (157)            (35)
   Equity in net income from unconsolidated special-purpose entities                 (6,673)         (6,922)
   Changes in operating assets and liabilities:
     Restricted cash                                                                   (200)             (6)
     Accounts receivable, net                                                           249            (204)
     Prepaid expenses and other assets                                                   68              (3)
     Accounts payable and accrued expenses                                              278             344
     Due to affiliates                                                                  199             100
     Lessee deposits and reserve for repairs                                            185            (199)
                                                                                 -----------------------------
       Net cash provided by operating activities                                      6,181           5,826
                                                                                 -----------------------------

 INVESTING ACTIVITIES

 Payments for purchase of equipment and capitalized improvements                     (7,624)         (3,466)
 Investment in and equipment purchased and placed in
     unconsolidated special-purpose entities                                         (9,439)        (22,261)
 Distributions from unconsolidated special-purpose entities                           4,098           8,295
 Distributions from liquidation of unconsolidated special-purpose entities           15,855          14,802
 Payments of acquisition fees to affiliate                                             (322)           (155)
 Payments of lease negotiation fees to affiliate                                        (72)            (34)
 Proceeds from disposition of equipment                                               5,248             289
                                                                                 ----------------------------
       Net cash provided by (used in) investing activities                            7,744          (2,530)
                                                                                 ----------------------------


 FINANCING ACTIVITIES

 Payments due to affiliates                                                              --          (5,092)
 Cash received from affiliates                                                           --           1,510
 Cash distribution paid to limited partners                                          (7,193)         (7,220)
 Cash distribution paid to General Partner                                             (378)           (380)
 Purchase of limited partnership units                                                 (125)           (512)
                                                                                 -----------------------------
       Net cash used in financing activities                                         (7,696)        (11,694)
                                                                                 -----------------------------

 Net increase (decrease) in cash and cash equivalents                                 6,229          (8,398)
 Cash and cash equivalents at beginning of period                                       404           9,327
                                                                                  ----------------------------
 Cash and cash equivalents at end of period                                      $    6,633      $      929
                                                                                 =============================

 SUPPLEMENTAL INFORMATION

 Interest paid                                                                   $      836      $      869
                                                                                 =============================
</TABLE>





                 See accompanying notes to financial statements.


<PAGE>


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 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 September 30, 1999 and December 31, 1998, the statements
of operations  for the three and nine months ended  September 30, 1999 and 1998,
the statements of changes in partners'  capital for the period from December 31,
1997 to September 30, 1999, and the statements of cash flows for the nine months
ended  September 30, 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 for the year ended  December 31, 1998, on file at the
Securities and Exchange Commission.

2.   Schedule of Partnership Phases

The Partnership is currently  operating  within the first six years of operation
in which the General  Partner intends to reinvest a portion of cash flow and net
disposition  proceeds in additional  equipment.  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 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.   Purchase of Limited Partnership Units

In 1998,  the  Partnership  agreed  to  purchase  approximately  60,800  limited
partnership units in 1999 for an aggregate purchase price of up to $0.8 million.
During the nine months ended  September 30, 1999, the  Partnership had purchased
10,392  limited  partnership  units for $0.1  million.  The General  Partner may
purchase additional units in the future.

4.   Cash Distributions

Cash  distributions  are recorded when paid and may include amounts in excess of
net income that are considered to represent a return of capital. For each of the
three and nine months  ended  September  30, 1999 and 1998,  cash  distributions
totaled $2.5 million and $7.6 million,  respectively.  Cash distributions to the
limited  partners of $0.6 million and $0.5 million  during the nine months ended
September  30,  1999 and  1998,  respectively,  were  deemed  to be a return  of
capital.

Cash  distributions  related to the results from the third  quarter of 1999,  of
$1.4 million, will be paid during the fourth quarter of 1999.

5.   Transactions with General Partner and Affiliates

The balance due to affiliates as of September 30, 1999 included $0.1 million due
to FSI and its affiliates for management fees and $0.4 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.

During the nine months ended September 30, 1999, $1.0 million in engine reserves
and  security  deposits  were paid to an  affiliated  USPE and the amount due to
another affiliated USPE increased $0.2 million.



<PAGE>


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999

5.       Transactions with General Partner and Affiliates (continued)

The Partnership's  proportional share of USPE-affiliated management fees of $0.1
million was payable as of September 30, 1999 and December 31, 1998.

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):
<TABLE>
<CAPTION>

                                                       For the Three Months               For the Nine Months
                                                       Ended September 30,                Ended September 30,
                                                       1999           1998               1999           1998
                                                    --------------------------------------------------------------
  <S>                                               <C>            <C>                <C>              <C>
  Management fees                                   $      87      $     112          $    270         $    333
  Data processing and administrative
     expenses                                              23             30                79              102
  Insurance expense                                        --              3                --               18
</TABLE>


Transportation  Equipment  Indemnity Company,  Ltd., 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 $0.8 million and $1.4 million for equipment
acquisition  and lease  negotiation  fees during the nine months ended September
30, 1999 and 1998, respectively.

6.   Equipment

Owned equipment held for operating  lease is stated at cost.  Equipment held for
sale is stated at the lower of the equipment's  depreciated  cost or fair value,
less cost to sell, and is subject to a pending contract for sale. The components
of owned equipment were as follows (in thousands of dollars):

                                              September 30,         December 31,
                                                   1999                1998
                                               ---------------------------------

  Marine vessels                               $   22,212          $    22,212
  Trailers                                         16,976               17,280
  Railcars                                          9,677               10,084
  Aircraft                                          9,297               15,933
  Marine containers                                 7,273                   --
  Portable heaters                                     --                4,085
  Modular buildings                                    --                   88
                                               -----------         ------------
                                                   65,435               69,682
  Less accumulated depreciation                   (34,910)             (35,000)
                                               -----------         ------------
                                                   30,525               34,682
  Equipment held for sale                           1,802                   --
                                               -----------         ------------
      Net equipment                            $   32,327          $    34,682
                                               ===========         ============

As of  September  30, 1999 and 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 $3.3 million as of
September 30, 1999 and December 31, 1998.  As of September 30, 1999,  one of the
two commuter aircraft that are off-lease, is held for sale.

During the nine months ended  September 30, 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.


<PAGE>


                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999

6.   Equipment (continued)

During the nine months ended September 30, 1999, the Partnership  disposed of or
sold commercial aircraft,  portable heaters,  trailers,  modular buildings,  and
railcars  with an  aggregate  net book value of $5.1  million for $5.2  million.
During the nine months ended September 30, 1998, the Partnership  disposed of or
sold trailers and a railcar with an aggregate net book value of $0.2 million for
$0.3 million.

7.   Investments in Unconsolidated Special-Purpose Entities

The net investments in USPEs include the following  jointly-owned equipment (and
related assets and liabilities) (in thousands of dollars):
<TABLE>
<CAPTION>

                                                                                                   September 30,     December 31,
                                                                                                        1999             1998
                                                                                                    ------------------------------

                    <S>                                                                             <C>              <C>
                    38% interest in a trust owning a Boeing 737-300 Stage III commercial
                              aircraft                                                              $    8,350       $       --
                    75% interest in an entity owning marine containers                                   6,623            7,426
                    50% interest in a trust owning a MD-82 Stage III commercial aircraft                 5,499            6,804
                    80% interest in an entity owning a dry bulk-carrier marine vessel                    4,538            5,209
                    50% interest in a trust owning a MD-82 Stage III commercial aircraft                 2,267            3,546
                    44% interest in an entity owning a dry bulk-carrier marine vessel                    1,987            2,211
                    10% interest in an entity owning a mobile offshore drilling unit                     1,274            1,450
                    50%  interest  in a trust that owned  four  Boeing  737-200A
                              Stage II commercial aircraft                                                 145              222
                    24% interest in a trust that owned a Boeing 767-200ER Stage III
                              commercial aircraft                                                           81            4,341
                    25% interest in a trust that owned four Boeing 737-200A Stage II
                              commercial aircraft                                                           95              141
                    33% interest in two trusts that owned a total of three Boeing 737-200A
                              Stage II commercial aircraft, two stage II aircraft engines, and
                              a portfolio of aircraft rotables                                              --            4,102
                                                                                                    ------------------------------

                        Net investments                                                             $   30,859       $   35,452
                                                                                                    ==============================
</TABLE>


As of September 30, 1999, all jointly-owned  equipment in the Partnership's USPE
portfolio was on lease except for a Boeing  737-300  commercial  aircraft with a
net investment value of $8.3 million. As of December 31, 1998, all jointly-owned
equipment in the Partnership's USPE portfolio was on lease.

During the nine months ended  September 30, 1999,  the General  Partner sold the
Partnership's  33%  interest  in two trusts  that owned a total of three  Boeing
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.  The
General Partner also sold the  Partnership's  24% interest in a Boeing 767-200ER
Stage III commercial aircraft. The Partnership's interest in this trust was sold
for  proceeds of $9.6  million  which  includes  $0.7  million of unused  engine
reserves for its net investment of $3.8 million.

During the nine months ended  September 30, 1999, the  Partnership  purchased an
interest in a trust owning a Boeing  737-300 Stage III  commercial  aircraft for
$9.0 million and increased its investment in a trust owning marine containers by
$0.5 million  including  acquisition and lease  negotiation fees of $0.4 million
that were  paid to FSI for the  purchase  of these  investments.  The  remaining
interest in these trusts were purchased by an affiliated program.




                     PLM EQUIPMENT GROWTH & INCOME FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999

7.   Investments in Unconsolidated Special-Purpose Entities (continued)

The General  Partner has amended the  corporate-by-laws  of all  investments  in
USPE's in which the Partnership or any affiliated  program owns an interest that
is greater than 50%. The  amendment to the by-laws  provides  that all decisions
regarding the  acquisition  and  disposition  of the investment as well as other
significant  business  decisions of that investment would be permitted only upon
unanimous  consent of the Partnership and all the affiliated  programs that have
an ownership in the investment regardless of the percentage of ownership.

8.   Operating Segments

The Partnership operates or operated 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 for the three
and nine months ended September 30, 1999 and 1998 (in thousands of dollars):
<TABLE>
<CAPTION>

                                            Marine                                    Marine
     For the Three Months Ended             Vessel   Trailer    Aircraft  Railcar    Container
           September 30, 1999              Leasing   Leasing    Leasing   Leasing    Leasing   All          Total
                                                                                               Other<F1>1
     ----------------------------------    --------- ---------  --------- ---------  --------- ---------  -----------

     REVENUES
       <S>                                 <C>       <C>        <C>       <C>        <C>       <C>        <C>
       Lease revenue                       $  1,467  $  1,052   $    271  $    663   $    376  $    115   $  3,944
       Interest income and other                 --        --         --        --         --        35         35
       Gain (loss) on disposition of             --        14         --        (1)        --       140        153
     equipment
                                           ------------------------------------------------------------------------
         Total revenues                       1,467     1,066        271       662        376       290      4,132

     Costs and expenses
       Operations support                       502       234        486       135         --        10      1,367
       Depreciation and amortization            409       388        344       183        309       113      1,746
       Interest expense                          --        --         --        --         --       427        427
       Management fees to affiliate              73        52         17        46         19         4        211
       General and administrative expenses        6       105         13        14         --       130        268
       Provision for bad debts                   --        76         --        15         --        91        182
                                           ------------------------------------------------------------------------
         Total costs and expenses               990       855        860       393        328       775      4,201
                                           ------------------------------------------------------------------------
     Equity in net income (loss) of USPEs      (104)      --        (813)       --          6        47       (864)
                                           ------------------------------------------------------------------------
     Net income (loss)                     $    373  $    211   $ (1,402) $    269   $     54  $   (438)  $   (933)
                                           ========================================================================

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








                      (This space intentionally left blank)






<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 and expenses such as operations
support,   depreciation  and   amortization,   management   fees,   general  and
administrative   expenses  from  portable  heaters  and  modular  buildings  and
aggregate  net income  (loss) from an  investment  in an entity  owning a mobile
offshore drilling unit.
</FN>
</TABLE>

<PAGE>


                          PLM EQUIPMENT GROWTH FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999

8.   Operating Segments (continued)
<TABLE>
<CAPTION>


                                            Marine
     For the Three Months Ended             Vessel   Trailer    Aircraft  Railcar
           September 30, 1998              Leasing   Leasing    Leasing   Leasing     All         Total
                                                                                      Other<F1>1
     ----------------------------------    --------- ---------  --------- ---------  --------- -----------

     REVENUES
       <S>                                 <C>       <C>        <C>       <C>        <C>       <C>
       Lease revenue                       $  1,210  $  1,167   $    505  $    670   $    248  $  3,800
       Interest income and other                 --        --         --        --        145       145
       Gain on disposition of equipment          --         3         --        --         --         3
                                           -------------------------------------------------------------
         Total revenues                       1,210     1,170        505       670        393     3,948

     COSTS AND EXPENSES
       Operations support                       601       203        142       222         13     1,181
       Depreciation and amortization            491       481        503       218        148     1,841
       Interest expense                          --        --         --        --        427       427
       Management fees to affiliate              60        70         25        49          8       212
       General and administrative expenses       13       124         16        15         98       266
       Provision for (recovery of) bad           --       (20)        --       (30)        8        (42)
     debts
                                           -------------------------------------------------------------
         Total costs and expenses             1,165       858        686       474        702     3,885
                                           -------------------------------------------------------------
     Equity in net loss of USPEs                 (4)       --       (806)       --        (38)     (848)
                                           --------------------------------------------------------------
     Net income (loss)                     $     41  $    312   $   (987) $    196   $   (347) $   (785)
                                           ==============================================================
Total assets as of September 30, 1998      $ 18,065  $ 10,085   $ 27,654  $  5,851   $ 14,431  $ 76,086
                                           ==============================================================


                                            Marine                                    Marine
     For the Nine Months Ended              Vessel   Trailer    Aircraft  Railcar    Container
           September 30, 1999              Leasing   Leasing    Leasing   Leasing    Leasing    All          Total
                                                                                                Other<F1>1
     ----------------------------------    --------- ---------  --------- ---------  --------- ---------  -----------

     Revenues
       Lease revenue                       $  4,571  $  3,084   $  1,246  $  2,003   $    776  $    739   $ 12,419
       Interest income and other                 --        --         --        --         --        94         94
       Gain (loss) on disposition of             --        22          2       (31 )       --       164        157
     equipment
                                           ------------------------------------------------------------------------
         Total revenues                       4,571     3,106      1,248     1,972        776       997     12,670

     Costs and expenses
       Operations support                     1,772       686        496       428         --        32      3,414
       Depreciation and amortization          1,227     1,178      1,034       554        822       454      5,269
       Interest expense                          --        --         --        --         --     1,263      1,263
       Management fees to affiliate             229       160         62       141         39         1        632
       General and administrative expenses       34       358         34        41         --       438        905
       Provision for bad debts                   --       170         --         6         --       721        897
                                           ------------------------------------------------------------------------
         Total costs and expenses             3,262     2,552      1,626     1,170        861     2,909     12,380
                                           ------------------------------------------------------------------------
     Equity in net income (loss) of USPEs      (486 )      --      7,011        --          4       144      6,673
                                           ------------------------------------------------------------------------
                                           ========================================================================
     Net income (loss)                     $    823  $    554   $  6,633  $    802   $    (81) $ (1,768)  $  6,963
                                           ========================================================================

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




<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 and expenses such as operations
support,   depreciation  and   amortization,   management   fees,   general  and
administrative   expenses  from  portable  heaters  and  modular  buildings  and
aggregate  net income  (loss) from an  investment  in an entity  owning a mobile
offshore drilling unit.

</FN>

</TABLE>

<PAGE>


                          PLM EQUIPMENT GROWTH FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999

8.   Operating Segments (continued)
<TABLE>
<CAPTION>


                                            Marine
     For the Nine Months Ended              Vessel   Trailer    Aircraft  Railcar
           September 30, 1998              Leasing   Leasing    Leasing   Leasing     All         Total
                                                                                      Other<F1>1
     ----------------------------------    --------- ---------  --------- ---------  --------- -----------

     REVENUES
       <S>                                 <C>       <C>        <C>       <C>        <C>       <C>
       Lease revenue                       $  2,797  $  3,537   $  1,516  $  2,051   $    523  $ 10,424
       Interest income and other                 --        --         --        --        285       285
       Gain on disposition of equipment          --        26         --         9         --        35
                                           -------------------------------------------------------------
         Total revenues                       2,797     3,563      1,516     2,060        808    10,744

     COSTS AND EXPENSES
       Operations support                       741       607        261       540         34     2,183
       Depreciation and amortization          1,473     1,462      1,709       652        389     5,685
       Interest expense                          --        --         --        --      1,259     1,259
       Management fees to affiliate             140       205         76       145         22       588
       General and administrative expenses       43       373         58        49        361       884
       Provision for (recovery of) bad           --        29          2       (28)        (2)        1
     debts
                                           -------------------------------------------------------------
         Total costs and expenses             2,397     2,676      2,106     1,358      2,063    10,600
                                           -------------------------------------------------------------
     Equity in net income (loss) of USPEs      (251)       --      7,174        --         (1)    6,922
                                           -------------------------------------------------------------
     Net income (loss)                     $    149  $    887   $  6,584  $    702   $ (1,256 )$  7,066
                                           =============================================================

     Total assets as of September 30, 1998 $ 18,065  $ 10,085   $ 27,654  $  5,851   $ 14,431  $ 76,086
                                           =============================================================
<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 and expenses such as operations
support,   depreciation  and   amortization,   management   fees,   general  and
administrative   expenses  from  portable  heaters  and  modular  buildings  and
aggregate  net income  (loss) from an  investment  in an entity  owning a mobile
offshore drilling unit.
</FN>
</TABLE>

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.  The  Partnership  had  no  borrowings
outstanding  under the Committed Bridge Facility as of September 30, 1999. Among
the other  eligible  borrowers,  PLM Equipment  Growth Fund VI had borrowings of
$1.0 million and TEC Acquisub,  Inc., an indirect wholly-owned subsidiary of PLM
International,  Inc., had borrowings of $7.6 million under the Committed  Bridge
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.

10.  Net Income (Loss) Per Weighted-Average Partnership Unit

Net income (loss) per weighted-average Partnership unit was computed by dividing
net income  (loss)  attributable  to limited  partners  by the  weighted-average
number  of  Partnership  units  deemed   outstanding   during  the  period.  The
weighted-average number of Partnership units deemed outstanding during the three
and  nine  months  ended   September  30,  1999  was  5,324,262  and  5,326,951,
respectively.   The   weighted-average   number  of  Partnership   units  deemed
outstanding  during  the three and nine  months  ended  September  30,  1998 was
5,334,211 and 5,343,769, respectively.



                          PLM EQUIPMENT GROWTH FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999

11.  Contingencies

PLM   International   Inc.,  (The  Company)  and  various  of  its  wholly-owned
subsidiaries  are named as defendants  in a lawsuit  filed as a purported  class
action in January 1997 in the Circuit Court of Mobile County,  Mobile,  Alabama,
Case No.  CV-97-251  (the Koch action).  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 for which
the Company's wholly-owned subsidiary,  PLM Financial Services, Inc. (FSI), acts
as the general  partner,  including PLM Equipment  Growth Fund IV (Fund IV), PLM
Equipment  Growth Fund V (Fund V), PLM  Equipment  Growth Fund VI (Fund VI), and
PLM  Equipment  Growth & Income Fund VII (Fund VII) (the Funds).  The  complaint
asserts eight causes of action  against all  defendants,  as follows:  fraud and
deceit,  suppression,   negligent   misrepresentation,   intentional  breach  of
fiduciary  duty,   negligent  breach  of  fiduciary  duty,  unjust   enrichment,
conversion,   and  conspiracy.   Plaintiffs  allege  that  each  defendant  owed
plaintiffs  and the class  certain  duties due to their  status as  fiduciaries,
financial  advisors,  agents,  and  control  persons.  Based  on  these  duties,
plaintiffs assert liability against  defendants for improper sales and marketing
practices,  mismanagement of the Funds, and concealing such  mismanagement  from
investors in the Funds.  Plaintiffs seek unspecified  compensatory 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)  (the  court)  based on the  court's
diversity jurisdiction, and the court denied plaintiffs' motion to remand, which
denial was upheld on appeal.  In December  1997,  the court  granted  defendants
motion  to  compel  arbitration  of the named  plaintiffs'  claims,  based on an
agreement to arbitrate  contained in the limited  partnership  agreement of each
Partnership.  Plaintiffs  appealed this decision,  but in June 1998  voluntarily
dismissed  their appeal  pending  settlement  of the Koch  action,  as discussed
below.

In June 1997, the Company and the affiliates who are also defendants in the Koch
action were named as defendants in another  purported  class action filed in the
San Francisco  Superior Court, San Francisco,  California,  Case No. 987062 (the
Romei  action).  The plaintiff is an investor in Fund V, and filed the complaint
on her own  behalf and on behalf of all class  members  similarly  situated  who
invested in certain  California  limited  partnerships for which FSI acts as the
general partner,  including the Funds. The complaint (as amended in August 1997)
alleges the same facts and the same causes of action as in the Koch action, plus
additional  causes of action against all of the  defendants,  including  alleged
unfair and deceptive  practices and constructive  fraud. The plaintiff asserts a
claim for treble  damages and  violations of the  California  Securities  Law of
1968.

In July 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 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 May 1998, all parties to the Koch and Romei actions entered into a memorandum
of  understanding  related to the  settlement  of those  actions  (the  monetary
settlement),  following  which the  parties  agreed to an  additional  equitable
settlement (the equitable settlement).  The terms of the monetary settlement and
the equitable  settlement are contained in a Stipulation of Settlement  that was
filed with the court.  The monetary  settlement  provides  for a settlement  and
release of all claims against defendants in exchange for payment for the benefit
of the class of up to $6.0 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

                          PLM EQUIPMENT GROWTH FUND VII
                             (A LIMITED PARTNERSHIP)
                          NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1999

11.  Contingencies (continued)

awarded by the court.  The Company  will pay up to $0.3  million of the monetary
settlement,  with  the  remainder  being  funded  by an  insurance  policy.  The
equitable settlement provides,  among other things: (a) for the extension of the
operating  lives of Funds V, VI, and VII by judicial  amendment to each of their
partnership  agreements,  such  that  FSI,  the  general  partner  of each  such
partnership,  be permitted to reinvest partnership funds in additional equipment
into the year 2004,  and will  liquidate the Funds'  equipment in 2006; (b) that
FSI is  entitled  to  earn  front-end  fees  (including  acquisition  and  lease
negotiation fees) up to 20% in excess of the compensatory  limitations set forth
in the North  American  Securities  Administrator's  Association's  Statement of
Policy;  (c) for a one-time  purchase of up to 10% of the  outstanding  units of
Funds V, VI, and VII by the respective  partnership at 80% of such partnership's
net asset value;  and (d) for the deferral of a portion of FSI's management fees
until such time as certain performance thresholds have, if ever, been met by the
Funds. The equitable settlement also provides for payment of the equitable class
attorneys' fees from partnership funds in the event, if ever, that distributions
paid to  investors in Funds V, VI, and VII 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 monetary
and equitable settlements.

The court, among other things, preliminarily approved the monetary and equitable
settlements  in June 1999,  and set a final  fairness  hearing for  November 16,
1999.  For  settlement  purposes,  the monetary  settlement  class (the monetary
class) consists of all investors,  limited partners,  assignees, or unit holders
who  purchased  or received by way of  transfer or  assignment  any units in the
Funds  between May 23, 1989 and June 29, 1999.  The equitable  settlement  class
(the equitable class) consists of all investors,  limited partners, assignees or
unit  holders who on June 29,  1999 held any units in Funds V, VI, and VII,  and
their assigns and successors in interest.

The monetary settlement remains subject to certain conditions, including but not
limited to notice to the monetary class for purposes of the monetary  settlement
and final  approval of the monetary  settlement  by the court  following a final
fairness  hearing.   The  equitable   settlement  remains  subject  to  numerous
conditions, including but not limited to: (a) notice to the equitable class, (b)
review  and  clearance  by the 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 Funds V, VI, and VII
of the proposed amendments to the limited partnership  agreements,  (d) judicial
approval of the proposed amendments to the limited partnership  agreements,  and
(e) final  approval of the equitable  settlement by the court  following a final
fairness  hearing.  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  incidental  to its  business.  Management  does not believe that any of
these actions will be material to the financial condition of the Partnership.









                      (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 September 30, 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
remained  relatively the same during the three months ended  September 30, 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 these expenses are indirect in
nature and not a result of  operations,  but the result of owning a portfolio of
equipment.  The following  table presents lease revenues less direct expenses by
segment (in thousands of dollars):

                                            For the Three Months
                                             Ended September 30,
                                            1999             1998
                                         ----------------------------

  Marine vessels                         $    965          $   609
  Trailers                                    818              964
  Railcars                                    528              448
  Marine containers                           376               --
  Portable heaters                            122              237
  Modular buildings                            (7)              11
  Aircraft                                    (215)            363

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $1.5
million and $0.5 million, respectively, for the three months ended September 30,
1999, compared to $1.2 million and $0.6 million,  respectively,  during the same
period of 1998. Lease revenues  increased during the third quarter of 1999, when
compared  to the same period of 1998,  due to a change in the lease  arrangement
for one of the  Partnership's  marine  vessels.  During  two months of the third
quarter of 1998, one marine vessel  operated  under a bareboat  charter in which
the lessee pays a flat lease rate and also pays for certain  operating  expenses
while on lease.  During the third  quarter of 1999,  both of 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 lease revenues due to
this new lease  arrangement  and a decrease in  operating  expenses due to lower
insurance expense.

Trailers:  Trailer lease revenues and direct expenses were $1.1 million and $0.2
million,  respectively,  for the three months ended September 30, 1999, compared
to $1.2 million and $0.2 million, respectively,  during the same period of 1998.
Trailer  lease  revenues  decreased  $0.1 million  during the three months ended
September 30, 1999 primarily due to lower utilization revenues earned on certain
trailers.  Additionally,  equipment sales during the past 12 months caused lease
revenues to decrease $40,000 when compared to the same period of 1998.

Railcars:  Railcar lease revenues and direct expenses were $0.7 million and $0.1
million,  respectively,  for the three months ended September 30, 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  lower  direct
expenses  to  certain  railcars  in the  fleet  during  the three  months  ended
September 30, 1999 when compared to the same period of 1998.

Marine containers: Lease revenues and direct expenses for marine containers were
$0.4 million and $0,  respectively,  for the three months  ended  September  30,
1999. The increase in marine containers  contribution was due to the purchase of
this equipment in March 1999.

Portable  heaters:  Lease revenues and direct expenses for portable heaters were
$0.1 million and $0,  respectively,  for the three months  ended  September  30,
1999, compared to $0.2 million and $0,  respectively,  during the same period of
1998. The decrease in portable  heater  contribution  was due to the sale of all
this equipment during the three months ended September 30, 1999.

Aircraft: Aircraft lease revenues and direct expenses were $0.3 million and $0.5
million,  respectively,  for the three months ended September 30, 1999, compared
to $0.5 million and $0.1 million, respectively,  during the same period of 1998.
The  decrease in aircraft  lease  revenues  was due to the sale of a  commercial
aircraft  during the second  quarter of 1999.  Direct  expenses  increased  $0.4
million during the three months ended September 30, 1999 due to required repairs
to the off-lease commuter aircraft.

(B)  Indirect Expenses Related to Owned Equipment Operations

Total indirect expenses of $2.8 million for the three months ended September 30,
1999  increased  from $2.7  million  for the same  period  in 1998.  Significant
variances are explained as follows:

     (i) A $0.2  million  increase in the  provision  for bad debts based on the
General  Partner's   evaluation  of  the   collectability  of  receivables  due,
primarily, from a lessee that was leasing portable heaters.

     (ii)A $0.1 million decrease in depreciation and amortization  expenses from
1998 levels reflecting the double-declining balance method of depreciation which
results in greater depreciation in the first years an asset is owned.

(C)  Net Gain on Disposition of Owned Equipment

The net gain on  disposition  of equipment for the third quarter of 1999 totaled
$0.2 million, and resulted from the sale of trailers,  railcars,  and all of the
portable  heaters with an aggregate  net book value of $3.4 million for proceeds
of $3.6 million.  The net gain on disposition of equipment for the third quarter
of 1998  totaled  $3,000,  and  resulted  from  the  sale of a  trailer  with an
aggregate net book value of $3,000 for proceeds of $6,000.

(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):

                                                For the Three Months
                                                 Ended September 30,
                                               1999              1998
                                               ----------------------------

  Mobile offshore drilling unit                $     47         $     21
  Marine containers                                   6              (59)
  Marine vessels                                   (104)              (4)
  Aircraft, rotable components, and aircraft
    engines                                        (813)            (806)
                                               ----------------------------
    Equity in net loss of USPEs                $   (864)       $    (848)
                                               ============================

Mobile offshore  drilling unit: During the three months ended September 30, 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 primarily due to an increase in
lease  revenue of $19,000 due to  increased  lease  rates  during 1999 and lower
expenses  of $7,000  primarily  due to the  double  declining-balance  method of
depreciation  which results in greater  depreciation in the first years an asset
is owned.

Marine  containers:  As of September 30, 1999, the Partnership owned an interest
in an entity owning marine containers.  The Partnership  purchased this interest
during  September  1998.  During  the third  quarter of 1999,  revenues  of $0.4
million were offset by depreciation expense, direct expenses, and administrative
expenses of $0.3  million.  During the third  quarter of 1998,  revenues of $0.1
million were offset by depreciation expense, direct expenses, and administrative
expenses of $0.1 million.

Marine vessels: During the three months ended September 30, 1999, lease revenues
of $0.8  million  were offset by  depreciation  expense,  direct  expenses,  and
administrative  expenses of $0.9 million.  During the same period of 1998, lease
revenues of $0.9 million were offset by depreciation  expense,  direct expenses,
and administrative expenses of $0.9 million. The decrease in marine vessel lease
revenues  of $0.1  million  was due to lower  lease  rates  earned on the marine
vessels.  Although  expenses  remained  relatively the same, 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, of
$0.1 million was offset by higher operating expenses of $0.1 million.

Aircraft,  rotable  components,  and aircraft  engines:  During the three months
ended  September  30,  1999,  lease  revenues  of $0.5  million  were  offset by
depreciation  expense,  direct  expenses,  and  administrative  expenses of $1.3
million.  During the same period of 1998,  lease  revenues of $1.2  million were
offset by depreciation expense,  direct expenses, and administrative expenses of
$2.0  million.  Lease  revenues  decreased  $0.7  million due to the sale of the
Partnership's  investment  in a  trust  owning  a  Boeing  767-200ER  commercial
aircraft and the sale of the Partnership's investment in two trusts that owned a
total of three  Boeing  737-200A  Stage II  commercial  aircraft,  two  stage II
aircraft  engines,  and a portfolio  of  aircraft  rotables.  The  Partnership's
interest  in a trust  owning a Boeing  737 which was  purchased  in 1999 did not
generate any lease revenues since it was off-lease.  The decrease in expenses of
$0.7 million was  primarily  due to lower  depreciation  expense of $0.5 million
relating  to the sale of the  Partnership's  interest  in three  trusts and $0.5
million  as the result of the double  declining-balance  method of  depreciation
which  results  in  greater  depreciation  in the first  years an asset is owned
offset, in part, by an increase of $0.4 million in depreciation expense from the
Partnership's investment in an additional trust during 1999.

(E)  Net Loss

As a result of the foregoing,  the  Partnership had net loss of $0.9 million for
the three months ended September 30, 1999,  compared to net loss of $0.8 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 third quarter of 1999 is not necessarily  indicative of future  periods.  In
the third  quarter of 1999,  the  Partnership  distributed  $2.4  million to the
limited partners, or $0.45 per weighted-average limited partnership unit.

Comparison  of the  Partnership's  Operating  Results for the Nine Months  Ended
September 30, 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 nine months ended September 30, 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  these  expenses 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 Nine Months
                                         Ended September 30,
                                         1999             1998
                                      ----------------------------

  Marine vessels                      $  2,799         $  2,056
  Trailers                               2,398            2,930
  Railcars                               1,575            1,511
  Marine containers                        776               --
  Aircraft                                 750            1,255
  Portable heaters                         736              486
  Modular buildings                          3               37

Marine  vessels:  Marine  vessel lease  revenues and direct  expenses  were $4.6
million and $1.8 million,  respectively, for the nine months ended September 30,
1999, compared to $2.8 million and $0.7 million,  respectively,  during the same
period of 1998.  During  virtually  all of the nine months ended  September  30,
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 nine months ended  September 30, 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 lease revenues due to
this new lease arrangement exceeding the increase in operating expenses.

Trailers:  Trailer lease revenues and direct expenses were $3.1 million and $0.7
million, respectively, for the nine months ended September 30, 1999, compared to
$3.5  million and $0.6  million,  respectively,  during the same period of 1998.
Trailer  lease  revenues  decreased  $0.3  million  during the nine months ended
September 30, 1999  primarily due to lower  utilization  revenues  earned on the
Partnership's over-the-road dry trailers.  Additionally,  equipment sales during
the past 12 months  caused  lease  revenues to  decrease  $0.1  million.  Direct
expenses  increased $0.1 million during the nine months ended September 30, 1999
due to higher repair and  maintenance  expenses when compared to the same period
of 1998.

Railcars:  Railcar lease revenues and direct expenses were $2.0 million and $0.4
million, respectively, for the nine months ended September 30, 1999, compared to
$2.1 million and $0.5 million, respectively, during the same period of 1998. The
increase in rail  equipment  contribution  was due to lower  direct  expenses to
certain  railcars in the fleet during the nine months ended  September  30, 1999
when compared to the same period of 1998.

Marine containers: Lease revenues and direct expenses for marine containers were
$0.8 million and $0, respectively, for the nine months ended September 30, 1999.
The increase in marine  containers  contribution was due to the purchase of this
equipment in March 1999.

Aircraft: Aircraft lease revenues and direct expenses were $1.2 million and $0.5
million, respectively, for the nine months ended September 30, 1999, compared to
$1.5 million and $0.3 million, respectively, during the same period of 1998. The
decrease  in aircraft  contribution  was due to higher  repairs of $0.2  million
needed to the commuter  aircraft during 1999 when compared to the same period of
1998. In addition,  aircraft  lease  revenues were $0.3 million lower due to the
sale of three commercial aircraft in June 1999.

Portable heaters:  Portable heaters lease revenues and direct expenses were $0.7
million and $0,  respectively,  for the nine months  ended  September  30, 1999,
compared to $0.5 million and $0,  respectively,  during the same period of 1998.
The  increase  in  portable  heater  contribution  was  due to the  purchase  of
additional  equipment  during the latter  half of 1998 and the first  quarter of
1999. (See related discussion under indirect expenses.)

(B)  Indirect Expenses Related to Owned Equipment Operations

Total indirect  expenses of $9.0 million for the nine months ended September 30,
1999,  increased  from $8.4  million  for the same  period in 1998.  Significant
variances are explained as follows:

     (i) A $0.9 million  increase due to the increase in the  provision  for bad
debts  based  on the  General  Partner's  evaluation  of the  collectability  of
receivables due, primarily, from a lessee that was leasing portable heaters.

     (ii)A $0.4 million decrease in depreciation and amortization  expenses from
1998  levels  reflects  the  use  of  the  double-declining  balance  method  of
depreciation  which results in greater  depreciation in the first years an asset
is owned.

(C)  Net Gain on Disposition of Owned Equipment

The net gain on disposition of equipment for the nine months ended September 30,
1999 totaled $0.2 million,  and resulted  from the sale of commercial  aircraft,
portable heaters,  trailers,  modular buildings,  and railcars with an aggregate
net book value of $5.1  million for  proceeds of $5.2  million.  The net gain on
disposition  of equipment  for the nine months ended  September 30, 1998 totaled
$35,000,  and resulted from the sale of trailers and a railcar with an aggregate
net book value of $0.2 million for $0.3 million.


<PAGE>



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

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

                                                                               For the Nine Months
                                                                               Ended September 30,
                                                                             1999              1998
                                                                           ----------------------------

  <S>                                                                      <C>              <C>
  Aircraft, rotable components, and aircraft engines                       $  7,011         $  7,174
  Mobile offshore drilling unit                                                 144               58
  Marine containers                                                               4              (59)
  Marine vessels                                                               (486)             (25)
                                                                           --------------------------
    Equity in net income of USPEs                                          $  6,673         $  6,922
                                                                           ==========================
</TABLE>


Aircraft, rotable components, and aircraft engines: During the nine months ended
September 30, 1999, lease revenues of $2.0 million and the gain from the sale of
the  Partnership's  interest  in three  trusts of $8.9  million  were  offset by
depreciation  expense,  direct  expenses,  and  administrative  expenses of $3.9
million.  During the same period of 1998, lease revenues of $4.5 million and the
gain from the sale of the  Partnership's  interest in two trusts of $8.8 million
were  offset  by  depreciation  expense,  direct  expenses,  and  administrative
expenses of $6.1 million.  Lease revenues decreased $2.5 million due to the sale
of the  Partnership's  investment  in five  trusts  during  1999 and  1998.  The
decrease in lease revenues  caused by these sales was partially  offset by lease
revenues of $0.3  million  resulting  from the  Partnership's  investment  in an
additional trust during May 1998. The Partnership's purchase of an interest in a
trust owning a Boeing 737 during June 1999 did not  generate any lease  revenues
since it was off-lease.  The decrease in depreciation expense,  direct expenses,
and  administrative  expenses  of  $2.2  million  was  primarily  due  to  lower
depreciation expense resulting from the Partnership's sale of it's investment in
five  trusts  during  1999  and  1998,  partially  offset  by the  Partnership's
investment in an additional trust during 1999.

Mobile offshore  drilling unit: During the nine months ended September 30, 1999,
lease  revenues of $0.4  million  were offset by  depreciation  expense,  direct
expenses, and administrative expenses of $0.2 million. During the same period of
1998, lease revenues of $0.3 million were offset by depreciation expense, direct
expenses,  and  administrative  expenses of $0.2  million.  The  increase in the
contribution  from this  equipment  was the result of an increase in the monthly
lease rate and lower depreciation expense caused by the double-declining balance
method of depreciation.

Marine  containers:  As of September 30, 1999, the Partnership owned an interest
in an entity owning marine containers.  The Partnership  purchased this interest
during September 1998. During the nine months ended September 30, 1999, revenues
of $1.0  million  were offset by  depreciation  expense,  direct  expenses,  and
administrative  expenses  of $1.0  million.  During  the  same  period  of 1998,
revenues of $0.1 million were offset by depreciation  expense,  direct expenses,
and administrative expenses of $0.1 million.

Marine vessels:  During the nine months ended September 30, 1999, lease revenues
of $2.1  million  were offset by  depreciation  expense,  direct  expenses,  and
administrative  expenses of $2.6 million.  During the same period of 1998, lease
revenues of $2.6 million were offset by depreciation  expense,  direct expenses,
and  administrative  expenses of $2.9  million.  Marine  vessel  lease  revenues
decreased  during the nine months ended September 30, 1999, due to a lower lease
rate earned on the marine vessels. The decrease in expenses was primarily due to
lower  depreciation  expense caused by the use of the  double-declining  balance
method of depreciation and lower direct expenses.

(E)  Net Income

As a result of the foregoing, the Partnership had net income of $7.0 million for
the nine months ended September 30, 1999, compared to net income of $7.1 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 nine months ended September 30, 1999 is not necessarily indicative of future
periods.   In  the  nine  months  ended  September  30,  1999,  the  Partnership
distributed $7.2 million to the limited partners,  or $1.35 per weighted-average
limited partnership unit.

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

For the  nine  months  ended  September  30,  1999,  the  Partnership  generated
operating cash of $10.3 million (net cash provided by operating activities, plus
non-liquidating  distributions from USPEs) to meet its operating obligations and
maintain  the  current  level of  distributions  (total  for nine  months  ended
September 30, 1999 of approximately $7.6 million) to the partners.

During the nine  months  ended  September  30,  1999,  the  Partnership  sold or
disposed of owned  equipment  and  investments  in USPEs and received  aggregate
proceeds of $21.1 million which include $0.7 million of unused engine reserves.

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 PLM  Financial  Services,  Inc.  (FSI or the  General
Partner),  a  wholly-owned  subsidiary  of PLM  International,  Inc.,  for  this
equipment.  The  Partnership  also  purchased an  investment in a trust owning a
Boeing  737  Stage III  commercial  aircraft  for $8.6  million,  increased  its
investment  in a trust  owning  marine  containers  by $0.4  million,  and  paid
acquisition fees of $0.4 million to FSI for these investments.

Lessee  deposits and reserve for repairs  increased $0.2 million during the nine
months ended September 30, 1999 when compared to December 31, 1998. The increase
in lessee deposits and reserve for repairs was the result of additional reserves
needed for aircraft engine repair and marine vessel  dry-docking.  Additionally,
the Partnership  received security deposits from the buyer and a potential buyer
of two commuter aircraft, one of which is currently held for sale.

During the nine months ended  September 30, 1999,  due to  affiliates  decreased
$0.8 million of which $1.0 million was paid to an affiliated USPE and the amount
due to another  affiliated  USPE  increased  $0.2  million.  Of the $1.0 million
returned to the affiliated  USPE,  $0.7 million was unused engine  reserves that
were added to sales proceeds and $0.2 million in security  deposits were applied
against outstanding account receivables.

The General  Partner has entered into a short-term  joint $24.5  million  credit
facility.  As of October 28, 1999, TEC Acquisub,  Inc., an indirect wholly-owned
subsidiary of PLM International,  Inc., had borrowings of $0.9 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 those of 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 possibility commonly known as the "Year 2000" or "Y2K" problem.
As 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  business  systems  in order to
determine  whether  such systems will retain  functionality  after  December 31,
1999. As of September  30, 1999,  the General  Partner has completed  inventory,
assessment,  remediation  and testing stages of its Year 2000 review of its core
business  information  systems.   Specifically,  the  General  Partner  (a)  has
integrated 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
been made Year 2000  compliant.  In addition,  numerous other  software  systems
provided  by vendors and  service  providers  have been  replaced  with  systems
represented by the vendor or service provider to be Year 2000 functional.  These
systems have been tested and appear to be to be compliant.

As of September 30, 1999, the costs incurred and allocated to the Partnership to
become Year 2000 compliant  have not been material and the General  Partner does
not anticipate any additional Year 2000-compliant expenditures.

Some risks  associated  with the Year 2000 problem are beyond the ability of the
Partnership or 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
readiness of such parties and the extent to which the  Partnership is vulnerable
to any  third-party  Year 2000  issues.  As part of this  process,  vendors  and
service providers were ranked in terms of the relative importance of the service
or product  provided.  All service  providers and vendors who were identified as
medium to high relative  importance were surveyed to determine Year 2000 status.
The General Partner has received  satisfactory  responses to Year 2000 readiness
inquiries from surveyed service providers and vendors.

It is possible that certain of the  Partnership's  equipment lease portfolio may
not be  Year  2000  compliant.  The  General  Partner  has  contacted  equipment
manufacturers of the portion of the  Partnership's  leased  equipment  portfolio
identified  as date  sensitive  to assure  Year 2000  compliance  or to  develop
remediation  strategies.  The  Partnership  does not expect that  non-Year  2000
compliance  of its leased  equipment  portfolio  will have an  adverse  material
impact on its  financial  statements.  The  General  Partner  has  surveyed  the
majority of its  lessees  and the  majority  of those  surveyed  have  responded
satisfactorily to Year 2000 readiness inquiries.

There can be no  assurance  that the  software  systems of such  parties will be
converted or made Year 2000 compliant in a timely manner. 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 of the Partnership.  The General Partner has
made and will  continue an ongoing  effort to recognize  and evaluate  potential
exposure  relating to third party Year 2000  noncompliance.  The General Partner
will  implement  a  contingency  plan if the  General  Partner  determines  that
third-party   noncompliance   would  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,  vendors, or service providers due to Year 2000
problems.  For the purpose of such  contingency  planning,  a reasonably  likely
worst case scenarios primarily  anticipate a) an inability to access systems and
data on a temporary basis resulting in possible delay in reconciliation of funds
received or payment of monies owed,  or b) an inability to  continuously  employ
equipment  assets  due to  temporary  Year  2000  related  failure  of  external
infrastructure  necessary to the ongoing operation of the equipment. The General
Partner is evaluating  whether there are  additional  scenarios,  which have not
been  identified.  Contingency  planning  will  encompass  strategies  up to and
including  manual  processes.  The General Partner  anticipates that these plans
will be completed in the fourth quarter of 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 September  30,
1999, the General Partner is reviewing the effect this standard will have on the
Partnership's financial statements.

FASB Statement No. 137,  "Accounting for Derivatives,  Instruments,  and Hedging
Activities  - Deferral  of the  Effective  Date of FASB  Statement  No.  133, an
amendment of FASB Statement No. 133," issued in June 1999,  defers the effective
date of Statement No. 133.  Statement No. 133, as amended,  is now effective for
all fiscal  quarters of all fiscal years  beginning  after June 15, 2000.  As of
September  30, 1999,  the General  Partner is reviewing  the effect SFAS No. 133
will have on the Partnership's financial statements.


<PAGE>


(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 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.

Other  factors  affecting  the  Partnership's  contribution  in 1999 and  beyond
include:

1. The Partnership is experiencing difficulty in releasing or selling one of its
commuter aircraft.

2.  Depressed  economic  conditions in Asia have led to declining  freight rates
through  the early  part of 1999 for  drybulk  marine  vessels.  The  market has
stabilized  and is expected to improve over the next 2-3 years in the absence of
new additional orders.

3.  Railcar  loading  in North  America  have  continued  to be high,  however a
softening in the market is expected in the last quarter of 1999,  which may lead
to lower  utilization  and lower  contribution  to the  Partnership  as existing
leases expire and renewal leases are negotiated.

4. The  Partnership's  over-the-road dry trailers are currently in transition to
new  PLM-affiliated  short-term rental  facilities  specializing in this type of
trailer. The movement of these trailers to a new location will cause a temporary
reduction in lease revenues.

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

(VI)  FORWARD-LOOKING INFORMATION

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

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Partnership's  primary market risk exposure is that of currency  devaluation
risk.  During the nine months ended September 30, 1999, 60% 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 may 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.



















                      (This space intentionally left blank)



<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: October 28, 1999         By:      /s/ Richard K Brock
                                        -----------------------------------
                                        Richard K Brock
                                        Vice President and
                                        Corporate Controller