Form 10-QSB


[X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the Quarterly period ended   March 31, 1997

[  ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
         EXCHANGE ACT

         For the transition period from [     ]  to  [       ]


                       Commission file number  0-28764

                   (Exact name of small business issuer as
                          specified in its charter)

 Performance Asset Management Fund III, Ltd., a California Limited Partnership



              California                              33-0526128
     (State or other jurisdiction                   (IRS Employer
   of incorporation or organization)               Identification No.)

	
                   (Address of principal executive offices)
          4100 Newport Place, Suite 400, Newport Beach, California
	
                         (Issuer's telephone number)
                                (714) 261-2400

(Former name, former address and former fiscal year, if changed since last
report)  N/A


Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such report(s),
and (2) has been subject to such filing requirements for the past 90 days.

                                Yes [X]     No [ ]


              APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

                 PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by court.  Yes [ ]   No [ ].

                    APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:   [ N/A ]

Transitional Small Business Disclosure Format (check one):  Yes [ ] No [X]
<PAGE>




                 PERFORMANCE ASSET MANAGEMENT FUND III, LTD.,
                       A CALIFORNIA LIMITED PARTNERSHIP

                             INDEX TO FORM 10-QSB




                                   PART I


     Item 1. Financial Statements

     Item 2. Management's Discussion and Analysis or Plan of Operation



                                   PART II


     Item 1. Legal Proceedings

     Item 2. Exhibits and Reports on Form 8-K

                                                 
     Signatures


























                                      2
<PAGE>




                 PERFORMANCE ASSET MANAGEMENT FUND III, LTD.,
                       A CALIFORNIA LIMITED PARTNERSHIP

                                   PART I



ITEM 1. FINANCIAL STATEMENTS


Index to the Financial Statements for the Partnership:


   Balance Sheets, March 31, 1997 and December 31, 1996               4

   Statements of Operations, For the Three Months Ended March 31,
     1997 and March 31, 1996                                          5

   Statements of Partnership Capital, For the Three Months Ended
     March 31, 1997 and Year Ended December 31, 1996                  6

   Statements of Cash Flows, For the Three Months Ended March 31,
     1997 and March 31, 1996                                          7

   Notes to Financial Statements                                      8





















                                      3
<PAGE>

<TABLE>


                 PERFORMANCE ASSET MANAGEMENT FUND III, LTD.,
                       A CALIFORNIA LIMITED PARTNERSHIP

                                BALANCE SHEETS
                     March 31, 1997 and December 31, 1996
                               ________________

                                    ASSETS
<CAPTION>
                                                    1997
                                                (Unaudited)        1996
                                                  --------      --------
<S>                                          <C>           <C>
Cash and equivalents                              $860,990      $775,755

Cash held in trust                               2,304,098     2,656,338

Investments in distressed loan portfolios, net   2,351,178     2,566,546

Due from affiliate                                 209,298        56,039

Other assets                                        64,477        64,477

Organization costs, net                                579           923 
                                                  --------      --------
     Total assets                               $5,790,620    $6,120,078 
                                                 =========     =========


                      LIABILITIES AND PARTNERS' CAPITAL


Accounts  payable                                   $3,450          $715

Due to affiliates, net                             536,180       492,800 
                                                  --------      --------
     Total liabilities                             539,630       493,515 
                                                  --------      --------

Commitments and contingencies


Partners' capital                                5,250,990     5,626,563 
                                                  --------      --------
     Total liabilities and partners' capital    $5,790,620    $6,120,078 
                                                 =========     =========





<FN>
   The accompanying notes are an integral part of the financial statements.


                                      4
</TABLE>
<PAGE>

<TABLE>
                 PERFORMANCE ASSET MANAGEMENT FUND III, LTD.,
                       A CALIFORNIA LIMITED PARTNERSHIP

                     STATEMENTS OF OPERATIONS (Unaudited)
              For the Three Months Ended March 31, 1997 and 1996
                               ________________



<CAPTION>
                                                    1997           1996
                                                  --------      --------

<S>                                          <C>            <C>
Portfolio collections                             $215,368      $113,237

Less: portfolio basis recovery                     215,368       100,972 

                                                  --------      --------
     Net investment income                            -           12,265
                                                  --------      --------

Cost of operations:

     Collection expense                                210        18,300 

     Management fee expense                         15,275        23,905 

     Professional fees                              34,405        28,522 

     Amortization                                      344           289 

     General and administrative expense                940           256 
                                                  --------      --------
     Total operating expenses                       51,174        71,272
                                                  --------      --------

Income (loss) from operations                      (51,174)      (59,007)

Other income:

     Interest                                        9,717         3,134 

     Other income                                       84          -
                                                  --------      --------

     Net income (loss)                            ($41,373)     ($55,873)
                                                  ========      ========


<FN>
   The accompanying notes are an integral part of the financial statements.



                                      5

</TABLE>
<PAGE>
<TABLE>


                 PERFORMANCE ASSET MANAGEMENT FUND III, LTD.,
                       A CALIFORNIA LIMITED PARTNERSHIP


                  STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
   For the Three Months Ended March 31, 1997 and Year Ended December 31,1996
                                  (Unaudited)
                               ________________



<CAPTION>
                                     General      Limited
                                     Partner      Partners       Total
                                   ----------   ----------    ----------

<S>                              <C>         <C>           <C>
Balance, December 31, 1995         ($322,499)   $5,597,599    $5,275,100 

     Distributions                   (35,775)     (295,925)     (331,700)

     Net income                       68,315       614,848       683,163
                                   ----------   ----------    ----------

Balance, December 31, 1996          (289,959)    5,916,522     5,626,563 

     Distributions                   (33,300)     (300,900)     (334,200)

     Net income                       (4,137)      (37,236)      (41,373)
                                   ----------   ----------    ----------

Balance, March 31, 1997            ($327,396)   $5,578,386    $5,250,990 
                                   ==========   ==========    ==========















<FN>
   The accompanying notes are an integral part of the financial statements.



                                      6

</TABLE>
<PAGE>
<TABLE>
                 PERFORMANCE ASSET MANAGEMENT FUND III, LTD.,
                       A CALIFORNIA LIMITED PARTNERSHIP
                           STATEMENTS OF CASH FLOWS
              For the Three Months Ended March 31, 1997 and 1996
                                 (Unaudited)
                               ________________


<CAPTION>
                                                    1997           1996
                                                  --------      --------
<S>                                           <C>           <C>
Cash flows from operating activities:

     Net income (loss)                            ($41,373)     ($55,873)

Adjustments to reconcile net income (loss) to
     net cash provided by operating activities:

     Amortization                                      344           289 

     Decrease (increase) in assets:
        Other assets                                  -          110,219 
        Due from affiliates                       (153,259)         -

     Increase (decrease) in liabilities:
        Accounts payable                             2,735         9,588 
        Due to affiliates                           43,380        59,281 
                                                  --------      --------

     Net cash provided by (used in) 
       operating activities                       (148,173)      123,504
                                                  --------      --------
Cash flows provided by (used in) investing
   activities:

     Recovery of portfolio basis                   215,368       100,972 
     Cash held in trust                            352,240        12,639 
     Purchase of investments in distressed
       loan portfolios                                -             -
                                                  --------      --------
     Net cash provided by investing activities     567,608       113,611
                                                  --------      --------

Cash flows provided by (used in) financing
   activities:
     Redemption of limited partnership units          -             -
     Distributions to partners                    (334,200)         -
                                                  --------      --------
     Net cash used in financing activities        (334,200)         -
                                                  --------      --------
Net (decrease) increase in cash                     85,235       237,115

Cash at beginning of period                        775,755       210,140
                                                  --------      --------
Cash at end of period                             $860,990      $447,255 
                                                  ========      ========


<FN>
   The accompanying notes are an integral part of the financial statements.

                                      7
</TABLE>
<PAGE>

                 PERFORMANCE ASSET MANAGEMENT FUND III, LTD.,
                       A CALIFORNIA LIMITED PARTNERSHIP

                        Notes to Financial Statements


1. Organization and Description of Business
   ----------------------------------------

Performance Asset Management Fund III, Ltd., a California limited partnership
was formed in September 1992, for the purpose of acquiring distressed loan
portfolios from financial institutions and other sources.  Interests in the
Partnership were sold in a private placement offering pursuant to Regulation
D promulgated by the Securities and Exchange Commission on a "best efforts"
basis; however, the Partnership did not begin its primary operations until
October 1992.  The General Partner is Performance Development, Inc., a
California corporation ("PDI").

Profits, losses, and cash distributions are allocated 90% to the limited
partners and 10% to the General Partner until such time as the limited
partners have been returned  100% of their initial capital contributions to
the Partnership.  Thereafter, Partnership profits, losses and cash
distributions are allocated 70% to the limited partners and 30% to the
General Partner.

Cash and Equivalents
--------------------

The Partnership defines cash equivalents as all highly liquid investments with
a maturity of three months or less when purchased.  The Partnership maintains
its cash balances at one bank in accounts which, at times, may exceed federally
insured limits.  The Partnership uses a cash management system whereby idle
cash balances are swept daily into a master account and invested in high
quality, short-term securities.  The Partnership's management believes that
these cash balances are not subject to any significant credit risk due to the
nature of the investments and has not experienced any past losses with cash and
equivalent investments.

Cash Held in Trust
------------------

The General Partner anticipates that the Partnership and the PAM Funds may, in
the future, be reorganized and merged with and into one corporation.  In an
effort to accomplish that reorganization and merger on terms and conditions
consistent with the intent of the General Partner, on December 12, 1995, the
General Partner, on behalf of the Partnership and the PAM Funds, and the State
of California Department of Corporations entered into an agreement pursuant to
the provisions of which the Performance Asset Management Fund Trust ("Trust")
was created.  These funds are subject to the terms of the Trust Agreement.  The
Trust was the recipient of a portion of the funds resulting from a settlement
of certain litigation between the Partnership and its affiliates and West
Capital Financial Services Corp. ("WCFSC") and its affiliates.




                                      8
<PAGE>


Investments in Distressed Loan Portfolios and Revenue Recognition
-----------------------------------------------------------------

Investments in distressed loan portfolios are carried at the lower of cost,
market, or estimated net realizable value.  Amounts collected are treated as
a reduction to the carrying basis of the related investment on an individual
portfolio basis.  Accordingly, income is not recognized until 100% recovery of
the original cost of the investment in each portfolio occurs.  Estimated net
realizable value represents management's estimates, based on its present plans
and intentions, of the present value of future collections.  Due to the
distressed nature of these investments, no interest is earned on outstanding
balances, and there is no assurance that the unpaid principal balances will
ultimately be collected.  Any adjustments to the carrying value of the
individual portfolios are recorded in the results of operations.

Organization Costs, Net
-----------------------

Organization costs include legal and other professional fees incurred related
to the initial organization of the Partnership.  These costs are capitalized
and amortized using the straight-line method over five years.  Accumulated
amortization at March 31, 1997 and December 31, 1996 totaled $5,207 and
$4,863, respectively.

Income Taxes
------------

No provision for income taxes has been made in the financial statements,
except for the Partnership's minimum state franchise tax liability of $800.
All partners are taxed individually on their share of the Partnership's
earnings and losses.

Estimates
---------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reported period.
Actual results could differ from the estimate.












                                      9
<PAGE>


Item 2. Management's Discussion and Analysis of Financial Condition and
        Results of Operations.


Results of Operations.
----------------------

Collections for the three months ended March 31, 1997 from the Partnership's
portfolios increased approximately 90% to $215,368 from $113,237 for the
comparable period in 1996.  This increase was due primarily to additional
active portfolios being serviced by the Partnership's affiliate servicer,
Performance Capital Management (PCM).  In early 1996 the Partnership had a
number of portfolios serviced by a third party servicer.  In March 1996 the
Partnership terminated all servicing relations with the third party servicer
and entered into a settlement agreement to sell any remaining portfolio assets
held by the servicer to the servicer.

The Partnership acquired three portfolios in the last quarter of 1996 from a
single third party financial institution specializing in credit card
origination.  During the first quarter of 1997 collections from these
portfolios comprised approximately 96% of all portfolio collections in the
period.  Due to the recent acquisition of these portfolios, the Partnership
did not record any net investment revenue for the quarter ended March 31, 1997,
compared to net investment revenue of $12,265 recorded for the comparable
period in 1996.  During the first quarter of 1997 the Partnership did not have
any portfolios in which 100% of cost had been recovered, as compared to six
portfolios at 100% cost recovery during the comparable period in 1996.
Accordingly, none of the portfolio collections in the three months ended
March 31, 1997 resulted in revenue recognition for the Partnership, compared to
10.83% for the comparable three months ended March 31, 1996.

The Partnership recorded proceeds from portfolio sales of $15,046 for the three
months ended March 31, 1997.  No such proceeds were received for the comparable
period ended March 31, 1996.  The Partnership's management believes that
proceeds from both collection procedures and portfolio account sales will
increase in subsequent periods and estimates that proceeds from portfolio sales
accounts should exceed those amounts recorded in the fiscal year ended 1996.

Total operating expenses decreased 28% to $51,174 for the three months ended
March 31, 1997, from $71,272 for the comparable period in 1996.  Operating
expenses as a percentage of portfolio collections totaled approximately 24%
as compared to 63% for the comparable period in 1996.  The decrease is due
primarily to a reduction in collection expenses attributed to streamlined
collection procedures implemented in 1996, as well as a reduction in
management fees attributed to the sale and liquidation of less productive
portfolio assets.

The Partnership Management anticipates stronger collection activity in
subsequent quarters based on current Partnership growth and past historic
operational trends.  In addition, the Partnership's affiliate servicer,
PCM has completed additional enhancements to its existing collection platform
which should improve the Partnership's ability to locate present and future
debtor customers more quickly and easily than in the past.  This enhancement
should provide additional opportunities for PCM's collection representatives
to increase portfolio collections.

                                     10
<PAGE>


Financial Condition, Liquidity and Capital Resources.
----------------------------------------------------

The Partnership's total assets decreased approximately 5% to $5,790,620 as of
March 31, 1997, from $6,120,078 at December 31, 1996.  The decrease was
primarily attributable to distributions made to limited partner investors of
$300,900 which were generated from collections on portfolio accounts.  The
Partnership received portfolio proceeds of $215,368, of which 100% were
recorded as recovery of portfolio assets.

The Partnership did not acquire any new distressed portfolio assets in the
three months ended March 31, 1997, however Partnership Management anticipates
that it will acquire additional portfolios in the near future.  Future
acquisitions will depend on the asset market, which continues to grow in size
and diversity.  The Partnership believes it will continue to acquire
low-end-priced distressed portfolios; however, Partnership Management will
continue to evaluate assets with different pricing and structure which will
continue to generate strong immediate cash flows and provide additional
liquidity to provide limited partner distributions and also allow Partnership
Management to acquire additional portfolio assets.

The Partnership has made no future commitments with credit card originators and
other financial institutions to acquire portfolio assets.  Partnership
Management plans to use its present contacts and relationships to identify and
acquire additional assets as optimal prices, and believes that it will have no
difficulties in identifying and acquiring such assets.  Management also believes
current cash reserves and future portfolio collection proceeds will be
sufficient to acquire anticipated portfolio assets in the next twelve months.


Impact of Additional Partnership Acquisitions and Resources on Operations.
-------------------------------------------------------------------------

The Partnership Management anticipates that additional portfolio acquisitions
and continued expansion will improve the Partnership's liquidity, profitability
and financial condition, as a result of increased portfolio collections and
sales. Management believes that in order to supplement such growth, PCM must
continue to increase the amount of collection representatives and human
resources. The Partnership's General Partner, in conjunction with PCM and
other affiliated companies and partnerships, is presently evaluating additional
operating facilities which will provide for future growth. Management
anticipates that the Partnership and PCM will obtain additional operating space
in order to facilitate its anticipated expansion by the end of its present
fiscal years. In addition, Management believes that existing management will be
sufficient to facilitate the anticipated additional growth of the Partnership.





                                      11
<PAGE>


                         PART II - OTHER INFORMATION




Item 1. Legal Proceedings.

No additional proceedings have occurred since March 31, 1997, the date of the
latest report provided. In addition, no material developments are noted with
respect to those matters described in the latest report dated March 31, 1997.

Reference is made to the registrant's Form 10-KSB dated March 31, 1997, in
which such legal proceedings were reported in Part I, Item 3. Legal
Proceedings. The registrant, by this reference, makes that disclosure a part
of this Form 10-QSB.


Item 2. Exhibits and Reports on Form 8-K.


(a) Exhibits

Exhibit Number     Exhibit

   1               Certificate of Limited Partnership Form LP-1
                     (Charter Document) *

   2               Agreement of Limited Partnership (Instrument defining the
                     rights of Security Holders)  **


*      Reference is made to the registrant's Form 10-KSB, dated
       March 31, 1997, in which that Certificate of Limited Partnership was
       included as an exhibit. The registrant, by this reference, makes that
       Certificate of Limited Partnership a part of this Form 10-QSB filing.

**     Reference is made to the registrant's Form 10-KSB, dated
       March 31, 1997, in which that Agreement of Limited Partnership was
       included as an exhibit. The registrant, by this reference, makes that
       Agreement of Limited Partnership a part of this Form 10-QSB filing.















                                      12
<PAGE>



SIGNATURES



In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.


Dated: April 1, 1997	Performance Asset Management Fund III, Ltd.,
                         A California Limited Partnership
                        --------------------------------------------
        			         (Registrant)


By: /S/Vincent E. Galewick
    ----------------------
    Vincent E. Galewick
    President of the General Partner
    Performance Development, Inc.

















                                      13