UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                             -----------------------

                                    FORM 10-Q
                   Quarterly Report Under Section 13 or 15(d)
              of the United States Securities Exchange Act of 1934

                             -----------------------


For Quarter Ended March 31, 1998                     Commission File No. 2-95011


                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
             (Exact name of registrant as specified in its charter)


         Massachusetts                                                04-2850823
(State or other jurisdiction of                                 (I.R.S. Employer
incorporation or organization)                               Identification No.)


    One Financial Center, 21st Floor, Boston, MA                           02111
(Address of principal executive offices)                              (Zip Code)


Registrant's telephone number, including area code                (617) 482-8000

                          -----------------------------


                                 Not Applicable
              (Former name, former address and former fiscal year,
                          if changed since last report)

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 ___

                             There are no Exhibits.

                                  Page 1 of 12

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<TABLE>
<CAPTION>

                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
                      (A Massachusetts Limited Partnership)


                                   INDEX                                                                           Page No.

<S>           <C>                                                                                                  <C>
Part I.       FINANCIAL INFORMATION

              Financial Statements

                    Balance Sheets as of March 31, 1998 and December 31, 1997                                      3

                    Statements of Operations
                         Quarters Ended March 31, 1998 and 1997                                                    4

                    Statements of Cash Flows
                         Quarters Ended March 31, 1998 and 1997                                                    5

                    Notes to Financial Statements                                                                  6 - 7

              Management's Discussion and Analysis of Financial Condition and
                         Results of Operations                                                                     8 - 9

              Computer Equipment Portfolio                                                                         10

Part II.      OTHER INFORMATION

              Items 1 - 6                                                                                          11

              Signature                                                                                            12

</TABLE>

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<TABLE>
<CAPTION>

                          PART I. FINANCIAL INFORMATION

                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
                      (A Massachusetts Limited Partnership)

                                 Balance Sheets

                                     Assets
                                                                                    (Unaudited)               (Audited)
                                                                                      3/31/98                 12/31/97
                                                                                 ----------------        ----------------
<S>                                                                              <C>                     <C>             
Investment property, at cost (note 3):
   Computer equipment                                                            $      5,877,320        $      6,164,470
     Less accumulated depreciation                                                      4,102,572               4,119,544
                                                                                 ----------------        ----------------
       Investment property, net                                                         1,774,748               2,044,926

Cash and cash equivalents                                                                 334,638                 253,590
Rents receivable, net (note 2)                                                             32,349                  46,355
Sales receivable, net (note 2)                                                                  -                   2,200
Accounts receivable - affiliates                                                            5,910                  17,768
Other assets                                                                               14,699                  17,293
                                                                                 ----------------        ----------------

     Total assets                                                                $      2,162,344        $      2,382,132
                                                                                 ================        ================

                        Liabilities and Partners' Equity
Liabilities:
   Current portion of long-term debt (note 5)                                    $        565,034        $        628,925
   Accounts payable and accrued expenses - affiliates (note 4)                             36,093                  31,639
   Accounts payable and accrued expenses                                                   85,756                  61,989
   Unearned rental revenue                                                                 14,407                  39,641
   Long-term debt, less current portion (note 5)                                           98,699                 229,717
                                                                                 ----------------        ----------------

     Total liabilities                                                                    799,989                 991,911
                                                                                 ----------------        ----------------

Partners' equity:
   General Partner:
     Capital contribution                                                                   1,000                   1,000
     Cumulative net income                                                                613,598                 605,630
     Cumulative cash distributions                                                       (614,598)               (606,630)
                                                                                 ----------------        ----------------
                                                                                                -                       -
                                                                                 ----------------        ----------------
   Limited Partners (20,185 units):
     Capital contribution, net of offering costs                                        8,987,039               8,987,039
     Cumulative net income                                                              4,052,351               3,928,822
     Cumulative cash distributions                                                    (11,677,035)            (11,525,640)
                                                                                 ----------------        ----------------
                                                                                        1,362,355               1,390,221
                                                                                 ----------------        ----------------
     Total partners' equity                                                             1,362,355               1,390,221
                                                                                 ----------------        ----------------

     Total liabilities and partners' equity                                      $      2,162,344        $      2,382,132
                                                                                 ================        ================
</TABLE>

                 See accompanying notes to financial statements.


<PAGE>

<TABLE>
<CAPTION>

                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
                      (A Massachusetts Limited Partnership)

                            Statements of Operations
                     Quarters Ended March 31, 1998 and 1997
                                   (Unaudited)

                                                                                          1998                    1997
                                                                                     --------------         ---------------

<S>                                                                                  <C>                    <C>            
Revenue:
   Rental income                                                                     $      466,849         $       385,147
   Interest income                                                                            2,906                   1,769
   Net gain on sale of equipment                                                             15,181                  32,144
                                                                                     --------------         ---------------

       Total revenue                                                                        484,936                 419,060
                                                                                     --------------         ---------------

Costs and expenses:
   Depreciation                                                                             238,010                 241,707
   Provision for (reversal of) doubtful accounts                                              7,855                 (25,539)
   Interest                                                                                  18,735                  15,976
   Related party expenses (note 4):
     Management fees                                                                         34,707                  31,498
     General and administrative                                                              54,140                  44,002
                                                                                     --------------         ---------------

       Total costs and expenses                                                             353,447                 307,644
                                                                                     --------------         ---------------

Net income                                                                           $      131,489         $       111,416
                                                                                     ==============         ===============

Net income per Limited Partnership Unit                                              $         6.12         $          5.19
                                                                                     ==============         ===============
</TABLE>

                 See accompanying notes to financial statements.


<PAGE>

<TABLE>
<CAPTION>

                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
                      (A Massachusetts Limited Partnership)

                            Statements of Cash Flows
                     Quarters Ended March 31, 1998 and 1997
                                   (Unaudited)

                                                                                                1998                1997
                                                                                         ----------------    -----------------

<S>                                                                                      <C>                  <C>             
Cash flows from operating activities:
   Net income                                                                            $        131,489     $        111,416
                                                                                         ----------------     ----------------

   Adjustments  to reconcile  net  income  to net cash  provided
     by  operating activities:
       Depreciation                                                                               238,010              241,707
       Provision for (reversal of) doubtful accounts                                                7,855              (25,539)
       Net gain on sale of equipment                                                              (15,181)             (32,144)
       Net decrease in current assets                                                              22,803              118,584
       Net increase in current liabilities                                                          2,987                5,003
                                                                                         ----------------     ----------------

         Total adjustments                                                                        256,474              307,611
                                                                                         ----------------     ----------------

         Net cash provided by operating activities                                                387,963              419,027
                                                                                         ----------------     ----------------

Cash flows from investing activities:
   Purchase of investment property                                                                      -             (352,515)
   Proceeds from sales of investment property                                                      47,349               39,317
                                                                                         ----------------     ----------------

         Net cash provided by (used in) nvesting activities                                        47,349             (313,198)
                                                                                         ----------------     ----------------

Cash flows from financing activities:
   Proceeds from borrowings on long-term debt                                                           -               61,475
   Principal payments on long-term debt                                                          (194,909)            (149,024)
   Cash distributions to partners                                                                (159,355)            (132,796)
                                                                                         ----------------     ----------------

         Net cash used in financing activities                                                   (354,264)            (220,345)
                                                                                         ----------------     ----------------

Net increase (decrease) in cash and cash equivalents                                               81,048             (114,516)

Cash and cash equivalents at beginning of period                                                  253,590              265,199
                                                                                         ----------------     ----------------

Cash and cash equivalents at end of period                                               $        334,638     $        150,683
                                                                                         ================     ================

Supplemental cash flow information:
   Interest paid during the period                                                       $         18,735     $         15,976
                                                                                         ================     ================
</TABLE>

                 See accompanying notes to financial statements.


<PAGE>


                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
                      (A Massachusetts Limited Partnership)

                          Notes to Financial Statements
                Quarters Ended March 31, 1998 and March 31, 1997
                                   (Unaudited)

(1)   Organization and Partnership Matters

The foregoing financial statements of Wellesley Lease Income Limited Partnership
III-D (the  "Partnership")  have been prepared in accordance  with the rules and
regulations of the Securities and Exchange  Commission for Form 10-Q and reflect
all  adjustments  which are, in the opinion of management,  necessary for a fair
presentation of the results for the interim periods presented.  Pursuant to such
rules and  regulations,  certain note  disclosures  which are normally  required
under  generally  accepted  accounting  principles  have  been  omitted.  It  is
recommended  that these  financial  statements be read in  conjunction  with the
Partnership's Annual Report on Form 10-K for the year ended December 31, 1997.

(2)   Summary of Significant Accounting Policies

Allowance for Doubtful Accounts

The financial  statements  include allowances for estimated losses on receivable
balances.  The  allowances  for  doubtful  accounts  are based on past write off
experience  and an evaluation  of potential  uncollectible  accounts  within the
current  receivable  balances.  Receivable  balances  which are determined to be
uncollectible  are charged against the allowance and subsequent  recoveries,  if
any, are credited to the allowance. At March 31, 1998 and December 31, 1997, the
allowance for doubtful  accounts  included in rents  receivable  was $15,461 and
$9,806,   respectively,   and  $2,200  and  $0  included  in  sales  receivable,
respectively.

(3)   Investment Property

At March 31, 1998, the Partnership  owned computer  equipment with a depreciated
cost basis of  $1,774,748,  subject to  existing  leases  and  equipment  with a
depreciated cost basis of $67,753 in inventory,  awaiting  re-lease or sale. All
purchases of computer  equipment are subject to a 3% acquisition fee paid to the
General Partner.


<PAGE>


                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
                      (A Massachusetts Limited Partnership)

                          Notes to Financial Statements
                Quarters Ended March 31, 1998 and March 31, 1997
                                   (Unaudited)

(4)   Related Party Transactions

Fees,  commissions  and other expenses paid or accrued by the Partnership to the
General  Partner or  affiliates  of the General  Partner for the quarters  ended
March 31 are as follows:

                                                   1998                  1997
                                                   ----                  ----

Equipment acquisition fees                    $          -          $     10,267
Management fees                                     34,707                31,498
Reimbursable expenses paid                          44,768                43,896
                                              ------------          ------------

                                              $     79,475          $     85,661
                                              ============          ============

Under the terms of the Partnership Agreement, the General Partner is entitled to
an equipment acquisition fee of 3% of the purchase price paid by the Partnership
for the  equipment.  The General  Partner is also  entitled to a management  fee
equal to 7% of the monthly rental  billings  collected.  Also,  the  Partnership
reimburses the General Partner and its affiliates for certain expenses  incurred
by them in connection with the operation of the Partnership.

(5)   Long-term Debt

Long-term debt at March 31, 1998 consists of one loan totaling $2,911 from Union
Chelsea National Bank with an interest rate of 9.00%, two installment notes from
Pullman Capital  Corporation  totaling $133,148 with interest rates of 8.75% and
10.50%,  and eighteen  loans  totaling  $527,674 from Liberty Bank,  two bearing
interest at 8.50%,  one  bearing  interest  at 11.00%,  two bearing  interest at
7.90%,  four bearing  interest at 8.25%,  and the nine  remaining  loans bearing
interest  at  10.50%.  All  loans are  non-recourse  and are  collateralized  by
equipment on the  respective  leases with a total net book value of $832,008 and
assignment of the related leases.

Maturities on long-term debt are as follows:

                         1998                   $      434,016
                         1999                          225,770
                         2000                            3,947
                                                --------------

                                                $      663,733
                                                ==============


<PAGE>


                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
                      (A Massachusetts Limited Partnership)

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                                   (Unaudited)

Results of Operations

The following discussion relates to the Partnership's operations for the quarter
ended March 31, 1998 in comparison to the quarter ended March 31, 1997.

The  Partnership  realized  net income of $131,489 and $111,416 for the quarters
ended March 31, 1998 and 1997, respectively.  Rental income increased $81,702 or
21% in 1998. The increase is primarily due to the new leases  generated from the
extended  reinvestment period, thus resulting in an increase in the overall size
of the  equipment  portfolio.  Interest  income  increased as a result of higher
average  short-term  investment  balances held during the current  quarter.  The
decrease in net gain on sale of equipment is the result of fewer equipment sales
occurring during the current quarter versus the first quarter of 1997.

Total costs and expenses increased $45,803 or 15% in 1998.  Depreciation expense
decreased  due  to  a  portion  of  the  equipment   portfolio   becoming  fully
depreciated.  During the first  quarter  of 1997,  the  Partnership  was able to
reverse a provision for doubtful accounts due to successful  collection  efforts
on delinquent rents receivable. Interest expense increased due to the additional
financing of long-term  debt.  Management fees increased with the rise in rental
income on  operating  leases.  General  and  administrative  expenses  increased
$10,138.  A major  factor  contributing  to this  increase is that  salaries and
expenses of the  partnership  accounting and reporting  personnel of the General
Partner,  which are reimbursable by the various  partnerships  under management,
are being allocated over a diminishing number of partnerships.

The Partnership  recorded net income per Limited  Partnership  Unit of $6.12 and
$5.19  for the  quarters  ended  March  31,  1998 and  1997,  respectively.  The
allocation  for the  quarter  ended  March 31,  1998  includes  a cost  recovery
allocation of profit and loss among the General and Limited Partners.  This cost
recovery allocation is required to maintain capital accounts consistent with the
distribution  provisions of the Partnership  Agreement.  In certain periods, the
cost  recovery of profit and loss may result in an allocation of net loss to the
Limited Partners in instances when the Partnership's  operations were profitable
for the period.

Liquidity and Capital Resources

For the quarter ended March 31, 1998,  rental  revenue  generated from operating
leases and sales  proceeds  generated  from  equipment  sales  were the  primary
sources of funds for the Partnership. As equipment leases terminate, the General
Partner  determines  if the  equipment  will be  extended  to the  same  lessee,
remarketed to another  lessee,  or sold.  This  decision is made upon  analyzing
which option generates the most favorable result.



<PAGE>


                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
                      (A Massachusetts Limited Partnership)

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations
                                   (Unaudited)

Rental income will begin to decrease due to two factors.  First, lower rates are
obtained on the  remarketing  of existing  equipment  upon the expiration of the
original lease.  Typically the remarketed rates are lower due to the decrease in
useful life of the equipment. Second, the increasing change of technology in the
computer  industry  usually  decreases  the  demand  for older  equipment,  thus
increasing the possibility of obsolescence.  Both of these factors together will
cause  remarketed  rates to be lower than original  rates and will cause certain
leases to terminate upon expiration.  This decrease  however,  should not affect
the partnership's  ability to meet its future cash  requirements,  including its
long-term  debt  obligations.  To the extent that  future  cash flows  should be
insufficient  to meet the  Partnership's  operating  expenses  and  liabilities,
additional funds could be obtained through the sale of equipment, or a reduction
in the rate of cash distributions.

The  Partnership's  investing  activities for the quarter  resulted in equipment
sales with a depreciated cost basis of $45,261,  generating $47,349 in proceeds.
Included in  equipment  sales is a $13,094  loss which was  charged  against the
reserve,  initially set up in a prior period to account for estimated  losses on
the ultimate disposition of equipment.

The  Partnership's  activities  also included a paydown on long-term debt during
1998 of $194,909.  The  Partnership  will payoff its remaining long-term debt of
$663,733 by 2000.

Cash  distributions  are  currently  at  an  annual  level  of  6%  per  Limited
Partnership  Unit, or $7.50 per Limited  Partnership  Unit on a quarterly basis.
For  the  quarter  ended  March  31,  1998,  the  Partnership  declared  a  cash
distribution of $159,356, of which $7,968 was distributed to the General Partner
and $151,388 was distributed to the Limited  Partners.  The distribution will be
made on May 29, 1998. The Partnership expects to continue paying at or near this
level in the future.  The effects of inflation have not been  significant to the
Partnership and are not expected to have any material impact in future periods.



<PAGE>


                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
                      (A Massachusetts Limited Partnership)

                    Computer Equipment Portfolio (Unaudited)
                                 March 31, 1998

Lessee

American Hard Cider, Incorporated
Caterpillar, Incorporated
Cerulean Technology, Incorporated
Coulter Leasing Corporation
Direct Cable TV, Incorporated
Evare, Limited Liability Corporation
Faxnet, Incorporated
George Melhado and Company
H.J. Meyers & Company, Incorporated
Hughes Aircraft Corporation
J. Walter Thompson, U.S.A., Incorporated
JumboSports Incorporated
Magnavox Electronic Systems Company, Incorporated
Mercury Marine, Division of Brunswick Corporation
NYNEX National, Incorporated
ON Technology Corporation
Owens - Corning Fiberglass Corporation
The Internet Access Company, Incorporated

Equipment Description                                 Acquisition Price
---------------------                                 -----------------

Computer peripherals                                   $      2,377,482
Processors & upgrades                                         2,340,311
Other                                                         1,159,527
                                                       ----------------

                                                       $      5,877,320
                                                       ================

<PAGE>


                           PART II. OTHER INFORMATION

                WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
                      (A Massachusetts Limited Partnership)


Item 1.        Legal Proceedings
               Response:  None

Item 2.        Changes in the Rights of the Partnership's Security Holders
               Response:  None

Item 3.        Defaults by the Partnership on its Senior Securities
               Response:  None

Item 4.        Results of Votes of Security Holders
               Response:  None

Item 5.        Other Information
               Response:  None

Item 6.        Exhibits and Reports on Form 8-K
               Response:

               A.  None

               B.  None


<PAGE>


                                    SIGNATURE

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.

WELLESLEY LEASE INCOME LIMITED PARTNERSHIP III-D
(Registrant)

By:    Wellesley Leasing Partnership,
       its General Partner

By:    TLP Leasing Programs, Inc.,
       one of its Corporate General Partners


Date:  May 12, 1998

By:    Arthur P. Beecher,
       President